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Trade Focus
Allan Majuru
ZIMBABWE is becoming more integrated in global supply routes, with new markets presenting export opportunities for local products and services.
In fact, buyers across the world are now looking at Zimbabwe as a source market, thanks to the quality of local products relative to what other countries offer.
This growing appetite for Zimbabwean goods follows a robust campaign by President Mnangagwa to increase the visibility of local products in regional and international markets. With the current approach on economic diplomacy, several export promotion activities have been undertaken in recent years by the national trade development and promotion agency — ZimTrade.
These endeavours have boosted the good reputation that precedes the exportation of locally produced goods and an array of value-added services.
Driven by the growing interest in these goods and services, Zimbabwe is unlocking new markets, in line with the target of diversifying export destinations as a response to challenges posed by overdependence on a single market.
As part of the activities to identify and unlock new markets, ZimTrade recently concluded a market scan of Indonesia. The major objective was to identify low-hanging fruits that can provide a quick win for local exporters, who want to land products in that market.
Full results of the scan will be shared during a dissemination seminar to be held in August this year.
About Indonesia
Indonesia, a nation of over 270 million people, is Southeast Asia’s largest economy and one of the world’s major emerging markets.
Its economy, characterised by a diverse industrial base and increasing consumer demand, has been expanding rapidly.
Its strategic location, abundant natural resources and large labour force make it an attractive market for international trade.
The country’s major economic sectors include agriculture, manufacturing, services and mining. Industry contributes around 40 percent to the gross domestic product (GDP), with manufacturing being a significant sub-sector. The other significant sector is services, which include finance, tourism and telecommunications.
Opportunities also abound in agriculture.
Importing from Africa Indonesia’s imports from Africa have experienced a significant surge, increasing by 57 percent from US$6,5 billion in 2018 to US$10,2 billion in 2022. This substantial growth reflects a deepening economic relationship between Indonesia and the African continent, with total imports from Africa now accounting for 4 percent of Indonesia’s overall imports, which totalled US$237 billion in 2022, according to Trade Map.
Despite starting from a relatively low base compared to other regions, trade between Africa and Indonesia has been steadily growing over the years.
This upward trend indicates a promising future for bilateral trade, with both regions benefitting from the exchange of goods and services.
The major commodities driving Africa’s exports to Indonesia include minerals, coffee, tea, edible fruits and tobacco.
These products have become essential imports for Indonesia, highlighting the diversification of trade relationships and importance of African exports to the Indonesian market.
Opportunities
There are opportunities for Zimbabwean exports in Indonesia.
Urbanisation and the growing middle class are key drivers of demand for high-quality horticultural produce, food products and personal care items.
The willingness of Indonesian importers to source from Zimbabwe highlights the potential for increased trade and economic collaboration between the two countries.
Currently, Zimbabwe is exporting tobacco and cotton to Indonesia.
While these exports are significant, there are emerging opportunities for local businesses to diversify and increase their presence in Indonesia’s vibrant market, particularly in the horticulture and essential oils sub-sectors. Indonesia’s demand for diverse and high-quality food products presents a lucrative opportunity for Zimbabwean exports such as blueberries, avocados, macadamia nuts and essential oils, including marula and baobab oil.
Indonesia is a substantial importer of horticultural products, and the increasing demand for these goods can provide a significant boost to local agriculture.
Blueberries produced in Zimbabwe are already well-known for their quality by some Indonesian importers.
For blueberries, there is a specific market preference for larger sizes, with a diameter of 18mm or more being particularly desirable. This preference indicates a niche market that local producers could target to gain a competitive edge.
The existing trade between Zimbabwe and Indonesia, particularly in agricultural produce, provides a solid foundation for introducing new high-value products such as mange tout and sugar snap peas.
Additionally, there is potential to tap into the market for products that are already popular, like sweet potatoes, where Zimbabwe’s top-quality produce could carve out a significant market share.
Importers have also expressed willingness to purchase Zimbabwean macadamia nuts and avocados as well.
In addition to horticultural products, the essential oils market in Indonesia offers significant potential due to robust growth of the personal care manufacturing business.
Products like baobab oil and marula oil are already recognised in the market, and most buyers are familiar with their performance. These essential oils are widely used by cosmetics manufacturers and personal care therapists, indicating a much larger market that Zimbabwean businesses can tap into.
However, entering this market requires navigating specific regulatory requirements. Importing essential oils into Indonesia necessitates obtaining an import licence and FDA registration before distribution can occur.
To ensure competitiveness and acceptance, Zimbabwean manufacturers must meet several requirements.
These include conducting in vitro tests, in vivo tests and efficacy tests.
Additionally, some buyers prefer having a halal certificate.
This process applies equally to essential oils used in manufacturing and those sold directly to retail customers.
Unlocking market access
To successfully introduce and establish these new products in the Indonesian market, Zimbabwean exporters should consider collaborating with local distributors and retailers.
Partnerships with established local businesses can provide valuable insights into consumer preferences and market dynamics, helping to tailor products and marketing strategies accordingly.
Additionally, these partnerships can ensure a smooth distribution process, reducing the logistical challenges associated with entering a new market.
Investing in marketing and branding efforts is also crucial.
Educating consumers about the benefits and uses of Zimbabwean products, including organic produce, can drive demand and increase market penetration.
Highlighting Zimbabwe’s reputation for producing top-quality horticultural products through targeted advertising, social media campaigns and participation in major exhibitions in the market can create a strong brand presence in Indonesia.
Furthermore, addressing regulatory requirements and ensuring compliance with Indonesian import standards are essential.
This includes obtaining the necessary certifications, such as halal certification, and adhering to quality and safety standards.
Allan Majuru is the chief executive officer of ZimTrade.
Online Reporter