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Market research is crucial for any business looking to expand into Indonesia, but it can be a challenging task for foreign investors. One of the main obstacles they face is conducting comprehensive market testing to assess the market’s compatibility with their company.
It’s possible for foreign investors to hire a market research firm in Indonesia for initial research, but the results may remain theoretical. On the other hand, hiring a local employee through an employer of record provides real-life feedback on the market. This also gives the opportunity to establish business connections and conduct market testing.
The article explores how hiring your first employee in Indonesia through an Employer of Record can help you test the market before expanding your business.
What is an Employer of Record?
An Employer of Record is a third-party contractor that assumes employment responsibilities for a business. It handles payroll, taxes, immigration, and employment under Indonesian labor laws.
An Employer of Record serves as a facilitator and does not participate in an employee’s day-to-day activities. It offers an excellent option for foreign businesses that lack a physical presence in the market.
Why hire a full-time employee for market research in Indonesia before expanding?
Hiring your first employee through an Employer of Record (EOR) is an easy way for you to test the market before committing to investing in the long term. The biggest upside of hiring employees through an EOR is that your company does not need to register itself in the country.
On the other hand, If your organization wants to conduct market research by setting up a company in Indonesia, it would be a costly and time-consuming process. A company set-up requires fulfilling regulatory and monetary requirements. These requirements are far more extensive than hiring an employee through EOR.
Here are some ways that having a full-time employee can help with your market research and testing.
Understanding consumer behavior through first-hand market research
Indonesia is a diverse country with a population of 275 million people who speak over 700 languages and dialects. Hiring full-time, local employees can help overcome these cultural and linguistic barriers.
Doing so also provides businesses with valuable insights into local consumer behavior. This helps businesses understand the local market and identify consumer preferences and trends.
For example, when PepsiCo was planning to launch its Tropicana juice brand in Indonesia, the company hired local employees to conduct market research. These employees conducted surveys and focus groups to better understand local consumers. Additionally, it also identified potential obstacles to the brand’s success. Based on their findings, PepsiCo was able to adjust its marketing strategy and packaging.
Building business relationships
Expanding into Indonesia requires more than just market knowledge; it’s equally important to establish strong relationships with local vendors and distributors. An Indonesian employee hired through an Employer of Record can help establish these relationships well before your company launches in the country.
Hiring a local employee provides valuable insights into the local business landscape, allowing you to build a network of contacts in the industry. This not only gives your company more confidence in its expansion plans but also allows you to hit the ground running once you officially launch in the market.
Testing the market for potential customers
Additionally, a full-time employee can communicate with potential clients and gather valuable insights into what customers actually think about your products or services, helping you design your services according to the local market. This, in turn, increases your chances of success once you launch in Indonesia.
Besides providing market research, having a full-time employee in Indonesia helps you establish your first customers. They can build relationships with potential clients, generating interest in your services or products before you even launch in the market. This leads to a stronger initial customer base, which is crucial for establishing a foothold in a new market.
Get more information about Emerhub’s Employer of Record services
Emerhub offers EOR services to help businesses hire workers from emerging markets. With these services, businesses can avoid administrative work related to hiring and employment. If you have any questions about which type of EOR service is best for your business, we are happy to provide you with more information.
- Our EOR services allow you to hire remote workers in a foreign country.
- We provide you with a clear breakdown of the costs associated with hiring an EOR, including typical fees and expenses.
- At Emerhub, we offer comprehensive EOR services to support businesses at all stages.
After onboarding businesses, a consultant provides expertise on host country employment regulations. This consultant works in collaboration with our target country experts and financial teams.
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