Running a successful business in Indonesia, a land filled with abundant business opportunities, diverse culture and breathtaking natural landscapes, is a dream of many.
Michal Wasserbauer, a foreigner from the Czech Republic, is one of the aspiring entrepreneurs that have realized that dream. Having lived in Jakarta with his wife and daughter for the past 10 years, Michal is the Co-founder and President Director of Cekindo Business International, a leading consulting company in Indonesia.
His internship at AIESEC, a non-profit organisation, brought him to Indonesia, where he also worked with a local government organisation SMESCO that supported Indonesian exporters and manufacturers. Unexpectedly, he fell in love with Indonesia because the Indonesians are always in a good mood and thinking positively. From a business point of view, he could see the abundant opportunities available.
Michal shared with Indonesia Expat about the driving force behind Cekindo’s establishment, how it has assisted thousands of companies from around the world to penetrate the Indonesian market, his professional advice, and a little bit about himself.
As the President Director and Founder of Cekindo, what inspired you to establish the company ten years ago?
Many factors inspired and motivated me to establish a business in Indonesia ten years ago. One of them was when I worked for SMESCO. I had the opportunity to meet many different Indonesian manufacturers, exporters, and international buyers to gain a better understanding of Indonesia’s international trade.
As a foreigner originally from the Czech Republic with a population of 10.5 million people, compared to Indonesia or Jakarta with a population of over 15 million people, I was amazed by the abundance of opportunities available when I initially arrived in Indonesia. After all, the European market was saturated after the economic crisis.
Filled with so much excitement and enthusiasm to start my business at that time, I realised how complex the overall process could be, in addition to the different regulations required to operate a company. With my educational background, I decided to change my initial business plan to focus on helping other entrepreneurs with much better experience than I had.
Despite the initial challenges, I believe it is still easier to start a business in Southeast Asia as an entrepreneur starting from scratch with limited capital. The market is less saturated and the operating expenses are lower compared to Europe.
Would you consider your own questions and concerns regarding Indonesia’s policies on business development and immigration triggered Cekindo’s establishment?
Having to go through the struggles and time-consuming challenges on my own was not easy. So, I thought to myself, if there could be a company providing professional help and guidance through this process with clarity, for a reasonable fee to save time and money while avoiding mistakes, it would be a great idea. Unfortunately, there wasn’t any such opportunity at that time. So, together with my friend and business partner, we decided to properly structure this idea and started offering it as a service to help make it easier for others, so that they would not have to go through this process on their own.
If you can highlight one point to acknowledge about Cekindo for foreigners living and/or visiting Indonesia, what would it be?
Cekindo is a corporate service provider with an established ten-years track record of assisting foreign companies in expanding to Indonesia through a one-stop business solution that covers services such as Company Registration, Accounting, Tax, Payroll, Visa and Product Registration. Until today, choosing the right partner to provide professional assistance for a smooth journey in establishing a strong foundation and ensure compliance for your company, from start to finish, remains one of the best decisions to make.
You started the company from scratch, while also being a foreigner in Indonesia. How was the experience for you?
Starting a business is always an exciting experience, especially if you are a foreigner in a new country and building it from scratch. Being a foreigner in Indonesia gave me a lot of advantages such as seeing things from a different perspective compared to the local entrepreneurs. It also helped to provide an opportunity to meet many interesting people and gain a lot of contacts faster.
On the other hand, as a foreigner, especially at the beginning, I lacked the knowledge of the language and local culture which limited my ability to utilise my network even better and sometimes brought me to the wrong conclusions and expectations. Only after a longer stay in Indonesia was I able to overcome these barriers and challenges that positively changed my overall experience.
But what was even more critical for my business was being a foreigner actively involved in the daily operations in my company, helping colleagues gain more understanding about international company standards, our foreign clients’ expectations, culture and necessity to sometimes motivate them to go out of their comfort zone to learn and achieve more than others.
Does being a foreigner make it more challenging to build and run a leading consulting firm?
It can be a huge advantage if you are able to build a solid, professional and experienced local team with members that complement each other. A consulting firm is about people. Your team is your asset and if you are a one-man show, it will be challenging, whether you are a foreigner or not. Running an Indonesian company requires a lot of knowledge about the regulations, the ability to communicate in the local language with the local government and so on.
As a foreigner, you can bring a lot to your local team regarding the international standards, customer and international team experience. However, it requires you to go deeper to understand the local process. You also have to be passionate because it is not only government regulation that is new to you but also the local culture and work habits of your employees.
There are 150 specialists with diverse cultural backgrounds involved behind the scenes at the moment. As the person who builds a shared vision of the company, how do you manage differences to bring high performance?
Within ten years, Cekindo has grown to over 150 specialists comprising several nationalities in Indonesia and Vietnam with offices in Jakarta, Bali, Semarang and Ho Chi Minh City. It provides us with diversity and also challenges us to get everyone on the same page. I have the advantage of starting the company from the beginning and have been actively involved in practically every process of the management, including interviews for most of our current employees. I have always held the opinion that I should try my best possible to be a role model for my team, and be tolerant and have an open mind to learn from others. I always try to emphasise the fact that everyone in our company should understand the importance of their roles, and the need to always work together as a team to achieve greater results.
In December 2018, Cekindo was acquired by InCorp Group. How did you get the company to grow into its successful acquisition?
As a leader, I always guide my team towards our vision “to be a leading consulting firm of business services for clients expanding to and operating in Indonesia”. This helps to ensure that all of us understand where we are headed and are all on the same page.
Our journey from a startup company to being acquired has been full of many milestones, from first hiring and first big clients to opening two more operation offices in Bali and Semarang and one in Vietnam. During the years, Cekindo has been recognised as one of the leading players in our sector with a track record of helping companies in their Indonesian expansion. We have also achieved several local and international awards.
The overall Cekindo journey until the acquisition was a very natural process and the acquisition came as another team milestone in our mission “to provide a full range of market-entry and corporate services to enable our clients to focus on their core business and activities in Indonesia and beyond.”
Would you say Cekindo has reached its goal? What’s next?
Cekindo’s ultimate goal is to provide a full range of market-entry and corporate services across Asia to make our clients’ business life easier and to help them focus on their own core business functions. Therefore, the acquisition by InCorp was just another milestone to achieve this big goal. Due to this acquisition, Cekindo operates via Incorp Group in Indonesia, Vietnam, Malaysia, Philippines, India, China and Hong Kong with more than 10,000 corporate clients and a total of over 450 employees today. We have achieved this for Indonesia and are now working together with InCorp to reach another big milestone in Asia.
What are the main factors you’ve noticed that have attracted many foreigners building and running their businesses in Indonesia?
Over the past ten years, Indonesia has made remarkable progress in many areas, despite the challenging and difficult regulations involved in starting a business. The number of companies and individuals expanding/investing in Indonesia grows each year. The profiles of these foreigners and the reasons can probably be divided into several different groups:
- One of the main groups is the international and start-up companies motivated by the obvious Indonesian demography. Indonesia has the 4th largest population in the world and grows by almost three million people annually with the estimation to reach 272 million people by 2020 and a rapidly growing middle class with a high propensity to consume. These companies usually have already fortified their products and services very well in the Southeast Asia region, and Indonesia is just another promising market where they want to succeed.
- International Investors: Across Indonesia, there are many attractive investment opportunities promising an interesting evaluation compared to other more rigid markets.
- Government development plan: The Indonesian government focuses on investments to boost the local economy, specifically to improve the national infrastructure, energy, medical or manufacturing industry. Most of these projects are happening with private sector participation and bringing an opportunity for many foreign companies.
- Reallocation: Many people fall in love with Indonesia, especially with islands such as Bali and Lombok, and decide to relocate to Indonesia to explore some of the boutique businesses in gastronomy or other areas.
Several countries are experiencing economic recessions due to the global pandemic. Indonesia’s economic state is seen trembling and experts are claiming Indonesia might be next in line. What advice can you give to foreign-based newly formed and existing companies before an economic recession hits Indonesia?
Globally throughout the period of the last 11 years, profits of companies increased by more than 500 percent, especially for companies that produce cyclical goods. Now due to the COVID-19 crisis, the profits of companies around the world has fallen sharply.
Firstly, I would advise not to panic. You don’t need to shut down your company or lay off your employees. It is always good to be ready for any situation at all times as a recession can happen anytime. There’s been a significant decline in economic activity for some time. As we know, the main source of this hypothetical recession is COVID-19 and once there is vaccination on the market, all negative symptoms associated with this pandemic should be resolved.
However, we have to look into our own business activity and sector to understand exactly what is going on. Since this pandemic, some sectors have been badly hit. But on the other side, there are many industries such as technology (online retails with the largest increase in profits by 2,000 percent in the last 11 years), semiconductor manufacturers (e.g. Intel, Nvidia, AMD), or healthcare and others who benefit from the current situation, since they are now in the right industry or have implemented some strategies that have positioned them better for success.
So, how do you prepare for a possible recession?
Be aware of all new government regulation changes, make sure your local team is on the same page with you, refine and diversify your skills, bring new innovations, get ahead of any debt, build up some emergency fund, and check your spending.
Speaking of the global pandemic, what is the business trend you’ve noticed lately?
Most processes are now digitised. Actually, it is nothing new but the digitisation of business processes speeds up and during this global pandemic has helped immensely across the private and government sectors.
Which industries in Indonesia do you expect to show tremendous growth over the next few years and why?
E-commerce, IT/Tech, Healthcare and Sports and Outdoor because these industries still have huge untapped potentials regardless of the global pandemic.
Cekindo also has an international presence in Vietnam. Can you tell us the reasons for choosing Vietnam?
In 2018, Vietnam’s GDP growth hit a ten-year record by 7.08 percent, making Vietnam one of the top growth performers in the region and the world. The purchasing power of the 95 million population made Vietnam a very attractive market for foreign investors with more than 26,000 FDI projects in 2018. Therefore, it was also a very potential market for Cekindo.
If you can give one tip as a foreigner to fellow foreigners wishing to build and run a business in Indonesia, what will it be?
Do not take the large Indonesian market for granted. The market is quite large but at the same time fragmented from many perspectives. As such, it requires you to have a good business partner who can help you navigate your business through all challenges. It is an exciting market that demands time, effort, and patience.
Michal, can you briefly tell us about yourself?
Prior to Cekindo, I established Czech.Ina Group Ltd, a business bridge for European companies expanding their business to Southeast Asia. Currently, I am also involved in several other projects from various industries and a non-profit association called Yayasan Bohemia Indonesia with the main objective of promoting business and community links between the Czech Republic and Indonesia.
Now in Indonesia, I’m living my vision of independent life as a serial entrepreneur and an early-stage investor who loves mountain hiking and travelling. In my spare time, I enjoy reading a book or practising aikido. I also love to call myself a student of life who keeps on learning every day.
How were your interests in business development, consultancy and finance sparked?
I have an MSc in finance and accounting as well as a PhD in Marketing earned at Czech University of Life Sciences. For most of my career, I have been profiling myself in the finance sector, accounting and consulting industry. However, I consider myself a never-ending student of life where I am always learning by doing something new every day.
Mention three words that best describe you.
Determined, result-oriented, and analytical.