Step-by-step Guide for Indonesian SMEs to Export to Canada
Jakarta, Indonesia26-27 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
Canada-Indonesia Trade and Private Sector Assistance Project (TPSA)
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
4
Agri-food Clothing Other
Coffee
Pepper
Coconut oil
Sugar
Coats, jackets and blazers
Dresses and Shirts
Wooden furniture
Footwear
Introduction (continued)
• Export process
5
6. Entering the Market
7. Completing the Sale
8. Export Requirements
9. Import Requirements
10. Transportation and
Logistics
1. Export readiness
2. SWOT Analysis
3. Export Plan
4. Market Research
5. Marketing Strategy
Month 0-3 Month 3-6
1 YEAR PLAN
Month 6-12
BUSINESS
PREPARATION
MARKET
DEVELOPMENTMARKET ENTRY
STAGE ONE STAGE TWO STAGE THREE
Introduction (continued)
• 03 stages of export preparation
Stage 1: Business Preparation
• Step 1-Assessing Export Readiness
• Step 2-Conducting SWOT analysis
• Step 3-Preparing an export plan
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Canada-Indonesia Trade and Private Sector Assistance Project (TPSA)
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
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Internal External
Management support
Unique products
Value-added services
Track record
Financial position
Qualified staff
Business plan
Certifications
Expertise
Available time
Market research
Selling skills
Domestic sales
Quality standards
Access to capital
Marketing materials
Website
Language skills
Foreign contacts
Ability to travel
Relevant technologies
Risk factors
Others
Global economy
Growing industry
Competition
Currency valuation
Distance to market
Language
New trends
Others
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)
• Executive summary
• Introduction
• Firm overview
• Products and services
• Export objectives and goals
• Canadian market overview
• Market entry strategies
• Regulatory and logistical issues
• Risk factors
• Implementation plan (including financial plan)9
Reminder
Before the development of
an Export Plan, the
Indonesian firm will need a
current and comprehensive
Business Plan. IETC and
other resources in
Indonesia can help
Indonesian firms in
preparing business plans aswell as export plans.
Stage 2: Market Development
• Step 4-Market Research
• Step 5-Developing a Canadian Marketing Strategy
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Canada-Indonesia Trade and Private Sector Assistance Project (TPSA)
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
• Incorporate information into Export Plan
• Canadian market research checklist (please see handout 4)
• Political and economic highlights
• Consumer trends
• Business information
• Partnering options
• Support for market-entry strategies
• Cultural considerations
• Travel tips
• Canadian market information
• Annex 611
A great source for Canadian
Market Information!!
TFO Canada’s website
(www.tfocanada.ca) is a great source
for Indonesian firms to access market
information for dozens of sectors in
Canada, including agri-food, textiles
and apparel, footwear, and furniture.
Stage 2: Market Development• Step 5- Developing a Canadian Marketing Strategy
• 5 Ps (Product, Price, Promotion, Place, People)
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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
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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
• Price
• Buying influences
• Consumer taxes
• Price list
• Pricing checklist (please see handout 5)
Source: Retail News Magazine, Market Pulse 2014
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What Influences a
Retailer?
Rating out
of 10
Excellent profit margin 8.6
Exclusivity in my area 8.2
Previous sales success 8.1
Availability 8.1
Cost 8.0
Design 7.9
Supplier's reputation 7.9
Good suggested retail
price point 7.8
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
• People
• Staff
• Partners 15
Please see handout 7 for Checklist for 5 Ps and handout 8 for Exporting Services
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
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Canada-Indonesia Trade and Private Sector Assistance Project (TPSA)
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 not17
Stage 3: Market Entry• Step 6- Entering the Canadian Market
• Intermediaries (please see handout 10 for how to choose intermediary)
• Importers/distributors
• Agents/brokers
• Trading house
• Retailers
• Chains
• Independents
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Example of Major* Canadian Importers in 2013
Product # of Canadian
Importers
Location
Pepper (HS 090411) 13 All of them are located in Ontario
and Quebec.
Men’s and boy’s
woven cotton shirts
(HS 620520)
86 While most are located in Ontario
and Quebec, some are located in
British Columbia, Alberta, and
Manitoba as well.
Wooden Furniture for
bedroom (HS 940350)
109 located in 9 provinces across
Canada.
* 'Major Importers' comprise those which collectively account for up to 80% of
all imports (in terms of $ value). This list does not include individuals or
importers whose importer numbers are unavailable. Source: Canadian
Importer Database
Finding Contacts
The Canadian Importer
Database contains a list of
Canadian importers by product
Canadian Company
Capabilities provides a list of
Canadian wholesalers by
product
30%Loblaw's
25%Sobeys
7%Metro
7%Independents
32%Other
Supermarkets & Grocery Stores$80 billion market (2014)
Stage 3: Market Entry• Step 6- Entering the Canadian Market
• Market snapshot (Apparel)
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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
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Stage 3: Market Entry• Step 6- Entering the Canadian Market
• Spotlight on Indonesia
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Who are some of the major buyers of Indonesian goods in Canada?
Furniture
Artemano
Barrymore Furniture
Canadian Tire Corp
Cantrex Nationwide
Group Inc
Ikea Supply
Indo Asian Carpet
Jordans Interiors
Pier 1 Imports
Footwear
Adidas
Nike
Asics
Converse
Apparel
GAP
Pld Navy
Mexx
Lululemon
Express Fashion
Apparel Canada Inc
Columbia Sportswear
Under Armour
Canada
Coffee
RGC Coffee
Café Vittoria
Royal Coffee Incorporated
Metro Logistics
Inc
Costco
Bridgehead
Stage 3: Market Entry• Step 6- Entering the Canadian Market
• How to find Canadian buyers
• Attending tradeshows (Canadian and International)
• Consulting Indonesian trade representatives and other entities in Canada (TFO Canada)
• Consulting Canadian embassy and other entities (TPSA office) in Indonesia
• Obtaining list of buyers
• Enhancing online presence
• Using search engine optimization
• Using Social media and E-markets
• Checking E-leads
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Stage 3: Market Entry• Step 6- Entering the Canadian Market
• Major trade shows in Canada
(please see handout 11 for tips on
how to prepare for attending a
trade show in Canada)
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Stage 3: Market Entry• Step 6- Entering the Canadian Market
• What Canadian buyers are looking for
• Good value and competitive pricing
• Reliability of product quality, continuous supply, and delivery times
• Good relationship and regular communication
• Competent & experienced staff
• Follow-up service
• Innovative products
• Communication
• Skype
• Reputation
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Stage 3: Market Entry• Step 7- Completing the sale
• Sales contract process• Receiving an inquiry
• Quoting a price
• Tips• 1st impression
• Sending samples
• Trial orders
• Negotiating a deal• Import terms
• Payment terms
• Delivery date
• Communication
• Dealing with risk & non-payment
• Incoterms
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Stage 3: Market Entry• Step 8- Meeting Indonesian export requirements (please see Annex-6)
• Requirements for all Indonesian exporters
• Legal entity
• TIN
• License
• Types of Indonesian exporters
• Manufacturer
• Non-manufacturer
• Tax procedure
• Export controls
• Export-free, Export-Controlled and Export-Prohibited goods
• Customs clearance
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Stage 3: Market Entry• Step 9- Meeting Canadian import requirements
• Border Inspection
• Canadian Border Services Agency (CBSA)
• Canadian Food Inspection Agency (CFIA)
• Other Canadian government departments
• Laws & Regulations
(please see handout 12 for import regulations)
• Federal, Provincial, Municipal
• Organic product requirements
• Automatic Import Reference System (AIRS)
• Intellectual Property Rights (please see handout 13 for types of IPR)
• Canadian International Property Office
• Combating Counterfeit Products Act
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Stage 3: Market Entry• Step 9- Meeting Canadian import requirements
• Classification of goods
• HS Code
• Determining HS code
• Tariffs and duties
• Tariff determination
• Rates of duty
• Duty-free & quota-free imports
• Rules of origin
• Tariff rate quotas & seasonal tariffs
• Anti-dumping and countervailing duties
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Indonesia is eligible for the Most
Favored Nation Tariff (MFN) rate
The tariff for exporting hiking footwear from
Indonesia to Canada will be the MFN tariff
(16%), while exporters from LDCT countries
– such as Cambodia – will have a tariff of
0%.
Stage 3: Market Entry• Step 9- Meeting Canadian import requirements
• Import documentation
• Releasing goods at the border
• Types of documents (see handout 14 for list of documents)
• Import control list
• Agri-products
• Firearms
• Steel
• International Import Certificates
• Prohibited goods
• Transshipment
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Stage 3: Market Entry• Step 10- Shipping goods from Indonesia to Canada
• Getting Indonesian goods to Canada
• By ocean
• By air
• By train and truck
• Canadian Port of Entry and Distribution within Canada
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Canada is larger than you think!
2nd largest landmass in the world,
Canada encompasses nearly 10
million square kilometers.
Up to eight hours to fly across the
country, and travelling by road or
train takes several days.
Stage 3: Market Entry• Step 10- Shipping goods from Indonesia to Canada
• Transportation intermediaries
• Freight forwarders
• Consolidators
• Customs brokers
• Packing the goods (please see handout 14 for Canadian import documentation checklist)
• Outer packaging
• Wooden crates
• Labels and marks
• Next steps• Start with the Business Plan then export readiness assessment then Export Plan
• Use the annexes
• Register with TFO Canada and implement the Export Plan
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Annexes• Annex 1: Useful resources & Contacts
• Annex-2: Trade Publications
• Annex-3: Canadian Business Associations
• Annex-4: Canadian Market Information
• Annex-5: Incoterms
• Annex-6: Indonesian Export Requirements and Processes
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Canada-Indonesia Trade and Private Sector Assistance Project (TPSA)
Zaki Munshi, Project Manager-Asia
TFO Canada
130 Slater Street, Suite 1025
Ottawa, ON Canada
K1P 6E2
T: +1 1613 233 3925
T: +1 800 267 9674
E: [email protected]; [email protected]
www.tfocanada.ca
Thank You!
Contact us:
@TFOcan
linkedin.com/TFOCanada
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Canada-Indonesia Trade and Private Sector Assistance Project (TPSA)