The brand illusion -- What's stopping Indonesian brands from competing globally

Michael J. Webdell Jakarta

Nike, Samsung, Tommy Hilfiger, Guess, Sony: These are just a few brands popular to people across the world. In shopping malls from Jakarta to London, and New York to Seoul, they are symbols of a lifestyle consumers pay premium to be part of. But whether one pays US$50 for their Hilfigers in Los Angeles or 10,000 yen ($91) in Tokyo, many of these products have something more in common than a brand name or a high price tag: Many of them are made in Indonesia.

Of course, there's nothing shocking about that. For years, Indonesia has been manufacturing the products branded by some of the world's most prestigious companies. Rather, with the country's clear capability to manufacture such highly sought- after goods, it is puzzling why Indonesia lacks any globally- known brands of its own.

To be fair, Indonesia has its share of strong domestic brands. Aqua, Sampoerna, Indomie, Hoka Hoka Bento, and Lion Air clearly demonstrate Indonesian capability for developing and managing successful brand identity programs. So, if Indonesian business has the capability to manufacture such quality products, and has at least a general understanding of branding as a value-added marketing tool, where do Indonesian companies fall short in creating their own global brands?

Socially speaking, Indonesia is at a disadvantage for creating global brands. The modern concepts of branding and marketing are a creation of capitalism. And though Indonesia can be said a grand contributor to capitalism's development, the country's part has been largely limited to supplier.

Of course, suppliers of commodities and low-cost products are a very important part of our economy; and I am not attempting to discount them. But after centuries of learning its well-defined place in the economic food chain, excluded from the value-added aspects of branding, many Indonesian businesses lack the profound knowledge and confidence to undertake this initiative. Many don't realize they could ever attempt such a thing as creating a global brand.

However, the good news is the knowledge and skills required in creating and managing an internationally successful brand can be learned. And, in my opinion, the lack of confidence for marketing brands globally is unfounded. This opinion is based on my previously outlined points that Indonesia does produce the high- quality goods marketed by many of today's global brand leaders, and that Indonesia has many successful domestic brands. With a little initiative, these resources can be successfully applied internationally.

Perception of what Indonesian business can and can't do is the real gremlin in creating global brands. It is always shocking to me when business and government give into the notion that the country's slower performance on exports is helplessly related to issues like anti-Muslim sentiment, or inclusion on "travel warning" lists.

These issues don't need to consume Indonesia's brand identity when the country has so much to offer. Presenting them as the cause of current economic conditions is an inaccurate rationalization that plays into negative stereotypes and takes our focus away from discovering new economic growth opportunities. These are mental obstacles by which business does not have to be stymied.

In my experience, business is business. As far as foreign corporate buyers are concerned, they just want a good price, quality products, excellent service, and an easy, safe transaction. Where the end consumer is concerned, unless they are buying a cultural-specific or country-specific product such as French perfume, they don't really care where a product is made.

A prime example is Tommy Hilfiger who used the slogan "An American Original" to support their brand identity. I am not aware of many Hilfiger products that are actually manufactured in The United States. But with annual sales of about $1.9 billion in 2003, clearly the power of Hilfiger's brand is what sells his products. Whether they are made in the United States, Indonesia, or any other country doesn't really matter.

Hypothetically, an Indonesian company might do just as well creating and marketing its own "original American" brand. We just need the vision, like Tommy Hilfiger had, to create something as unique and wonderful.

Indonesian business must start studying the success of global brands and figuring out how to start participating themselves. By creating new brands of their own, or adapting suitable Indonesian brands to international markets, they can create greater sales for their companies and increase exports for the country while keeping a greater share of the Indonesian-made products' end value in Indonesia.

But we all have to get past this engrained image of what we think Indonesia is and start making it what it can be. It is up to Indonesian investors and business to gain the knowledge, take the initiative, and realize that Indonesian brands can be globally successful too.

The writer is a marketing and management consultant. He may be contacted at mjwebdell@aol.com.