The British Chamber of Commerce (BritCham) actively supports the activities of the Professional Women’s Group (PWG). In July PWG hosted a huge player in beauty industry, L’Oréal Indonesia. We invited Umesh Phadke, the President Director of PT L’Oréal Indonesia, to share the company’s journey in Indonesia.
What do you think of Indonesia’s beauty market? Does L’Oréal feel challenged by the rise of domestic cosmetics?
Indonesia is possibly the most exciting country in the ASEAN region. That’s true for all markets and cosmetics are no exception. In terms of cosmetics, it is one of the fastest growing country in the region and L’Oréal is participating in this growth very actively. We have been participating in this growth for more than four decades. In terms of being challenged by local competition, we are the number one beauty care company worldwide. So, we’ve been dealing with global competition for all the time that we had been in the market. Competition is actually great because it creates innovation in the market, creates dynamism in the market.
In 2016, the Indonesian Trade Minister declared that all retail companies are required to have 80 per cent of products produced domestically. How did L’Oréal react to this policy and what kind of cooperation has L’Oréal offered to local entrepreneurs?
L’Oréal has been in Indonesia for over four decades. We were possibly committed to Indonesia even before the Indonesian story became one of global growth. We established our factory many years ago, we expanded it to make it one of the world largest factory in 2012. So, a large part of what I sell in Indonesia comes from our factory in Jababeka; we’ve been producing L’Oréal Paris, Garnier and a lot of our important brands over there. Having said that, we are a global player and have 35 brands in our portfolio. The Indonesian government is in fact a great partner for us, in terms of regulatory, industry, ministry, and BKPM. Because we are an important investor, we help to grow the Indonesian market, develop Indonesian talent, we’ve been investing in growing Indonesian talent in terms of beauty market, be it beauty adviser, hairdresser, marketing talent and business management for all the period we’ve been here.
In relation to domestic collaboration, what does L’Oréal think about collaborating with local talent and influencer in terms of digital marketing?
Digital is the new way of marketing, although actually it’s not new anymore, IT IS the way of marketing and L’Oréal has been at the forefront of this. We declared early in the decade of this millennium that it would be the digital millennium. We’re possibly one of the first FMCG companies to get on with this and we invest very heavily, not just in terms of media but in terms of capability.
What kind of digital marketing strategies L’Oréal think fits Indonesia market best? Also, how the rise of e-commerce platforms, especially in Indonesia help sales?
E-Commerce is a channel that will contribute a significant amount of sales in Indonesia, both in terms of FMCG and other categories in the next 5 to 10 years for sure. It’s a very active space with the raise of local giants like Lazada, Shopee, Blibli, Tokopedia, BukaLapak, and many others who are coming up and also specialty players. Indonesia offers a great market for E-Commerce because of the sheer size of the country. It is virtually impossible to get all the product distributed across all the islands and the cities physically, it is also very difficult to reach consumers through physical retail. E-commerce offers a very convenient way for consumers to dab into global innovation, immediately and get them within 24 to 48 hours.
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