Business

Bain’s RI unit can be
region’s largest on growth

Global management consulting firm Bain & Company says Indonesia would be one of the “largest components” for the firm’s business in Asia Pacific as its growing economy spurs companies to rev up business proficiency.

Partner and director at Bain & Company, Jean-Pierre Felenbok, said Southeast Asia was the “fastest-growing cluster” in Asia Pacific.

“In the last five years, this cluster has recorded the highest revenue growth for Bain in Asia Pacific,” he said recently, adding that the cluster had exhibited double-digit growth in the past five years.

Based on data provided by Bain, Southeast Asia is the second-largest market in the Asia-Pacific region.

The cluster also makes up 20 percent of Bain’s Asia-Pacific market share.

Felenbok added that Indonesia was a “strategic priority” in the region, after China, given that it made up half the region’s overall economy.

“We believe Indonesia, because of its geographical size, will be among the third- to fifth-largest component for Bain here,” he said.

Bain recently reinforced its presence in Indonesia by establishing a country office earlier this year.

The consulting firm previously served the country through its Singapore office, which has existed for 20 years.

According to Felenbok, the firm decided to set up a full corporate office in Indonesia, after doing so in Bangkok and Kuala Lumpur in 2010, because the domestic market was “large and growing”.

“Having a local presence helps us to be more sensitive to local needs,” he said, adding that the firm had deployed one of the largest groups of senior partners and managers into Indonesia to cater to the growing needs of the local market.

He further added that half of the companies Bain had worked with in the last five years had been domestic state-owned enterprises, as well as public and private companies.

“Another 30 percent of our work is with multinationals, often regional representatives of their headquarters,” he said.

He added that on a sector basis, a majority of Bain’s clients were from the fast moving consumer goods (FMCG) industry, followed by those relating to oil and gas, financial services and private investors.

“From a sector point of view, and this depends on the year, about 20 to 30 percent of our client mix is from the consumer goods sector,” he said.

He added that this was natural given that consumer goods companies wanted to capture opportunities presented by the country’s economic growth that rallied up, in addition to business potential offered by the expansion of the domestic middle class.

“Consumer goods companies are looking to strengthen their market position through change management,” he noted.

Based on data from the Central Statistics Agency (BPS), Indonesia’s gross domestic product (GDP) grew by 5.81 percent year-on-year to Rp 2,210.1 trillion (US$215 billion) in the second quarter of 2013.

The growth was primarily driven by household consumption, which rose 5.06 percent; government consumption, which increased by 2.13 percent; gross fixed capital formation, which went up 4.67 percent, and the export of goods and services, which rallied by 4.78 percent.

Felenbok added that although Indonesia’s economy, as with domestic consumption, was set to slow down due to inflation, the mid-term outlook remained bullish.

“As the country improves its hard and soft infrastructure, such as health care and education, so the potential for more growth will increase,” he noted.

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