The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
JAKARTA, Indonesia — Her name is not embossed on any label but she is arguably one of the most important figures in Indonesia's booming fashion industry. Michelle Tjokrosaputro is the 37-year-old chief executive of Dan Liris, a well-respected textile and garment manufacturing giant that produces for global behemoths like Calvin Klein, Tommy Hilfiger and Marks and Spencer.
Last month, Tjokrosaputro was at the tenth anniversary edition of Jakarta Fashion Week, sharing her expertise with the next generation of designers showing on the catwalk. Under the supervision of fashion week organisers, she provides a portfolio of services such as auditing, subsidised courier services, sustainability management, quality control and specialised state-of-the-art machinery.
While the mentorship programme certainly does help local brands achieve a level of quality on par with international standards, it also highlights Indonesian manufacturers’ growing prowess on the international stage. Tjokrosaputro is just one of several industry leaders who is keen to help Indonesia’s apparel, footwear and textile manufacturing sector continue to prosper and move up the value chain. “We can then all feel proud to say ‘Made in Indonesia,’” she quips.
With a textile and apparel export volume of close to $12 billion and a workforce of almost two million people, Indonesia has secured a spot for itself among the world’s top ten textile and garment exporters. The Indonesian government has set the target to increase the nation’s value of exported textile and apparel to $75 billion by the year 2030, meaning that it would reach 5 percent share in the global market.
‘China Plus One’ strategy
Indonesia would need to overcome many big challenges to meet such a target but even with giants like China and India as its neighbours, this youthful, diverse and dynamic country of 260 million people cannot be ignored. In fact, according to professional services firm PwC, manufacturing is a key contributor to its prediction that Indonesia will become the fifth biggest economy in the world in just 12 years’ time, moving up from 16th place and surpassing the likes of Brazil, Russia and Germany.
“Indonesian apparel manufacturing will play huge role in the country’s future in the next 20 years. We’re [already] seeing the impact in this decade too,” says Anne Patricia Sutanto, chief executive of Pan Brother Tex, one of the largest Indonesian manufacturers producing for the likes of Uniqlo — there are three massive factories just for the Japanese brand — and ASICS shoes.
“There is no doubt that Indonesia with its large population will have a huge influence on both manufacturing and sourcing as well as consumers’ buying. This industry will have a multiplier effect and give a major boost to the economy provided the government is willing to see this labour-intensive industry as pillars of growth,” she adds.
The firm has big plans to expand production capacities to “clothe the world, both in Indonesia as well as other countries,” says Sutanto whose company manages brands like Express, Hollister and a home textiles line with Ikea, among others. Pan Brothers Tex also collaborates very actively with Indonesian brands like Salt n Pepper and Zoe Black, which are retail collections.
One of Pan Brother Tex's subsidiaries, Hollit International, is a Java-based firm where product development, material sourcing and production are combined under one roof. Hollit counts Prada, Ralph Lauren, Brooks Brothers, Guess, Lacoste and Next as clients. "Our pattern makers, supported by highly-skilled sewing operators, can produce real time ad-hoc sample products for visiting designers and product developers," says Sutanto, adding that "Design on the Spot" remains the firm's unflinching motto.
Bateeq Spring/Summer 2018 | Source: Courtesy
While China undoubtedly remains the biggest powerhouse in the region, Indonesia is now benefitting from China’s rising labour costs, prompting companies to diversify in the region by following what’s called a “China Plus One” strategy. Like China, Indonesia has the advantage of a domestic supply of raw materials, an expansive labour force and a big domestic economy that is transitioning steadily from low income to middle income economy. Unlike China, however, it is integrated into the Association of Southeast Asian Nations (ASEAN).
Besides, manufacturing companies in Indonesia are getting increasingly sophisticated with vertical operations of spinning, weaving, printing and garment plants — making them a one-stop destination for international clients. One such example is a gargantuan Java-based company called Sritex, that produced 8 million pieces of apparel a year and boasts of bigwigs like Uniqlo, Guess and H&M as long-time clients.
Other major players in the sector include Eratex Djaja, Evershine Tex, Kahatex, Argo Manuunggal Group, Pan Brothers, Busana Apparel and Binabusan.
Fast fashion, diffusion and sportswear
According to H&M's global head of production, Helena Helmersson, the Swedish firm is optimistic about expanding further in Indonesia and establishing a long-term presence there. "The advantage of manufacturing in Indonesia is the great mix of fashion, price and sustainability," she says.
Today the biggest international buyers in Indonesia are fast fashion giants or those operating diffusion labels of designer brands. It is high-volume sportswear production that allows major multinational sportswear brands — Adidas, Mizune, Asics, New Balance, Nike, Pentland and Puma — to not only keep up with global demand, but also expand into new countries.
Because of its investments in technology, innovation and training, Indonesia is being increasingly perceived not as the cut-and-sew factories of Vietnam and Bangladesh, but as a more advanced sourcing opportunity. And where it cannot compete on price, it can on scale.
Thanks to its expansive labour force as the fourth most populous country in the world, Indonesia has an advantage over its neighbours in Southeast Asia. There are over 3,000 garment manufacturers in Indonesia, mainly producing shirts, cotton t-shirts, corsets, underwear, coats, sports shirts and trousers.
“The government under President Joko Widodo has been pushing a lot of infrastructural projects and also bureaucratic slimdown in order to ease business,” says Tjokrosaputro of Dan Liris.
“We’re also anticipating zero tariff [access] to the Australian market will happen next year and hopefully zero tariff or a free trade agreement with EU will be signed by end of 2018. This will help Indonesian industries will grow further allowing us to compete with our neighbouring countries like Vietnam and Bangladesh.”
Indonesia already has free trade agreement with Japan, which has brought scores of Japanese brands to manufacture in the country.
An archipelago of specialists
Textile, apparel and footwear production is scattered across many of Indonesia’s 17,000 islands but the sector hubs are mostly based on the islands of Java — where the country’s commercial and fashion capital Jakarta is located — as well as Sumatra, Sulawesi and Bali.
A report published by Indonesia’s Directorate General of National Export Development, cites Sukabumi, a city in West Java, as the most attractive destination for garment manufacturing investors. But the city of Bandung is seen as the most developed for garment manufacturing, producing as much as 40 percent of the annual output value of garments in the country. Even Jakarta trails behind Bandung.
Norma Hauri Spring/Summer 2018 | Source: Courtesy
Since Indonesia has an abundant supply of raw materials and animal derivatives of cow, sheep, alligator, snakes and others, the footwear (sports and non-sports) industry is flourishing. The Ministry of Trade confirms that Indonesia was one of the world’s top ten footwear producers in the world.
Investor confidence is emboldened by the fact that global brands like Nike identify the country as one of their biggest production hubs. Adis Dimension Footwear, the local Indonesian unit of American multinational footwear and sportswear giant owns a factory in Tangerang, Java, with a production capacity of 20 million pairs per year. In 2015, it announced it was setting up a new $60 million factory in West Java with a production capacity of 10 million pairs of shoes per year. About half of raw materials are domestically-sourced — a big advantage in terms of both cost and operations.
In the non-sports shoes category, there is Rotelli, a formidable shoe manufacturing company that retails its own brand and, through its manufacturing arm Karyamitra Budisentosa, produces for the likes of Eram, Geox and Dan Marini Marco.
Other big players in the footwear sector include Global Sports, Panarub Industry, Nikomas Gemilang, Sepatu Mas Idaman, Mangul Jaya, Teguh Murni Perdana and Pelita Tomangmas. West Java, East Java and North Sumatra are the main hubs for production. Textiles and metal accessories for the footwear industry are located there and in Banten, while Jakarta, Bandung, Yogyakarta and Bali serve as the main design clusters.
Jewellery — especially gold jewellery — has traditionally been one of Indonesia's biggest export commodities with the top buyers coming from Switzerland, Japan, Singapore and Hong Kong. UBS, a colossal 36-year-old jewellery company (also the sponsor of Jakarta Fashion Week) trains thousands of jewellery makers in East Java. “Jewellery designs in Indonesia have evolved to lead in the world in terms of variety and creativity,” says Erwin Suganda, creative director of UBS Gold.
But with so much focus on industrial output, what happens to the handmade crafts that Indonesia is famous for?
"A huge variety of crafts and embroidery skills have been here for generations. We grew up with it. So, it's surprising when we are told, in Paris, our embroidery looks like Gucci's. We intend our designs to look cool and international, but marrying ancient handmade skills from my country is in the brand's DNA. It's not derived. We're following our artisanal culture," says Indonesian designer Toton Januar, last year's winner of the Woolmark Asia Prize.
“The soft power of my country’s made-by-hand [sector] is underestimated. For one, the Indonesian government fought for the heritage-craft batik, only when the Malaysian government stepped in to patent it.”
Monique Soeriaatmadja, one half of the designer duo behind Jakarta Fashion Week brand Soe Jakarta agrees. “There’s a grave concern about the growing disconnect between the fashion industry and the craft industry. However, our biggest challenge with using indigenous crafts is regeneration. Young people are getting less interested to sit around looms and vocational training in textile schools is focused on putting the people on factory floors not on the looms.”
Bali’s cosmopolitan creative community
Given such a backdrop, locals were impressed to see Jakarta Fashion Week step in to help with BINA, a craft collaboration between the event organisers and Mandiri Art foundation.
The national designer showcase, spearheaded by Svida Alisjahbana, CEO of the Femina Group publishing empire, is a buzzing event that is going from strength to strength, featuring brands as diverse as Dan Liris's inhouse brand Bateeq made of traditional textiles to modest-wear designer Norma Hauri who pairs androgynous pant suits with tight-fitting hijabs, and Peggy Hartando which is worn by global celebrities like Gigi Hadid.
Peggy Hartanto Spring/Summer 2018 | Source: Courtesy
It is perhaps the island of Bali that can serve as a shining example of mindful production and the seamless collaboration with the country’s artisans, whose skills range from textile-making, dyeing and sculpting to carving and jewelry-making. Take Threads of Life, based in Bali’s cultural capital of Ubud, which works directly with 1,000 women on 11 islands across Indonesia weaving the most exquisite textiles. This fair-trade business works with culture and conservation to alleviate poverty in rural Indonesia by commissioning heirloom-quality textiles made with local materials and natural dyes to a standard usually seen only in museums.
John Hardy jewellery, for instance, with its flagship in Ubud and stores in New York, Hong Kong and Houston, is a classic case of a handmade and made-in-Indonesia brand gaining a huge international footprint. The brand has a workshop of 750 Indonesian artisans, descendants of master carvers who carved giant stone temple walls and wooden statues. “Handmade jewellery takes time,” says Polly Purser, director of heritage, hospitality and public affairs based in Ubud. “The process, the cultural context influences the design. You cannot separate the people and the place from the product — that’s what makes the brand.”
US-born designer Evan Sugerman, founder of Parts of Four, sells his ungendered and non-seasonal jewellery and other objects across five continents with a standalone boutique in Paris. A resident of Bali for 16 years, he says he channels the magic and mysticism pervading the island to give a unique signature to his brand. "I guess the brand has become a sort of talisman production unit," says Sugerman who in the past collaborated regularly with Rick Owens.
Little Joe Woman is a rock-chic, luxe-resort fashion line that started in New York by Gail Elliott, a successful model in the 80s and 90s, who walked the runway alongside Cindy Crawford and Helena Christensen. “We used to produce in China but since moving to Bali three years ago, we’ve set up our own factory where we employ incredible local talent,” says Elliott.
Biasa, is a globally distributed Balinese brand founded in 1994 by the Italian-born and now Indonesian citizen Susanna Perini. “Every morning I wake up to the energies of this island. There is a profound spirituality that pervades this island and fuels creativity,” she says. Perini is part of the early generation of wanderlust-filled Westerners who embraced Bali as their home.
But perhaps no one has a better vantage point on Indonesia’s booming and increasingly cosmopolitan fashion industry than Svida Alisjahbana, CEO of Femina Group and chairman of Jakarta Fashion Week. To her, the country’s assets and advantages are crystal clear. “No other industry encapsulates the importance of having diverse influences [than] fashion. And not many countries are as diverse as ours.”
Bandana Tewari is editor-at large of Vogue India.
Disclosure: Bandana Tewari travelled to Jakarta as a guest of Jakarta Fashion Week.