Canada-Indonesia Trade and Private Sector Assistance Project (TPSA) Step-by-step Guide for Indonesian SMEs to Export to Canada Jakarta, Indonesia 26-27 April 2016
Canada-Indonesia Trade and Private Sector Assistance Project (TPSA) Introduction Why export? • Why export to Canada? • Opportunities for exporting from Indonesia • to Canada • 03 stages of export preparation 2
Introduction • Why Export? • Increased sales & revenue Increased competitiveness in Indonesia • Reduced vulnerability • Higher profits • • Higher economies of scale Improved global competitiveness • Enhanced national and regional development • Why Export to Canada? • Import-oriented market • Diverse consumer tastes • Strong economy • • Increasing exports from South-east Asia to Canada Strong Canada-Indonesia partnership • 3
Introduction (continued) Opportunities for exporting from Indonesia to Canada • Agri-food Clothing Other Coffee Coats, jackets and blazers Wooden furniture Pepper Dresses and Shirts Footwear Coconut oil Sugar 4
Introduction (continued) • Export process 5
Introduction (continued) • 03 stages of export preparation STAGE ONE STAGE TWO STAGE THREE BUSINESS MARKET MARKET ENTRY PREPARATION DEVELOPMENT 6. Entering the Market 4. Market Research 1. Export readiness 7. Completing the Sale 5. Marketing Strategy 2. SWOT Analysis 8. Export Requirements 3. Export Plan 9. Import Requirements 10. Transportation and Logistics Month 0-3 Month 3-6 Month 6-12 1 YEAR PLAN
Canada-Indonesia Trade and Private Sector Assistance Project (TPSA) Stage 1: Business Preparation Step 1-Assessing Export Readiness • Step 2-Conducting SWOT analysis • Step 3-Preparing an export plan • 7
Stage 1: Business Preparation Step 1-Assessing Export Readiness • Export readiness checklist (please see handout 1) • General, About the firm, About the product/service • • Interpreting the score • Step 2--Conducting SWOT analysis Internal External Management support Expertise Marketing materials Global economy Unique products Available time Website Growing industry Value-added services Market research Language skills Competition Track record Selling skills Foreign contacts Currency valuation Financial position Domestic sales Ability to travel Distance to market Qualified staff Quality standards Relevant technologies Language Business plan Access to capital Risk factors New trends Certifications Others Others 8
Stage 1: Business Preparation • Step 3-Preparing an Export Plan Why is Export Plan so important? • Define target market, purpose of business activities • Identify SWOT and financial/other resource demands • Financing • Elements of an Export Plan (please see handout 2) • Reminder Executive summary • Before the development of Introduction • an Export Plan, the • Firm overview Indonesian firm will need a current and comprehensive Products and services • Business Plan. IETC and Export objectives and goals • other resources in Indonesia can help • Canadian market overview Indonesian firms in Market entry strategies • preparing business plans as Regulatory and logistical issues • well as export plans. Risk factors • Implementation plan (including financial plan) • 9
Canada-Indonesia Trade and Private Sector Assistance Project (TPSA) Stage 2: Market Development Step 4-Market Research • Step 5-Developing a Canadian Marketing Strategy • 10
Stage 2: Market Development Step 4-Market Research • Conducting market research • Primary and Secondary research • Things to remember (please see handout 3) • Time & resources • Multiple research methods • A great source for Canadian • Incorporate information into Export Plan Market Information!! Canadian market research checklist (please see handout 4) • TFO Canada’s website Political and economic highlights • (www.tfocanada.ca) is a great source • Consumer trends for Indonesian firms to access market Business information • information for dozens of sectors in Canada, including agri-food, textiles Partnering options • and apparel, footwear, and furniture. • Support for market-entry strategies Cultural considerations • Travel tips • Canadian market information • Annex 6 • 11
Stage 2: Market Development Step 5- Developing a Canadian Marketing Strategy • 5 Ps (Product, Price, Promotion, Place, People) • 12
Stage 2: Market Development Step 5- Developing a Canadian Marketing Strategy • Product • Design • Packaging • Requirements • Trends • Labelling • Language • Special requirements • Materials • Manufacturing process • Product attributes • Others • Competition (price, quality, design) • • Standards 13
Stage 2: Market Development Step 5- Developing a Canadian Marketing Strategy • Place • Canadian consumer preferences (design, quality, exclusivity, social and environmental • impact, customer service, price) Retail outlets/distribution channel choices • What Influences a Rating out Price • Retailer? of 10 Buying influences • Excellent profit margin 8.6 Consumer taxes • Exclusivity in my area 8.2 Previous sales success 8.1 • Price list Availability 8.1 Pricing checklist (please see handout 5) • Cost 8.0 Design 7.9 Supplier's reputation 7.9 Good suggested retail price point 7.8 Source: Retail News Magazine, Market Pulse 2014 14
Stage 2: Market Development Step 5- Developing a Canadian Marketing Strategy • Promotion • Advertising • Promotional materials (business cards, customer testimonials, brochures, media pieces, • website, videos, exhibits…. pls. see handout 6) • Listing and shelving fees Media • • Trade shows and personal visits Trade publications • Others (contests, direct mail, gift cards, coupons, give-aways, store demos, special • events etc.) Canadian advertising laws • Please see handout 7 for Checklist for 5 Ps and handout 8 for Exporting Services • People Staff • Partners • 15
Canada-Indonesia Trade and Private Sector Assistance Project (TPSA) Stage 3: Market Entry Step 6-Entering the Canadian Market • • Step 7-Completing the Sale Step 8-Meeting Indonesian Export Requirements • Step 9-Meeting Canadian Import Requirements • Step 10- Shipping goods from Indonesia to Canada • 16
Stage 3: Market Entry Step 6- Entering the Canadian Market • • 04 ways to enter Canadian market Direct or Indirect export • Incorporating business or opening a subsidiary in Canada • • Direct/Indirect export Margins • Direct vs. Indirect • Things to consider (please see handout 9) • Knowledge of Canadian market • Key contacts • Distribution methods • Canadian culture/language • • Additional investment required or not 17
Stage 3: Market Entry Step 6- Entering the Canadian Market • • Intermediaries (please see handout 10 for how to choose intermediary) Importers/distributors • Example of Major* Canadian Importers in 2013 Product # of Canadian Location Importers Pepper (HS 090411) 13 All of them are located in Ontario and Quebec. Agents/brokers • Men’s and boy’s 86 While most are located in Ontario Supermarkets & Grocery Stores woven cotton shirts and Quebec, some are located in $80 billion market (2014) (HS 620520) British Columbia, Alberta, and Manitoba as well. • Trading house Wooden Furniture for 109 located in 9 provinces across bedroom (HS 940350) Canada. * 'Major Importers' comprise those which collectively account for up to 80% of 30% 32% all imports (in terms of $ value). This list does not include individuals or Retailers • Loblaw's importers whose importer numbers are unavailable. Source: Canadian Other Importer Database Chains • Independents • Finding Contacts 25% 7% 7% The Canadian Importer Sobeys Independents Metro Database contains a list of Canadian importers by product Canadian Company Capabilities provides a list of Canadian wholesalers by product 18
Stage 3: Market Entry Step 6- Entering the Canadian Market • Market snapshot (Apparel) • 19
Stage 3: Market Entry Step 6- Entering the Canadian Market • Market snapshot (Home décor includes furniture ) • 20
Stage 3: Market Entry Step 6- Entering the Canadian Market • Market snapshot (Footwear) • • Footwear • Valued at CAD 4 billion • Low level of market share concentration (04 largest players control < 20.0% industry revenue) • Most shoe stores operate as non-chain retailers • Overwhelming majority of industry operators (99.4%) are small-scale. • Low barriers to entry: Many aspiring operators enter industry and induce greater competition 21
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