Exhibition time: September 25-27, 2024
Exhibition venue: Jakarta International Expo Center.
Exhibition time: September 25-27, 2024
Exhibition venue: Jakarta International Expo Center.
Essential Knowledge to Acquire Before Traveling to Indonesia
CICC foreign exchange research, Focus on Business, Zhe Yi Finance
May 24, 2024

Export Opportunities for Chinese Enterprises in Indonesia

 

Chinese enterprises expanding into the Indonesian market are finding ample room for growth and strategic advantages. With many domestic products aligning well with Indonesian market demands, there is a significant opportunity for foreign trade export enterprises to focus on this region. As the saying goes, "know yourself and know your enemy, and you can fight a hundred battles without disaster." To successfully engage with Indonesian customers, it's crucial to understand local customs, customer characteristics, and the nation's foreign exchange policy.

 

Key Points for Business with Indonesian Customers:

 

1. Indonesian businessmen tend to make decisions slowly, with business negotiations often being lengthy, yet they are generally reliable in terms of creditworthiness. Patience is key when engaging with them.

2. Indonesians value long-standing relationships and friendships. Cultivating a strong relationship and demonstrating sincerity are vital to gaining their trust.

3. Avoid discussing sensitive topics such as local politics, socialism, and foreign aid.

4. Indonesian buyers are typically modest and polite, with laughter playing a significant role in communication. Maintain a positive attitude during interactions.

5. Customs clearance in Indonesia can be complex. Verify whether your Indonesian client can manage it or if you need to engage a specialized company.

6. Respect the predominantly Muslim culture by avoiding the use of your left hand for transactions and refraining from consuming pork or alcohol.

7. Business card exchange is important in Indonesian culture; always be the first to present your card when meeting.

8. The best time for business discussions in Indonesia is from September to June, as July and August are common vacation months.

9. Home visits are a valued part of building business relationships in Indonesia and can facilitate smooth negotiations.

10. Be prepared for bargaining as it is a common practice; consider leaving room for negotiation in your pricing.

 

Understanding the Indonesian Consumer and Payment Landscape

 

· Indonesia's diverse population prefers shopping on websites in familiar languages.

· Consumers are informed about promotions primarily through social media and TV ads.

· YouTube is the dominant social platform, with a high penetration rate.

 

Foreign Exchange Policy and Tariff System

 

· The Indonesian rupiah (IDR) operates with a free-floating exchange rate, with transactions requiring reporting to the central bank.

· Tariffs are categorized into four groups, with rates ranging from 5% to 10% for essential goods, and stricter controls on luxury and protected items.

 

Customs Clearance and Business Advice

 

· Shipments under US$100 are duty-free, while those above this threshold are subject to various clearance processes.

· Engage reputable Indonesian partners and maintain clear communication to navigate customs requirements effectively.

· Use Free on Board (FOB) pricing for exports to Indonesia to mitigate clearance risks.

· Keep detailed records of the certificate of origin and related documents for at least three years to comply with potential inquiries.

 

As the RCEP agreement and the Belt and Road Initiative take effect, the Indonesian market presents growing opportunities for foreign trade. Collaboration will be key to unlocking this potential.