From August 20 to 22, the 6th China FMCG Conference, hosted by New Distribution, was grandly held in Shanghai! In the "Going Global Salon" seminar, the Chairman of PT.YOYIC CHARMING INDONESIA gave a keynote speech titled "How a Chinese Distributor Made Mengniu Yoyi C a Leading Brand in Indonesia?" The following is the on-site speech content of Mr. Gao Ling (with deletions):
I initially started with the Mengniu brand in Indonesia, going out with the Mengniu system team. I will introduce the overall situation in Indonesia in three parts.
Overall Overview of Indonesia Indonesia has a population of nearly 280 million, and it has the largest number of ethnic Chinese outside of China. For Chinese going global, going to Indonesia sometimes feels like being in China. Indonesia's economy ranks 15th globally and first in ASEAN. Indonesia is a multi-ethnic country with more than 300 ethnic groups, of which the Javanese are the largest. Moreover, Indonesia's per capita GDP is close to 5,000 US dollars. When per capita GDP reaches 5,000 US dollars, it indicates sustained economic growth. What does this mean? It means this is a very good entry point. Indonesia is a multi-religious country where everyone believes in a religion. The most influential is Islam, with 80% of the population being Muslim. Next are Christianity, Catholicism, Buddhism, and Hinduism, with fewer Buddhists and Hindus, and there are also Taoism and Confucianism.
How Mengniu Developed in Indonesia Under the "Belt and Road" policy, Mengniu went global as early as 2018. Earlier, the international department was in Singapore, which is the country with the most trade agreements globally. We call it the revolving door of globalization 2.0, covering all of Southeast Asia and Australia. Later, because Indonesia has a large population base and many Chinese, Mengniu's overseas production headquarters was placed in Indonesia. This photo shows Mengniu's production base in Indonesia. The Mengniu factory is called Yoyi C; we did not use the name Mengniu because in Indonesia, apart from Chinese, not many people recognize those characters, so we decided to use Yoyi C as the brand name. In Indonesia, the food regulatory system, related certificates, procedures, and standards are very strict, with a very rigorous management system for foreign products. The market here mainly consists of offline channels, small and medium-sized wholesale, and a new sales form: vehicle sales and motorcycle sales.
Offline channels: Chinese distributors have been doing these, sinking the market to the most basic small shops, which are called Toko in Indonesia, equivalent to our community convenience stores. These small stores are special in Indonesia as they also serve as gas stations. Unlike in China, where gas stations are strictly controlled and cannot be arbitrarily set up, Indonesian small stores can also function as gas stations, making them very versatile.
Small and medium-sized wholesale: These stores both wholesale and retail. We also supply to such stores. These stores act as distributors directly facing customers, doing promotions while delivering goods, and smaller wholesalers also come to these stores to pick up goods. Additionally, there are large wholesalers who deliver directly to warehouses, with cash on delivery.
Vehicle sales: Direct sales at market entrances and busy pedestrian areas.
Motorcycle sales teams: Another sales form is called motorcycle sales teams. In Indonesia, every small family has a motorcycle, making this form very convenient and natural.
We employ many motorcycles locally. In the morning, they come to our sub-warehouses to pick up goods and then sell them, some retail and some delivered to small wholesalers. This is also a form. The picture shows our sub-warehouses in Indonesia. Small sub-warehouses are like China's front warehouses. Jakarta has a special situation: it is sparsely populated with low population density. If a sub-warehouse takes a long time to deliver, efficiency will be low. By placing one large warehouse and 7-8 small sub-warehouses around it, covering the entire area with unified management, all motorcycle retail teams can directly pick up goods from the small sub-warehouses, ensuring high distribution efficiency across the region.
Business Opportunities in Indonesia The picture shows data summarized by the Indonesian Investment Ministry in May, showing that Chinese investment GDP has been rising. The picture says Singapore, but they are actually Chinese. Singapore and China have some differences in the past, which you can refer to. This is the investment situation from the last Indonesian Investment Ministry: agriculture, plantation, fishery, and food are important investment attractions and future industrial sectors. As a food industry, we are very welcome. Overall, Indonesia is a resource-rich country with abundant food and resources, and its market resources are considerable given its population. The picture shows some existing Chinese brands in Indonesia, with very few in food; most are in mining, smelting, construction, new energy vehicles, internet, and communications. Therefore, the food sector in Indonesia has great prospects, and it is a good opportunity for food and beverage categories.
PS: Friends interested in the on-site speech content can follow the recent push of the "New Distribution" WeChat official account. We will compile and publish the guests' speeches for readers.
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