After establishing a successful distribution business in China with over 170,000 point of sales, the company is rolling out its business model to other Asian countries, with a special focus on Indonesia. With a population of 274 million, the country is viewed as a key growth market.
The Indonesian market presents Sika with huge opportunities. In 2022 alone, the distribution business grew by 18%. “Within two years, we managed to more than double the number of point of sales from under 10,000 to more than 22,000.” This rise is attributable to the increasing number of new distributors in areas such as Sumatra and Java,” explains Basuki Setiawan, Channel Distribution Manager and Target Market Manager in Building Finishing. The distribution business is aligned with Sika’s “Customer First” strategy, which is all about being close to customers and enabling all countries to develop their own strategy for their local market. Sika will aim to expand the number of point of sales offering Sika products in the Asia/Pacific region outside of China to 100,000 by 2028.
Well-Considered Market Penetration
The success of the strategy is based on the classic elements of market penetration, expanding Sika’s product portfolio, and increasing brand awareness. The products are delivered through a large network of distributors to building supply shops, where they are then sold on to small and medium-sized builders and other tradesmen. The strategy is developed continually with advanced e-commerce platforms, social media measures and various initiatives aimed at expanding business activities in a targeted way. “Market penetration is focused on the further expansion of the distributor network and by extension of the retail store portfolio, as well as on the diversification of the product spectrum. We offer not just waterproofing products, but also tile adhesives, tile grouts and jointing mortars, wall coatings and admixtures,” explains Basuki Setiawan.
Success Thanks to Strong Brand Awareness and Great Team in Indonesia
Indonesia is an emerging market at a turning point. The economy is booming. Sika currently generates 85% of its turnover in the Indonesian distribution business through so-called “momand- pop” stores. “For this market we focus on waterproofing products, as well as mortars for floors and walls. These two product categories are the most represented in all stores. Waterproofing is especially important since Indonesia experiences high rainfall, meaning that we at Sika can offer products that are an ideal fit for this market”, explains Basuki. Sika enjoys a high level of brand awareness in Indonesia. For Basuki, this is a crucial part of Sika’s success: “It helps us drive the retail business forward. Homeowners don’t usually do the work themselves. They get a specialist to do it – and most of them already know Sika.” By regularly collaborating with consumers, Sika can better tailor its products, improve the level of technical knowledge through training, and build more trust. Basuki is proud of Sika's achievements and his distribution team in Indonesia.