When a leading skincare company specializing in skincare sought to expand its operations into the Indonesian market, it turned to ASEAN Business Partners (ABP) for expert guidance. Known for their comprehensive market insights and strategic advisory services, ABP played a pivotal role in steering the company towards a well-informed decision, ultimately advising against market entry due to critical local considerations.

The Client and Their Aspirations

The client, a well-established skincare company, had built a strong reputation for producing high-quality skincare and supplements. Recognizing the growing demand for skincare products in Southeast Asia, they identified Indonesia as a potential market for expansion. The company aimed to leverage the rising consumer awareness and preference for premium skincare solutions.

ABP’s Advisory Role

ABP undertook a meticulous and multifaceted approach to assess the feasibility of the skincare company’s entry into the Indonesian market. Their focus particularly was on collagen-based products. The process involved extensive research and a thorough understanding of local consumer preferences, regulatory requirements, and cultural nuances.

Market Analysis

• Consumer Preferences: ABP conducted a detailed analysis of Indonesian consumer behavior and preferences, focusing on the skincare segment. This involved examining trends, demand for collagen-based products, and overall market potential.
• Regulatory Landscape: ABP explored the regulatory environment in Indonesia, paying particular attention to the standards and requirements for skincare products, including safety, labeling, and ingredient approvals.

Cultural and Religious Considerations

• Pork-based Ingredients: A key issue identified was the use of porcine-based collagen in the company’s products. In Indonesia, any products containing pork or pork derivatives are generally not accepted by the Muslim majority. This created a substantial challenge for the skincare company’s skincare and supplements, which were not compliant with halal standards.

Strategic Advisory

• Recommendation Against Market Entry: Based on the comprehensive analysis, ABP advised the skincare company that entering the Indonesian market with their current product line would not be advisable. The presence of pork-based ingredients in their skincare and supplements posed a significant obstacle, as it would likely lead to limited consumer acceptance and potential regulatory challenges.
• Alternative Strategies: ABP suggested alternative strategies for the company to consider. These included exploring markets with fewer halal restrictions or modifying their product formulations to meet halal standards and seeking the necessary certifications for future market entry.

Understanding local market dynamics and cultural sensitivities is crucial for any business looking to expand internationally. Our goal at ABP is to provide our clients with comprehensive insights and strategic advice, ensuring they make well-informed decisions that align with local regulations and consumer preferences.” – KAVITA PANDA, COO at ASEAN Business Partners.

ASEAN Business Partners (ABP) demonstrated its value as a trusted advisor by providing the skincare company with critical insights and strategic advice. By identifying the significant cultural and regulatory barriers related to halal compliance and the use of pork-based ingredients, ABP helped the company avoid potential pitfalls and make an informed decision about their market entry strategy. This case underscores ABP’s expertise in understanding local market dynamics and providing tailored advisory services that ensure long-term success and sustainability for their clients.

For companies looking to expand into new markets, particularly in the diverse and complex ASEAN region, ABP’s strategic guidance and market expertise can be invaluable. By addressing local nuances and offering actionable insights, ABP ensures that businesses are well-prepared to navigate challenges and seize opportunities in their expansion endeavors.