• Skip to primary navigation
  • Skip to main content
  • Skip to footer
Cekindo Business Center

Cekindo Business Center

Business Expert in Indonesia

  • Homepage
  • About Us
    • Client’s testimonials
    • Company Profile
    • Terms & Conditions
  • Our Services
    • Virtual Office
    • Co-working and Private Office
    • Business Visa
    • Due Diligence Solutions
    • Shelf Company
    • Company Registration
    • Foreign-Owned and Local Nominee Company
    • Representative office
  • Gallery
  • Blog
  • FAQ
  • Contact
  • ENEN
    • ENEN
    • IDID

Why Did These Global Brands Fail in Indonesia?

You are here: Home / Blog / Why Did These Global Brands Fail in Indonesia?

It is well known that Indonesia has always been a magnet for international brands looking to expand their global presence. Although such expansion can bring large profits, there are many critical factors both global and smaller brands should consider or avoid before they decide to expand to Indonesia.

From restaurants to car manufacturers to convenient stores, many global brands have jumped too quickly and stumbled into many mishaps that made them fail in Indonesia. The failure was mostly because they were unable to properly think the market strategy through, and instead generalise the diverse Indonesian market.

Here in this article, you will see some of the famous global brands that have failed in Indonesia, and most importantly how you can learn a lot from their missteps.

GIANTS THAT FAILED IN INDONESIA

Walmart

Walmart used to have a store at Pluit Village (previously known as Megamall Pluit). The main reason for its downfall was consumers took advantage of its 30-day return policy to a point they abused this convenience. As a result, sales were always low, and residents in Indonesia did not have high purchasing power like people in the USA.  

Seven-Eleven (7-11)

The lower-than-expectation popularity of 7-11 and its new store concept in Indonesia were what made this global brand fail in Indonesia market scene. In Indonesia, the 7-11 adopted the concept of being a place for the younger generation to hang out with free Wi-Fi.

It did attract a lot of youngsters, but most of them just bought inexpensive items and would just sit there and use the free Wi-Fi, without purchasing other goods. The sales suffered tremendously, and 7-11 was forced to withdraw from Indonesia.

Petronas

Originally from Malaysia, this petrol company was actually quite successful in Indonesia initially. However, the Indonesia-Malaysia conflict caused Indonesians to stop buying Malaysian products and finally led to the closedown of Petronas.

Ford, GM and Chrysler

Unlike Japanese car brands, these American automobile brands hardly worked in Indonesia. These brands had high expectation of sales and aggressive market strategy. However, Indonesia has a relatively weak automobile market as compared with other SEA regions, even with a population of 260 million.

Although they entered the market in Indonesia a few times over the year, they were always pushed to quit due to the lower sales figure compared with their country of origin.

Nando’s

Nando’s once opened a store in a mall and soon after had the same fate as other brands as mentioned earlier. This brand failed mostly because Indonesian would prefer a chicken dining place that was more affordable.

In addition, in a country like Indonesia that has all sorts of spices in their food, the different sauces options of Nando’s didn’t seem as unique.

WHAT TO AVOID IN INDONESIA AS A BUSINESS

Indonesia is one of the most diverse countries in the world. Not only you have to deal with massive differences between poor and rich people and their purchasing power, but targeting all the citizens at the same time is hampered by different religions, traditions and lifestyle.

Although Indonesian GDP showed signs of tremendous growth in the past years, Indonesia remains a developing country and should not be approached in the same way as developed nations. The minimum wage in Indonesia differs based on regions, and the location of your business is thus a very strategic decision.

Indonesians are a proud nation with a strong feeling of unity and support towards local brands. Companies that somehow insult or do not comply with traditional values and culture will soon suffer from antagonism towards their products and services. Not to forget the powerful role of social media in Indonesia that can destroy your business or cause a drop in your sales within a few days. One example for all might be Bukalapak’s CEO’s controversial tweet in support of the LGBT community in Indonesia.

So, what should you not do when expanding to Indonesia?

  1. Remember that what worked elsewhere might not work in Indonesia
  2. Do not pick the biggest market but focus on its segments
  3. Never underestimate the impact of culture traditional values in Indonesia

Want to know more? Purchase a business from Cekindo, and we will be happy to support you on your business journey, so you will not fail in Indonesia.

Related Posts

Have You Done Accurate & Equal Background Checks? Check These 5 Items First

Have You Done Accurate & Equal Background Checks? Check These 5 Items First

Small Business Ideas in Indonesia for Little or Almost No Cost

Small Business Ideas in Indonesia for Little or Almost No Cost

Contact Us

    Footer

    Jakarta – Slipi

    Grand Slipi Tower 9th fl. (Unit G)

    Jl. Letjen. S. Parman Kav. 22-24

    Palmerah, West Jakarta 11480

    Indonesia

    +6221 80660900

    Jakarta – Kuningan

    AXA Tower 36th fl. Kuningan City

    Jl. Prof. Dr. Satrio Kav. 18

    South Jakarta 12940

    Indonesia

    +6221 50101510

    Jakarta – Kebon Jeruk

    Business Park Kebon Jeruk, Blok H1-H2

    Jl. Raya Meruya Ilir No.88

    Jakarta Barat 11620, Indonesia

    +622180660900

    Bali

    Istana Kuta Galeria

    Blok BW 2 No. 3A

    Jl. Patih Jelantik, Kuta, Badung

    Bali 80361, Indonesia

    +62361 2090200

    Semarang

    Ruko Peterongan Plaza Blok C-2

    (in front of Sri Ratu Peterongan)

    Jl. MT. Haryono No.719

    Semarang 50242, Indonesia

    +6224 86001600

    Privacy Policy · © 2021 · Cekindo Business Center

    Pre Order Visa Promo - Popup Banner

    ×
    X
    REGULATION UPDATES:
    Due to the emergence of a new COVID-19 variant, Indonesia will close its borders to foreign travelers until 28 January 2021. With the exceptions of foreigners with KITAS and KITAP, and holders of diplomatic and official stay permits (ministerial level). Please note, all Travelers are subjected to strict COVID-19 protocols (e.g.: Multiple RT-PCR tests, designated quarantine accommodations and self-funded hospitalization).
    The Ministry of Manpower of the Republic of Indonesia has temporarily suspended all new Visas and KITAS applications until 28 January 2021. Employed Foreigners (holding an existing and valid KITAS) who are currently in Indonesia, may file for an extension under their Employer.
    If you require more guidance during this period, please get in touch with our teams for the latest updates.
    Further details on COVID19.go.id
    We use cookies to improve and customize your browsing experience. You are deemed to have consented to our cookies policy if you continue browsing our site.OkPrivacy policy