Levi's seeking bigger share in Indonesian market

Levi's seeking bigger share in Indonesian market

By Yenni Kwok

JAKARTA (JP): The young models were dressed as gold-rush
cowboys, rebel-without-a-cause look-a-likes, flower generation
kids, rappers and punks. They represented different styles from
different generations, and all shared a common thread: Levi's
jeans.

The models paraded the legendary brand's products during the
launching of the Indonesian subsidiary of Levi Strauss & Co., PT
Levi Strauss Indonesia.

In Indonesia, where the word "Levi's" is slang for a pair of
jeans, the company already has an edge in the apparel industry.
The road, however, will not be a totally smooth one.

Indonesia is not one of the biggest Levi's jeans markets in
the Asia-Pacific. In fact, it lags behind Japan, Australia, the
Philippines, New Zealand and South Korea.

Jake Centenera, the president director of Levi Strauss
Indonesia, blames it partly on the American company's rather late
entry into the Indonesian market. While Levi Strauss & Co. has
been present in the Philippines since the 1980s, it just assumed
the management from its Indonesian licensee, Jay Gee Enterprises,
at the beginning of this month.

With a booming economy and a large population, Levi Strauss
has much to expect in Indonesia. "Indonesian consumers are more
open to new ideas... I would not rather be anywhere else but
Indonesia," Centenera said.

Besides denim products, Levi Strauss Indonesia will also
market Dockers, Britannia and Slates. But it will rely heavily on
its denim products, targeting 15 to 24-year-olds, whom Centenera
sees as the trend-setters.

A pair of Levi's jeans is still comparatively expensive, and
most likely to be bought by upper- and middle-class shoppers. It
is still an item that most teenagers dream of.

When asked what was so special about her Levi's, 15-year-old
Mira Nivia said, "To ngeceng," or show off, in Indonesian slang.

Gold Rush

Levi's are rooted in the Gold Rush era, more than 100 years
ago. In 1853, Levi Strauss, a German immigrant, arrived in San
Fransisco to start a dry-cleaning business. Instead, together
with a tailor from Nevada, he ended up creating a sturdy outfit
for miners and other blue-collar works in 1873. Levi's jeans were
born.

After his death in 1902, Strauss' four nephews inherited the
thriving company. Bob Haas, a great-great grandnephew of Strauss,
is now chairman of the board and chief executive officer for one
of the biggest family-owned companies in the world.

Centenera boasts that there is no denim company in the world
that can compete head to head with Levi Strauss & Co. In 1995,
the company's worldwide sales totaled US$6.7 billion. However,
competition has emerged at the local level in 60 countries.

In Indonesia, for example, Levi Strauss & Co. competes with
imported brands such as American-based Guess?, and local products
such as Lea. In fact, among teenagers, Guess? jeans have almost
become more popular than Levi's.

Guess?

"Definitely Guess?," said Mira about the jeans she would
prefer, citing prestige (Guess? are more expensive) as a reason
more than comfort.

There is also the issue of counterfeit products. Levi's
trademarks are registered in more than 200 countries, and
Indonesia is one of them.

However, counterfeit products can be found in many markets.
Fake Levi's products can cost up to 75 percent less than the
original, said Deni Triwijaya, 17, who once bought a counterfeit
Levi's product.

Responding to the problem, Centenera said his company will
work closely with government agencies on brand protection.

He also cited the importance of educating and communicating
with consumers. "Customers need to be taught: 'I do not want to
wear fakes,'" Centenera said.

For some people, however, counterfeit products are not a
matter of choice. "They enable the poor to wear and sport the
expensive brands," Deni said.

Levi Strauss Indonesia now employs 77 people, 41 of whom will
soon work in the plant and warehouse in Karawang, West Java.
Together with workers from 18 subcontractors they will produce
Levi's items for both domestic and overseas consumers, except the
501 Original series. The 501, the company's leading product, is
imported directly from the United States to ensure the same
quality standard.