Stay in the Game
As the Indonesian market is picking up the pace, more players are moving in and intensifying the competition. Price, quality and service that meet customer needs are keys for survival. Chinese products are more price-competitive, while some manufacturers focus on cus tomized products. For instance, to cope with hot temperatures, humidity and stormy weather in Indonesia, Camware designed its own cameras by assembling Korean parts locally. By doing so, its products were more price-competitive without sacrificing quality, Shing said.
Bosch, on the other hand, offers its clients timely service with 25 branches across Indonesia. “Compared with other brands, this is our advantage,” Liong said. These branches assure immediate support in every major city. In rural areas, Bosch works closely with local dealers, partners and engineers to provide service.
Promising Outlook
Indonesia's banking system virtually collapsed in the late 1990s during the Asian financial crisis. The global recession was a completely different Indonesian story. Indonesia eme rg ed f rom the e c onomi c downturn nearly unscathed. “Despite the global market being hit, the domestic demand for security was still strong,” Lim said. “There was no sense of an economic downturn, since people increased their spending on safety.”
Security players are confident that 2011 will yield stronger growth than 2010. “We grew 30 percent in 2010 and expect 40- to 45-percent growth in 2011, due to new projects, public service and new buildings,” Fajarwati said. “Infrastructure and the economy have been good.”
“Profit margin is shrinking due to numerous players,” Tan said. The booming market attracted more players and intensified competition. Competition is tough, especially for surveillance. Local brands are competing with products from China and well-known brands. Even global brands are lowering costs by moving production to China, Liong said.
Compared to markets such as Thailand and Malaysia, the Indonesian market is relatively young, price-sensitive and lacking education. There are still many customers who cannot tell the difference between quality and cheap solutions, Shing said.
The outlook for the Indonesian economy is stable. Inflation is low, and national reserves are larger. Its investment climate and communications have been favorable. “The infrastructure and bandwidth were fairly limited five years ago,” Liong said. “Today we have broadband, fiber-optic and 3-G networks. Everything is possible now.”
In all aspects, the Indonesian security market looks promising