Planning to Distribute your Healthcare Products to Indonesia?

by | Dec 18, 2020 | Study Insight | 0 comments

Indonesia’s healthcare industry offers a big and profitable market. As discussed in our latest story, expanding your healthcare business to Indonesia is promising, if it’s done right.

(Photo by: Eko Herwantoro)

Indonesian’s demand for better quality and efficient healthcare services leads to a greater demand for state-of-the-art medical devices. While currently, Indonesia is still lacking domestic manufacturers, making the country dependent on the import of medical equipment and also raw materials for pharmaceutical products.

Despite the many opportunities, Indonesia has its challenges and barriers. Take cultural differences, for instance. Keep on reading for insightful grounded advice.

First thing first is NOT looking for a distributor

Before you do a distributor research, do this first instead.

Yes, finding the right distributor is crucial and could affect your entire business plan. However, searching for the right distributor is not the first step for a successful expansion. There is no point in hurdling with distributors’ options if your product itself cannot compete in the market.

Indonesian market is really segmented with a different kind of needs and demand. One market might need and could only afford affordable standard medical devices, while the other are looking for a durable technology-advanced equipment. As stated before, there is a growing demand for a better-quality healthcare service in Indonesia. Therefore each product has its own segment and suitable partners to enter Indonesian market.

You should make sure that your products are offering what is currently needed by the Indonesian market, with competitive prices. Then, you go the tricky part, searching for the right distributor.

Outdated website does not mean “no service available”

Common mistakes: judging a distributor’s performance based on its website

It is common to determine a company’s performance based on what they put on their website. Make sense, the internet is one of the sources of every information that you might need. However, most Indonesian distributors do not put much attention to their website. Even one of the biggest Indonesian healthcare devices distributors does not have an adequate website. Many foreign companies passed on what was supposed to be a profitable partnership, due to insufficient information on the distributor’s website. It is important to note that a lack of information does not necessarily mean the company is not promising.

While it may be rather difficult to contact a distributor directly one by one, Indonesia has several healthcare associations that could help you. Even more, you can reach out to Indonesia’s Ministry of Health’s customer service. Bear in mind that Indonesia does not have what we called an “email culture”. So, call or meet the person directly instead.

Another important thing to note is that you must choose your distributor wisely. Based on past experiences, a foreign company that has signed a contract cannot change or build partnerships with other distributors. Most Indonesian distributors in the same industry are in the same circle, so they would know if you have already signed a contract with their competitors. They wouldn’t accept your proposal, as they would like to keep a professional relation with their competitors.

Connect. Connect. Connect.

A good connection goes a long way.

Indonesia has several regulations and requirements for foreign companies that want to distribute their products in Indonesia. Licenses required for medical product registration are manufacturer license, distribution license and distributor license. The registration process could only be done by distributors. Ideally, the registration and assessment process takes 45 days. However, it may take longer than that.

(Source: rawpixel)

Your expansion will be much much easier if you have the right connection. We cannot deny the hierarchical culture that is still strongly viscous in Indonesia’s business environment. Having a strong connection with the people within the government could help smoothen your process through the registration and administration of the distributor license.

For even smoother landing? Let us help you.

Recommended step for a first-timer.

The whole process can be tricky and could take a lot of time. Especially if it is your first time entering the Indonesian market. Differences in business culture, language barriers, and the need for a good connection within the market are a few of many challenges in entering Indonesia’s healthcare market. It will be much easier and profitable for you to hire an expert on the ground.

BRIGHT Indonesia offers thorough end-to-end market entry strategies that will make your business expansions run smoothly. Let us take care of the distribution partner search so you can focus on your product and service. Visit us here.

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