Think regional, act local!

Think regional, act local!

Hermawan Kartajaya, Jakarta

The Southeast Asia region has grown so fast that it has become
one commercial market and also one market for investment.
To support this at the governmental level, the member countries
of ASEAN have adopted the vision of creating an ASEAN Community
by 2020 based on three main pillars: the ASEAN Security Community
(ASC), ASEAN Economic Community (AEC), and ASEAN Socio-Cultural
Community (ASCC). The mission is to create "Peace and Prosperity
for ASEAN People." The vision of ASEAN as one community is one
that has profound implications for the business world.

Moreover, the ASEAN Economic Community aims to eventually turn
the South East Asian region as a regional production base and one
single market. The more that ASEAN unites, the more serious will
be the business challenges to the local players in each country.
This regionalization of ASEAN also harbors huge marketing
opportunities.

We have been striving to fly Indonesia's red and white flag in
the region through MarkPlus&Co. After 15 years in existence in
Indonesia, MarkPlus&Co is now also present in Singapore and Kuala
Lumpur, Malaysia, and we are trying to reposition ourself as a
regional company. In September this year, we sent one of our
Indonesian consultants to Ho Chi Minh City, Vietnam, and have
opened a representative branch office in that city.

The goal is to show our neighbors that we are not only a
country that exports commodities, finished products and manpower,
but also solutions.

It's not only small companies like MarkPlus&Co that have an
interest in the ASEAN market. We can see how big companies from
neighboring countries have also increased their interest in the
region.

The automotive industry can best illustrate this. Malaysian
automaker Proton opened its first manufacturing plant in
Indonesia in June, 2005. The plant assembles 8,000 cars per year,
which are then sold on the Southeast Asian market.

Many Malaysian companies are now investing in Indonesia.
Meanwhile, Singaporean firms are also investing widely here.

Take Temasek of Singapore, for instance. This group has
purchased stakes in a wide range of Indonesian firms, including
Indosat, Telkomsel, Bank Danamon, BII, and Astra International.

In the meantime, Malaysian companies have also started to
invest in many Indonesian companies. Indonesia is like the
"second home" for Malaysian investors, who are increasingly
putting their money in variety of sectors, including
telecommunication, banking, oil and gas, pharmaceutical,
electronic components and plantations.

Maxis Communication -- a cellular operator from Malaysia --
completed the acquisition of 15 percent of the shares of Lippo
Telecom last April. Maxis is even rumored to be interested in
becoming the majority shareholder in this cellular company.
Meanwhile, Telkom Malaysia Bhd has also spread its wings to
Indonesia by teaming up with cellular operator Excelcomindo.

Commerce Asset-Holding Bhd (CAHB), a conglomerate from
Malaysia, now owns Bank Niaga and plans to become more aggressive
in investing in Indonesia.

Even more interesting is the company behind Proton, Malaysian
Telekom and Commerce-Asset Holding. It is none other than
Khazanah National Bhd, which controls more than 40 percent of the
shares of Proton & Telekom Malaysia, as well as 25 percent of the
shares of Commerce-Asset.

Unlike Temasek of Singapore, whose name is already well-known
among businessmen here, Khazanah, which is the "Malaysian
Temasek" is quite low-profile.

However, that doesn't mean that Khazanah is inactive. It has
proven its aggressiveness in penetrating the Indonesian market.

It is worth repeating here what has been said by Malaysian
Prime Minister Abdullah Ahmad Badawi not so long ago. Badawi, who
is also the chairman of the board of directors of the Khazanah
group, said that his government was in the midst of trying to
convert Khazanah, as the investment management department of the
Malaysian government, into one of the biggest and most dynamic
investor groups in Asia.

Investment by Khazanah in Indonesia is more than mere
investment for gain. It seems that they want to prove that they
are not only an economic animal that invests for profit only.
More than that, they want to prove that they are here to
contribute to sustainable development.

Therefore, their operations in Indonesia are not so different
from what they do in Malaysia. In other words, they are
interested in environmental conservation and corporate social
responsibility.

Companies with a regional focus, such as Khazanah, already at
understand local anxieties and desires in the countries where
they operate. The fact that possess an understanding of local
culture sensitivities is one of the reasons why they are
respected by local people.

So, the slogan "Think global, act local" is not well suited to
those companies that want to enter the regional market. Nowadays,
for companies wanting to go regional, the key is to "Think
regional, act local."

This means that they need to have a comprehensive
understanding of the characteristics of regional markets like
ASEAN. Regional perspective here means that these companies not
only need to have regional marketing strategies but also an
understanding of each local market. Without these things, it will
be impossible for them to successfully compete in the regional
playing field. Therefore once again, the point is to "think
regional, but act local!"

The writer is Asian Marketing Guru (CIM-UK, December 2003),
the Most Powerful People in Business 2004/Marketing (SWA
magazine-Indonesia, December 2004) and founder and president of
MarkPlus&Co. On the net: www.hermawankartajaya.com

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