Local NGOs succeeds too well for some in condom market
Local NGOs succeeds too well for some in condom market
Peter Janssen, Deutsche Presse-Agentur, Jakarta
It's a performance most companies would be proud of.
DKT Indonesia, through a successful mix of clever advertising campaigns, innovative products and direct marketing to pharmacies, brothels and street stalls, captured a 57 percent share of the 70 million condoms sold in Indonesia last year.
In fact, DKT's sales record over the past six years is impressive.
According to a mid-2003 A.C. Nielsen survey, sales of most non-food items in Indonesia have yet to reach the level they were at in 1996, before a regional financial collapse sent the country into a "multi-dimensional crisis" from which it has yet to fully recover.
But during the same period, condom sales, led by DKT's "Sutra" brand, boomed.
"In six years the non-food market has not increased in volume, but the condom market has increased by 50 to 60 per cent," said DKT Indonesia director Christopher Purdy.
DKT, a Washington D.C.-based "social marketing" organization that was named after Indian family planning pioneer Dhendra K. Tyagi, is not, however, laughing all the way to the bank.
The non-profit organization is in the condom business to save lives rather than make money.
"Basically what we're interested in is changing behavior, and how do you get someone to do something they don't normally want to do, like use a condom," said Purdy.
Condom use is still deemed the best way to fight HIV/AIDS, which is only beginning to take off as an epidemic in Indonesia.
Although reported case of HIV/AIDS were only 3,924 by September 30, 2003, UNAIDS estimates that the real number is closer to 200,000, with latest data showing alarmingly high rates of HIV among intravenous drug users, sex workers and gays.
About 52 percent of HIV/AIDS cases in Indonesia caught the virus via heterosexual sex, experts say.
Brothels and sex workers abound in Indonesia, a country of 215 million people with some 40 million of them unemployed, and promiscuity among young people is increasingly common, and yet condom use remains extremely low even by Southeast Asian standards.
To increase condom use, DKT has spread the message through educational campaigns and advertisements, launching humorous items such as durian-flavored condoms and with direct sales of cheap condoms to brothels, massage parlors and truck stops.
The ordinary Sutra brand condom, targeted for the poor, costs about one third the price of other brands.
Some, however, have faulted DKT and its donors for disrupting market forces with their subsidized condoms, claiming that private sector forces should prevail in the marketplace, even when lives are at stake.
"The commercial people are angry (at DKT) because it's killing an already private market," said a consultant from John Hopkins Bloomberg School of Public Health.
"We feel that DKT is selling the condoms too cheap. I've complained to the government about this," said Hendra Setiawan, director of Vonic Latexindo Company, that manufactures Simplex brand condoms for the Indonesian market.
Setiawan, however, acknowledged that Vonic Latexindo was a major supplier of condoms to USAID's family planning program for seven years before it stopped orders.
Condom manufacturing is big business in Southeast Asia, where much of the world's rubber is grown. Most condoms are made with 100 per cent rubber latex.
While Indonesia has only one large condom manufacturer, Malaysia has at least 12 and Thailand has four.
For all of these companies, NGOs helping to fight the spread of HIV/AIDS, with subsidized or give-away products, represent big orders.
"NGOs, being the most active purchasers of condoms, are our most valued customers," said Paul Liang, chief operating officer of NR Synergy Sdn Bhd in Malaysia.
KfW (German Development Bank), which has provided 15.2 million euros to DKT Indonesia, acknowledged that the subsidizing of condom costs under the project was an issue for them.
"You should not subsidize something that otherwise customers would buy in the market at market prices, but nevertheless, we see that HIV/AIDS is on the rise here in Indonesia, so something special has to be done," said Jens Clausen, KfW Jakarta director.
Even so, KfW will only subsidize DKT's advertising and marketing costs as of next year, forcing them to meet their condom production costs off sales.
DKT's Purdy argues that the group's successful efforts in social marketing have been good for everyone, not only potential HIV/AIDS victims but also private sector condom distributors who have also benefited from an expanding market and customer awareness.
"The market for condoms has more than doubled in the past five years and most of that growth is because of the availability of condoms that we have put out there and because of advertising and changing behavior," said Purdy.
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GetDPA 1.10 -- NOV 26, 2003 09:21:23