Indonesia : Branding Vital For Local Garment Sector

Clothes having brands like Kenzo, St. Michael and Nino Cerruti or shoes carrying Reebok tags are made in Indonesia whereas Clothes from other major brands are also made in countries like India, China and other developing countries.

Not many people knows that Indonesia is a "tailor shop" for these internationally renowned brands. While garments were once a major earner for the country, most garment manufacturers have to fill orders for international brands. Obviously, cheap labor is one of the reasons they get their products made here.

The textile and garment industry has been further hit by the depreciation of the rupiah and the costly imported machines and other elements. Things have also been made more difficult as banks are not in a position to provide loans to this unpromising sector.

What is needed is branding, which offers the most strategic value in marketing. When the economic crisis hit, the country's tailors suffered while the international brand owners remained relatively safe and secure. Another example was when there were demands here for higher wages and these brand owners just relocated their manufacturing plants to countries such as Bangladesh, Vietnam and China. This was evident in the case of Nike shoes, which only cost some US$10 to produce but are sold in the United States for 10 times the manufacturing cost.

Establishing a brand equity -- one that is as solid as Nike's, for instance -- is not an easy job. But Indonesian companies have to have to start thinking about branding or forever remain the poorly paid producers of quality and original branded products that are owned and marketed by outside parties. Also, the cost of our labor is no longer competitive in comparison with other developing countries, meaning Indonesia might not even be able to fill the role of "tailor shop" in the future.

While our marketing experts agree that branding is one of the strongest elements of marketing, the country still remains a nation of consumers not producers of leading brands. Everywhere we go we are surrounded by all sorts of branded products, from cars and shoes to dresses and food: BMW cars, Armani shirts, Ungaro perfume, Bally shoes and McDonald's burgers.

The strength of branding is also proven by the crowds flocking to sales and factory outlets that carry "branded" items at discounted prices.

How strongly a brand influences consumers is illustrated even by the extension products launched by McDonald's, like its Happy Meal, which is another success story in that brand's entirely solid image.

In view of the importance of branding, it is high time that Indonesian businesspeople and manufacturers rolled up their sleeves and started working toward achieving this asset. Now more than ever, products without a solid brand do not stand a chance of success in today's merciless marketing battle.