Food
Reckitt Benckiser is aiming to expand its presence in Indonesia’s consumer market as the British multinational company plans to introduce several new brands.
“We’re looking for an aggressive product and portfolio expansion. We’ll continue to work on building brands, entering new categories. The products will come in the near future,” Reckitt Benckiser Indonesia president director Ratanjit Das said during a recent interview.
Das, however, declined to provide details regarding the brands or their expected launch schedule. The new brands will add to its list of 20 brands already being marketed in Indonesia, such as Durex condoms, Dettol antiseptic, Vanish stain remover and Strepsils throat lozenges.
To deepen its presence, the company will meet head-to-head with its major competitors, namely Anglo-Dutch Unilever, American SC Johnson and Son and Japan’s Kao.
Das said he was confident in the Indonesian market, citing the country’s relatively higher disposable income on the back of falling inflation and greater media use.
“Consumers are becoming more and more aware of household products through the media. Therefore they’re ready to spend and more willing to experiment. So in the future, I would say it will be good for the FMCG [Fast Moving Consumer Goods] business, as well as for us,” he said.
Data from the World Bank show that Indonesia’s GDP per capita rose significantly in the 2004-2014 period. GDP per capita stood at US$3,491.9 in 2014, an increase of more than three times from $1,150.3 in 2004.
The Boston Consulting Group has also projected that 8 to 9 million people are expected to enter the middle-income bracket every year in Indonesia, until the total reaches 141 million in 2020.
According to Reckitt Benckiser, the use of digital media has increased, especially social media like YouTube, and has helped the company advertise its products. At present, it primarily uses digital media to advertise its Durex products due to existing restrictions on condom advertising on television.
Despite the company’s growing preference for digital media, offline activities still dominate Reckitt Benckiser’s marketing activities. For instance, it partners with the Health Ministry and the Indonesia Doctors Association (IDI) in its Healthy Life Mission campaign to introduce Dettol antiseptic at community centers.
The company currently operates two factories in Cileungsi, West Java, and Semarang, Central Java.
In terms of costs, Das said the exchange rate remained one of its biggest business challenges as many products were still imported. High logistics costs amid a lack of proper infrastructure are also two items of concern.
No specific financial details are available regarding the company’s operations in Indonesia. However, its latest financial report reveals that 31 percent of its £719 million ($956.68 million) revenues in the first quarter of 2016 were generated from developing markets, including Indonesia.
