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Working in Indonesia

Growth and Opportunity  It’s the mandate of TSC, to deliver world-class repair and logistics solutions that meet the unique – and often challenging – demands of regional markets. In the case of Indonesia, a country with the fourth largest population in the world and a continually rising demand for technology, opportunities abound to support and benefit from its record growth.

A developing economy, with GDP increasing at a rate of between 5 to 6% since 2010, Indonesia is experiencing a historic demand for IT and electronic goods and services, powered by a burgeoning middle class. The growing consumption of information, and thus hardware, is the driving force behind an internet penetration rate sitting currently at 36.5%*, with the need for services growing alongside, as consumer behavior continues to mature.

Crucial to TSC’s interest and strong presence in Indonesia is the country’s current restrictions against the import of refurbished IT and consumer electronics products and spare parts, creating a requirement for local logistic and repair services.

Challenges and Risks While the opportunities are abundant, the challenges inherent in running a logistics-reliant business in Indonesia can be daunting. With the Indonesian archipelago spread out over 18,000+ islands, of which 922 have permanent inhabitants, transportation requirements becomes a chief area of focus.

The country’s elaborate infrastructure adds a layer of complexity, the need to distribute parts to and from remote locations increasing the overall cost of doing business. Economies of scale are difficult to achieve due to the wide geographical spread of clients, especially in smaller cities and urban centers where distance and the low density of demand makes it costly to roll out reverse logistics and repair services.

And while tackling transport issues are key to doing business in Indonesia, there are other important factors to consider, including currency fluctuation and a lack of industry standards and compliance:

Currency Exchange Risk Management

Periods of continuous deflation of the Indonesia Rupiah increases the cost of doing business, as materials for repair are frequently imported and paid for in foreign currency.

Industry Standards and Compliance

With a relatively young and fragmented reverse logistic and repair industry in Indonesia, regulations are often not clearly defined, making it an effort to work with officials around issues of compliance to local standards.

Local Understanding, Global Scope Thorough knowledge and experience within the region, coupled with the ability to manage risks and execute flawlessly is key to meeting and exceeding customer expectations. R-Logic, as TSC’s window into the South East Asian market, is primed to deliver the best of TSC’s global expertise and processes, and tailor it to fit the specific needs of the growing Indonesian market. As customer requirements change over time, TSC’s services will also evolve, including:

1. ​Plans to develop and utilize both new and existing infrastructure to support the growth of the reverse logistic and repair business.

2. Establishing a component level repair facility, specializing in PCBA and LCD panels. This will provide the necessary repaired spare parts needed to support the local market, allowing sustainable recycling of these components within the country, and decreasing import costs.

3. Enhancing existing customer care, creating a carry-in-center and onsite services, to maximize TSC’s reach to clients across Indonesia, starting from the largest urban centers and moving eventually to cover smaller cities and sub-regions.

#truepartner #TSC #Indonesia #riskmanagement #TSCAsia #developingeconomy

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