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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