Korean businesses urged to enter burgeoning Indonesian market

Industry

Published: 18 Sep. 2023, 14:55 Updated: 20 Sep. 2023, 14:59

Korean businesses urged to enter burgeoning Indonesian market

Kim Young-hwan, the secretary general of Korea Foudnation for Cooperation of Large & Small Business, Rural Affairs (Kofca) poses for the photo at the foundation's office in Jung District, central Seoul. [COEX]

JAKARTA — Indonesia's gross domestic product (GDP) grew 5.31 percent in 2022, the largest economic growth in the last decade, propelled by a rise in exports of natural resources and recovering private consumption. This is why Kim Young-hwan, secretary-general of the Korea Foundation for Cooperation of Large & Small Business, Rural Affairs (Kofca), is urging Korean companies to pursue the burgeoning market.

“Indonesia is a land of high potential, perhaps set to become the next China,” Kim said at a press interview in Jakarta, held on the sidelines of last week's annual trade show co-organized by the Korea International Trade Association (KITA), Coex and Kofca.

“Korea needs to swiftly establish its market presence in the country, and we need to set up the infrastructure for Korean companies to enter the market.”

Kim has held the position of secretary-general since March 2022.

The Jakarta International Premium Products Fair (Jipremium) is the biggest exhibition introducing Korean products to foreign buyers in Jakarta. This year, a total of 353 enterprises — 231 from Korea and 122 from Southeast Asian countries such as Indonesia, China and Taiwan — that sell consumer goods participated, a surge of 29 percent compared to the year before.

An assortment of consumer goods ranging from household appliances, beauty, fashion and food & beverage were showcased.

Visitors examine the goods exhibited at the Jakarta International Premium Products Fair on Thursday at the Jakarta Convention Center. [JOINT PRESS CORPS]

Kofca’s mission for the trade show was to financially support entrepreneurs gathered at the Indonesian capital, which it did from six regions in Korea — cities including Incheon and Daejeon and four provinces in Gyeonggi, North Gyeongsang, North and South Chungcheong.

Kofca, established in 2004, supports collaborative projects between big conglomerates and small and medium-sized enterprises (SMEs) in Korea. It also supports the SMEs’ global promotions by connecting the SMEs with foreign buyers, as it does for the Jipremium trade show. In total, it has funded 2.5 trillion won ($1.88 billion) for the initiative, and 210 billion won in the agricultural sectors, to instigate business between food producers and small business owners.

The foundation’s ultimate goal is to reduce the gap between large and small businesses to create a fair economic environment through its funds.

“Big conglomerates like Shinsegae and CJ ENM have contributed a lot to the trade show and fostered the entry into global markets for the SMEs,” Kim said. “They pay for the booths of the participating companies, as Shinsegae did for fashion brands participating in this year’s event, or give them opportunities to promote their products at events that the larger companies host, such as CJ ENM’s KCON festivals.”

Kim emphasized that the Korean government should help SMEs set the groundwork, establishing networks and forging more distribution channels to tap into foreign markets like Indonesia. The country has a high consumer base as the fourth-most populous country in the world with around 280 million people and an average age of 29.9. Its top 10 imports from January to July this year included daily commodities such as shoes, TVs, clothing and vegetable oils.

“Exhibitions like Jipremium which has been ongoing since 2018, help such companies to utilize the distribution channels and infrastructure set forth by other businesses. Jipremium also presents an opportunity for Korean companies to form networks with other participating enterprises from Southeast Asia.”

The Jakarta International Premium Products Fair, co-organized by the Korea International Trade Association (KITA), Coex and Kofca, wrapped up on Sunday at the Jakarta Convention Center. [JOINT PRESS CORPS]

“I strongly believe that products of SMEs that are equipped with the technology and high quality materials can fly off the shelves in the Indonesian market with just the right kind of push. They need the promotional edge and more precedents set by other companies to establish more distribution networks, which I hope will accumulate through Jipremium and other similar events in the near future. The timing is right too, with Korea gaining global recognition through Hallyu content such as K-pop, dramas and films.”

The trade show wrapped up on Sunday as the biggest event to date, with 413 Indonesian buyers and distributors participating, a rise of 50.7 percent on year.

The number of business matching sessions between buyers and sellers grew 41.3 percent to 1,852. Due to the establishment of the Great Sales Zone, where products were pre-approved to be sold to the Indonesian government in line with its guidelines, the trade show for the first time posted 109.4 million won in sales.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]