01/07/2008 - Pioneers with a wealth of experience


Starting in March 2008, Tchai International and Reklet Group entered into a joint venture in Indonesia under the name Reklet-Tchai Indonesia (RTI).

Both companies are leaders in the design and production of in-store and out-store communication solutions, such as display materials (wall, floor and showcases), shelf presentations, shop in shop systems, digital media/narrowcasting and complete shop fittings. In brief: the visual communication of brands and formulas and everything that goes with it.

It may be a rather surprising collaboration, but it is most of all a very logical one. This is because these two companies linking up means nearly 100% of the in-store and out-store communication market can be reached. Since 1982, Reklet Groep has acquired a reputation in visual communication for the retail and hotel and catering sectors, for companies such as Kruidvat, C1000, Trekpleister and Ici Paris. It also develops concepts for fast food restaurants.

Tchai International is a leading family company, specialized in in-store communication and has worked for more than 45 years for national and international A-brands (Samsung, Polaroid, Keune, Forbo Flooring, Yamaha, Philips and Revlon) and retail organizations (Pearle, Hema, Cadillac, Hummer). As no other, Tchai understands how consumers behave when shopping and what influences them.

Why Indonesia?
Both companies have plenty of international experience. Reklet Groep has branches in Poland, Russia and Ukraine. Tchai International has lots of experience in Europe and North America and, more recently, has established a sales office in India and has production facilities in China and Eastern Europe.

Indonesia, however, is not the easiest place to do business. Consequently, the competition in the sector focuses their efforts mainly on India and China. This therefore means there are opportunities in Indonesia for entrepreneurs with vision and guts. The general managers of Reklet Groep and Tchai International, Evert van der Waal and Ed Tchai, see plenty of opportunity in Indonesia. It is a growing market (exceeding 14%) and with a population of 250,000,000, the country is certainly very interesting for business.

Moreover, the general manager of Reklet-Tchai Indonesia, Edwin Weert, has a deep knowledge and affinity with Indonesian society, and that has paid off well. As stated above, together both companies cover almost the entire in-store and out-store communication market. This joint venture is therefore taking place at the right time with the right people.

But that does not mean the entrepreneurs are not aware of the difficulties they may face. The culture of commerce in Indonesia is truly different to other places.

Modern trade, traditional trade
Firstly, we need to distinguish between traditional trade and modern trade. Large shopping centres have for years been part of the landscape in Indonesia’s large cities. This is a market where both multinationals and local companies have conquered important positions. However, the design and presentation of products, the quality of the communication material and interior components have lagged behind. The aim of RTI is to raise the quality to the level of West European standards.

Reklet-Tchai also sees opportunities in traditional trade, which covers 95% of the market. Small shops and general stores are experiencing strong growth thanks to the improved economic climate. The presentation of products in this sector, however, is more akin to that of Europe in the 1960’s. Major brands would like to see this change. But local competitors in communications are not up to the task. A golden opportunity for Reklet-Tchai Indonesia.


Different customs
Of all East-Asian countries, Indonesia remains the most traditional and therefore a far more difficult country to do business in than, for example, India and China. Western businesspeople in Indonesia are not always aware of the differences in customs. Weert: ‘You absolutely need to know about the social and cultural environment of the Indonesian. It’s just as important, if not more so, than studying the economic climate or making a business plan. Without knowledge of the culture, no business will get off the ground.’

Reklet-Tchai Indonesia is established on the island of Java, in Jakarta. Java lies at the political, cultural and geographic centre of the Indonesian nation. Although Java only represents 7% of the vast territory of Indonesia, the country’s population is 45% Javanese. Javanese traditions and relationships completely dominate the Indonesian bureaucracy, government and army. This is why it is so important to understand the “Javanese” perspective when talking about Indonesia. Even correct use of language requires an understanding of the cultural relationships. Misunderstandings and miscommunication by westerners in Indonesia often lead to serious problems in doing business.

Javanese society and culture is a complex mixture of modern, traditional and religious influences. One is expected to show the right respect in how one speaks and acts. However, it is also a hierarchical society with a social structure where everyone knows their place and duties.

Weert: ‘The average westerner in Java tries to treat everyone equally. This often causes confusion and discomfort among the Indonesians. Moreover, westerners often miscalculate the depth of their relationship with Indonesian companies. One and one is not always two, but sometimes also three. Indonesia is changing and this is a difficult process for all Indonesians. The customs and ways of thinking of a generation do not disappear overnight. It could take 100 years. An important reason is the deeply rooted “KKN” (Corruption, Collusion, Nepotism).’

Low working level
Although Indonesian labour is relatively cheap, it compares poorly with other economies in terms of productivity. Companies often find themselves having to train and teach skills to workers. Indonesian labours do not like working with equipment and machinery. As fifty percent of the population is unemployed, manual labour may be good for providing employment but not so good for the efficiency of the work and the quality of the products.

Recruiting administrative or professional employees from local universities is often an excellent way of introducing talent to an enterprise. Yet even at this level, basic skills such as processing data and writing reports, leave much to be desired.


Despite all these problems, Reklet-Tchai see many opportunities in Indonesia. Weert: ‘With the right understanding of the cultural and social rules as well as the national laws, business and investment in most parts of Indonesia are fairly safe and lucrative. Promising changes are underway here. This is why Indonesia is an attractive place to invest and a lucrative market for western products.’


Pioneers
The managing directors of Reklet Groep and Tchai International view themselves as pioneers in Indonesia, albeit pioneers with a wealth of experience and proved products. Both companies have ample business relations and will of course make use of them in Indonesia. And yet Tchai and Van der Waal believe that it works both ways: ‘Of course we will be transferring our experience to Indonesia, but we also believe that the knowledge we gain in Indonesia can be used elsewhere.’

Want to know more about the companies and products? Please visit the website.
www.reklet-tchai.com