Exporters Rack Brains to Keep Business Going

As global trade remains under pressure, Indonesian exporters are being forced to rack their brains to keep their businesses going.
Short and simple. That is the strategy employed by furniture exporter Summit Gallery in terms of its marketing chain. The shorter the chain, the less it has to spend, especially in tough times like now.
Summit Gallery owner Henrico said he no longer used a distributor’s service to reach prospective customers.
“Distributors don’t trust small and medium enterprises like us much. That’s why we attend exhibitions, both domestic and abroad, so we can sell goods directly to end users,” the 42-year-old said on Wednesday while attending the 2016 Trade Expo at Jakarta International Expo Kemayoran.
The strategy has proven successful for the Bogor-based exporter as it reaps around Rp 350 million (US$26,875) in business deals from each exhibition. The profit margin is also higher compared to deals that involve distributors.
This year, it is mulling exporting to Sri Lanka to partially offset falling exports to China.
Meanwhile, Allev, a producer of Muslim outfits for women, which also had a presence at the expo, uses Instagram and Facebook to cover wider ground, beyond geographical limits.
Allev sales and marketing director Umi Hani said the company also implemented a “ceiling retail price mechanism” to prevent product overpricing and distinguish itself from similar businesses.
The strategies of Summit Gallery and Allev come at a time when global trade has become so subdued that the World Trade Organization (WTO) cut its forecast for global trade growth this year by more than a third.
The new figure of 1.7 percent, down from the WTO’s previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag behind the growth of the world economy, the trade body said last month, as reported by Reuters.
WTO director general Roberto Azevedo has said the figures should be a wake-up call for governments. Indonesia is no exception.
Southeast Asia’s largest economy has seen exports dwindle for the past four years. It ended 2015 with an export value of $150.25 billion, dropping by almost 30 percent from 2011.
The situation has remained bleak in 2016 as January-August trade figures revealed lower exports compared to a year ago.
When opening the trade expo, President Joko “Jokowi” Widodo called for the diversification of markets and products as a way out.
“We need to dare ourselves to penetrate markets that we never paid attention to all this time,” he said, pointing to Africa as a potential market.
Isioma Fidel-Ewerem, managing partner of Nigerian importer Kunsukie Global Ltd., is among those hoping to benefit from Jokowi’s call to support Indonesia’s expansion to other African countries.
The repeat importer often buys Indonesian-made linen and food products. “Indonesia has better quality linens than China. For the food, we like biscuits, snacks, herbal drinks, tea, chewing gum and noodles,” she said.
Unlike Fidel-Ewerem, many visitors on the opening day of the expo were first-time buyers, looking for potential trade deals in highly diversified sectors, ranging from food, fruit, personal care, home appliances, clothing and tiles to briquettes.
As many as 1,100 local firms and 15,562 guests from 120 countries are registered for the event, which will run until Sunday.
Separately, Bank Central Asia (BCA) chief economist David Sumual acknowledged the need to find new markets to complement established markets. However, he argued that both the government and the monetary authority must lend a hand to solve the issue as well.
“The government has launched many programs, but it turns out that many businesses are not aware of them. For example, they often don’t realize there is the KUR [micro credit program] to help with financing.”
On the monetary side, David said the exchange rate should be managed to support export growth.
Source: www.thejakartapost.com, 13/10/2016
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