Exploring The Regional Market for Indonesian Products: The 14th China Food Trade Fair

During this mission, MoMSME as SIPPO’s Business Support Organization (BSO), supported five high qualified suppliers on natural and food ingredients such as spices, coffee, durian, bird’s nest and spirulina to join in the Indonesian Pavilion in the exhibition. In preparation of this event, SIPPO supported the BSO and the selected suppliers in developing pitch deck presentation to ensure all suppliers will be ready for the exhibition. During the mission itself, SIPPO supports day to day coaching of trade fair management including how to optimize the in-bound sales and how to strategize the outbound sales, as well as hands on learning on market intelligence both for the BSO and the suppliers. Positive results gained from SIPPO and MoMSME involvement in this event, as some suppliers received strong interest from China buyers and extensive feedback for potential collaboration in the near future.

There are at least three critical lessons learned during the trade fair regarding the China market. First, it is necessary for Indonesian suppliers to follow the China market regulation and import requirement, mainly on The General Administration of Customs of China (GACC). GACC is a custom clearance in China that governs the food safety and a mandatory registration for all foreign food exporters to register their warehouse to the competent authority of China, completed with a traceability system in place.

Second, fulfilment facilities become a crucial aspect that needs to be prepared prior entering the China market. The Chinese market is characterized by consumers’ expectation that products are pre‑positioned domestically and can be delivered quickly for each order. In this case, digitalisation will hold an important role to support the warehouse management, product promotion, and traceability of incoming and outgoing goods. A quick follow up and support from the Indonesian government is needed to ensure a smooth penetration of Indonesian products to China.

Third, China has a huge demand for the products, but it comes with a very competitive price. Chinese factories are technologically advanced and highly automated, enabling them to lower labour costs. By contrast, Indonesia still relies heavily on manual labour, creating a price gap in the final products.

Whilst the market is huge and interesting, there are still some challenges that needs to be addressed and prepared by Indonesian government and Indonesian suppliers. In response to this situation, SIPPO will support in training on China import regulations, as well as will collaborate with other relevant market actors and service providers to find a solution and to advocate the development of fulfilment facilities in China. In addition, SIPPO will also support in the establishment of traceability system and CRM database to enhance the promotion activities. Therefore, SIPPO looks forward to building stronger and more continuous collaboration with the BSO, SMEs, and other relevant actors in Phase 3.