Tue, 25 Feb 2003

Market still dominated by foreign players

When H. Johari Zein, chief executive officer of PT Tiki Jalur Nugraha Ekakurir (Tiki JNE), started his moving and relocation company, one of his first orders was moving the household belongings of a military general.

The distance was not too long as he moved from Kuningan to Cilodong area, both within Jakarta. One of the valuable pieces in the assignment was a huge arwana fish, the general's favorite pet. Johari was aware that moving the fish was no ordinary job as even the slightest mishandling could result in the death of the expensive animal.

"So, after placing the fish in a specially prepared water container, instead of using the delivery trucks, I moved the fish to the owner's new home in my very own sedan," Johari recalled one of the numerous unique assignments his company had handled.

For five years now Tiki JNE has been providing moving services to its mostly foreign customers. Previously the business was handled by a special division of its affiliate company, Titipan Kilat, and starting in 2000, after receiving a special freight forwarding license that allowed the company to handle consignments weighing over 30 kilograms, Tiki JNE took care of major orders for moving and relocation.

According to Johari -- born in Medan on April 16, 1954 -- moving and relocation has become an integral part of services offered by many growing courier companies. "Some local companies even specialize in such services inspired by the influx of foreign players in this field," said the man who is also the chairman of the Indonesian Express Delivery Companies Association (Asperindo).

Below is an excerpt of an interview with The Jakarta Post where Johari expressed the future prospects and the prerequisites to develop this particular business further.

Q: How many Asperindo members are there right now? A: I can easily remember the Jakarta number, which is 106 companies.

Does each one of them provide moving and relocation services? No, not all. Our members are divided into three types of operational zones. The first one operates internationally. These are the ones that include moving and relocation services in their portfolio. They often assist foreign experts moving into and out of the country. The second specializes in domestic operations. Many in this type have the required transportation facilities and equipment for such services, including house, office or factory moving. The third type, currently quite large in number and rapidly growing, is the city courier, who handle items like invitations, letters, bank accounts, credit cards and the like. Despite their huge number, most of them do not cater to moving or relocation services. Well, you see, moving and relocation are only part of the entire range of services that a courier or delivery company can provide for its customers.

Are there local companies in Indonesia now that specialize only in the moving business?

Well, just a couple. They were inspired by major foreign players in this field, such as Global, Crown Pacific and so on. These companies opened up their branches in Indonesia because their clients in the home country started their businesses here, so, naturally, they also have to serve them locally. Like in any business, apart from quality, trust, based on years of a relationship also plays an important part.

How large is the domestic market? Due to the low awareness of the locals in the availability of such services, the domestic market has not grown very much. Our people are quite different from expatriates who would not go through the hassle of moving. For them it's just a telephone call away and a moving company with all its experience and expertise will take care of everything, from packing and rearranging down to cleaning up the new place for immediate use. I must say that most of our people are not that aware regarding such complete moving services, except for a handful who have lived abroad either for their work or education.

How would you roughly categorize the market? There are individuals wishing to move their houses and businessmen who want to move their employee's residence or their offices. Finally, there are also companies that intend to move their factories to another location within the country or even to another country. They are mostly foreign or multinational corporations, who, due to their world renowned names, always rely on the leading and most experienced moving companies. So, clearly this market almost entirely belongs to the major moving companies. Admittedly, the local players with comparatively insufficient experience are not the preferred choice in handling these giant-sized assignments, like moving the whole factory and its entire office complex. But in the smaller area, house moving that is, the number of local companies with quality services is rapidly growing.

How do you envision the prospect of this business in the future? I would say it very much depends on the growth of our economy, which I'm quite certain will improve in the not-too-distant future. A healthy economy will automatically induce a healthy mobility in the society. Hence, the need for the services provided by the related companies will naturally grow and so will the appreciation towards the companies themselves. I'm optimistic that opportunities for growth in this business are abundant. We, in the association, greatly support our members and motivate them to enhance their skills and knowledge as well as gain experience at various occasions. Just look at the size of our country, it is so huge and it is geographically unique, add to it the newly introduced element of regional autonomy, all of which create limitless potential for this kind of business.

What are the superior features of local companies in comparison to foreign ones?

Moving is not always to big cities, like Jakarta. In moving to project sites in the regions or in remote areas, I think, local companies surpass their foreign counterparts, which, in my opinion, are not so accustomed to that type of assignment. In this sector certain local players excel in their services.

What would you suggest to further develop this business?

With the kind of geography we have, even a local company should have a widespread network, meaning branches in major cities or at least in the capital cities of every province so that it can truly provide moving and relocation services to every area in the country. Serving just a couple of big cities, say like Jakarta, Bandung and the like would not be sufficient. Local companies must also consider providing services outside Indonesia to cater to foreign corporations and expatriates, hence they must establish some kind of cooperation or network with agents in foreign countries. Human resources is another vital element. We must have expert staff who are able to, among other things, conduct reliable surveys and can measure as well as detect the level of difficulty of each and every moving assignment and of course, can provide the relevant solutions. -- Ari Darmawan