Country Spotlight: Indonesia

Indonesia: Diverse Cultures, One Goal

Indonesia has 34 provinces with a total population of more than 270 million people. West Java is the province with the largest population of 48 million people. East Java and Central Java hold the second and third positions. DKI Jakarta ranks first in population density (15,978 people per km2). The province with the largest area is Papua with an area of 319 036.05 km2, making up Indonesia’s 16.64%.

Tourism is an important economic sector in Indonesia. In 2019, tourism ranked third in generating foreign exchange revenues after oil and gas commodities and palm oil. In 2019, the number of foreign tourists who visited Indonesia was more than 16 million. Based on data from the Central Bureau of Statistics, the provinces that are most frequently visited by tourists are Bali, with more than 3.7 million, followed by DKI Jakarta. Prambanan and Borobudur temples, Toraja, Yogyakarta, Minangkabau, and Bali are examples of cultural tourism destinations in Indonesia.

There are 50 national parks in Indonesia, 7 of which are included in UNESCO World Heritage Sites. Lorentz National Park in Papua, Ujung Kulon National Park, Komodo National Park, Sembilang National Park, Gunung Leuser National Park, Kerinci Seblat National Park, Bukit Barisan National Park.

Transportation

The most common means of transportation in Indonesia include ferries and other ships, as well as a wide variety of road vehicles, with limited rail services, and a wide range of commercial aviation services.

Since Indonesia is an archipelagic country, water transportation is an important means of connecting many places in the country. Vessels that are widely used include large container ships, various types of ferries, passenger ships, sailing ships, and small motorized vessels. Bus services are available in many areas, especially in Sumatra, Java and Bali.

In smaller areas, road transport is mostly served by minibuses or small vans. Buses and vans are also public transportation within the city. Many cities have their own means of transportation that can be rented, such as taxis, bajaj, rickshaws, motorcycle taxis, wagons, etc.

Direct Selling in Indonesia

The direct selling industry makes significant contributions to the economy in Indonesia. During 2021, it contributed 12.2 T and even during the pandemic in 2020, it was able to provide 16.3 T. This contribution is a result of the hard work of 8,771,943 direct sellers (2021 figure), mostly part-timers.

Based on the survey results from the WFDSA (World Federation of Direct Selling Associations), wellness products generated 65% of the total volume. Cosmetics & personal care’s share was 21%, foodstuff & beverages’ 4%, clothing & accessories’ 3%, home care’s 3% and household goods & durables’ 3%.

Direct Selling Regulations

Currently the direct selling industry is regulated by “Law no. 7 of 2014” and “Government Regulation No. 21 of 2021”. Currently, the permits for managing direct sales businesses are through the RBA Online Submission System (OSS) with KBLI 47999 which makes it easier for both foreign and local companies to process permits.

Foreign direct selling companies can invest 100% foreign capital with an authorized capital above 10 M Rupiah, but having one Indonesian Director and one Indonesian Commissioner are required.

Direct Selling During the Pandemic

The economic condition since the COVID-19 pandemic in Indonesia has had a major impact on people’s lives, especially for business people. Government regulations have tightened the space for people to move in their activities. Many companies have been laying off and terminating employees. All forms of business fields experienced a decline in growth. But even during the pandemic period in 2020, the direct sales industry was able to generate16.3 T.

The positive thing is that we are “forced to be literate” in technology in our daily lives and forced also to care more about our health. Some MLM companies, especially those in the supplement sector, have increased. However, companies selling other products also had a boost, as people whose employments are terminated turned to join direct selling companies.

Risks and Threats

Prohibition of selling products on the market place

Direct selling is currently facing the challenge of government regulations regarding product prohibition in the market places, and companies are facing sanctions for violations. Indonesian Direct Selling Association (APLI) has taken various steps to stop or reduce sales violations in the market place by cooperating with the authorities. This is done through an agreement between APLI and the E-Commerce Association, which aims at monitoring the products sold in the market places and at taking down direct selling products.

“Money Games”

Fundraising through a pyramid scheme under the guise of MLM with a digital trading trading system, where software products serve as camouflage.

APLI (Indonesian Direct Selling Association)

Established in 1984, APLI is the first direct selling association in Indonesia.

For 38 years, it has dedicated itself to the industry in Indonesia and it has been recognized by the Ministry of Trade. APLI is also the only direct selling association in Indonesia that has been recognized by the World Federation of Direct Selling Associations (WFDSA). Currently, APLI has 108 foreign and local member companies.

In order to promote the direct selling industry and the association itself, APLI routinely conducts the following activities:

APLI Talks

This activity is carried out interactively by inviting several speakers who discuss certain topics that are hot issues in the direct selling industry.

APLI Awards

As an internal event held with the members, APLI gives awards to direct sales actors/company members to recognize their contributions to the industry.

The top two awards are “Top Sales” and “Top Sponsoring”.

APLI Exhibition

This activity is carried out to introduce the direct selling industry and the best products from member companies to a wider community so that they feel closer. Usually this activity is carried out for three days at a certain location.

APLI also routinely conducts seminars involving stakeholders in the relevant government offices, holds member meetings, CEO forums and members-only sessions to strengthen the relations within the industry.

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Written by Indonesia Direct Selling Association (APLI)

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