Paris-born Guillaume de Gantes began its journey with McKinsey & Company 15 years ago in Paris. He worked mainly in New York, where he was elected as a corporate partner. This alumnus of Harvard Business School moved to McKinsey office in Indonesia two years ago and he talks about the opportunities and challenges in the largest economy in ASEAN.
Guillaume, tell us how you found working in the region so far.
I love South Asia as a region because there is so much going on here. For me, the professional aspect to come to Indonesia was really at the heart of what is happening in ASEAN. I am very eager to be in such an exciting country.
Can you give us some basic information about McKinsey's growth in Indonesia and Southeast Asia?
We are present in most countries of Southeast Asia: Indonesia, Thailand, Malaysia, Singapore, the Philippines, and more recently, Vietnam. We work with institutions and public enterprises in all major sectors to translate the rich possibilities of the region in economic and social impact of transformation. We also help large multinationals build and develop successful companies in Southeast Asia.
We have been present in Indonesia since 1988, and the office was McKinsey first in Southeast Asia. We help many big companies in Indonesia stimulate growth, transforming the operational and organizational performance, through new business models, build leadership capabilities, and accelerate economic development.
McKinsey is known as the first consulting firm overall management of the world. Which industries do you visit and in what capacity?
Our mission has always been to help clients make distinctive, lasting, and substantial improvements in their performance. Overall, we serve clients in all industries and sectors with the capacity to support the implementation and change things.
In Southeast Asia in particular, we serve clients in all major industries, including oil and gas, mining, financial services, telecommunications and media, consumer industries , travel and logistics and the public sector. I personally serve our customers in the financial services, telecommunications and health.
Your recent work in Indonesia has included the construction of a major bank here. How have you been involved in the redesign of the distribution process of this bank?
Given my experience, I am personally passionate about working with the financial services industry, which is highly affected by the digitization of banks. We did a lot of work in the digital - digital bank building and digitization of existing processes. There is a growing recognition that banks will have to change the way they work dramatically or entire enterprises will be supported by "Fintech" agile financial technology companies. You see this in the US; you have small businesses that have been taken over parts of the chain of bank value. Each part of a bank in the United States is "attacked" by small businesses. So there is a scenario in which banks could disappear. As Bill Gates said, the banking sector is needed, but banks are not. Banks will change or lose a lot of what they do today.
There are 118 commercial banks in Indonesia and the interesting question is: out of these banks, how many are ready to compete in the digital age
Your last report Win in the consumer market Indonesia Good , found that 7 of the 16 companies surveyed were you winners in at least one of the performance areas. One company won in each of them - what traits should a consumer goods company possess to be successful in Indonesia
We have researched the wide customer base in a number of categories and one of the things we looked at is how consumers make decisions. Indonesian consumers tend to be family and regarding decision making, as opposed to Chinese consumers, which are quite very group oriented individual. Indonesians like to ask family and friends if they have tried the product, putting a lot of value in their opinion. They also like the products that can be shared.
Here, people rely on their social network a bit, especially through social media, much more than other countries we examined. There is also a very loyal brand cultivation here and buyers take fewer risks - people usually know what they will buy in advance. Based on our study, these two things do not change with the level of wealth.
Indonesians also really value local brands. In our survey, we found that many Indonesian people think KitKat is a local brand, when it is not. Brands that can include all the above and to market themselves at the local level, as well as integration into social media will be able to do well here.
Can you please demystify some of the recent common myths of Indonesia's economy?
The first myth is that the growth of Indonesia Jakarta-led. If we look back a few years, the economy was already driven outside Jakarta, and even outside of Java, Sumatra, Sulawesi, Kalimantan. In fact, 90 percent of the fastest growing cities outside Java.
Another myth is that Indonesia is an export driven growth or Premières materials, when more and more, there is a growing consumer driven. The population of the urban consumer class in Indonesia is growing by the equivalent of a Singapore every year and will grow to 86 million by 2020.
The most interesting myth however, is that Indonesia is an unstable economy. We found that among OECD and BRIC, the standard deviation of growth in Indonesia during the first 10 years of the century really made Indonesia the most stable economy.
We will discuss growth. You believe in 2030, Indonesia could be a top 10 global economy, surpassing the United Kingdom, France and possibly Germany. How could this be achieved and what obstacles we face?
Yes, it could be. Indonesia has strong intrinsics -. The consumer market growing, becoming an international hub for food, and being a lean and user resource provider
However, it is also relevant challenges. Our research shows that Indonesia needs to increase productivity by 25 percent to maintain historical growth rates. One important sector that will benefit from this agriculture, farming and fishing. A simple example - in Japan, people freeze fish, so if fish prices dampens they should not sell their fish immediately. Here the infrastructure to freeze the fish are not in place.
There is a great need to improve infrastructure. To grow, the country will need to spend about US $ 2.7 trillion of infrastructure in the next 15 years or.
Indonesia should also have greater financial inclusion - getting people to be able to save. We have 250 million people in the country, but only 70 million bank accounts. Get more people to save, access credit and use of banking systems will be important in achieving this growth and realize its potential.
Do you think the world's eyes are on this area at this time?
Yes, absolutely. South Asia is one of the most dynamic markets in the world. If it were a country, it would be the seventh largest in the world, with a combined GDP of US $ 2.4 trillion. It should rank fourth in 2050. I remember the possibilities of these savings by the number of companies that have reached us to help release the potential - it is amazing. For many companies, they see Indonesia as the next great frontier.
When these companies reach to you for investment opportunities, which sectors offer you invest in?
It is very difficult to name an area in Indonesia that does not offer investment opportunities. We found that there is US $ 1.8 trillion in opportunities for companies that invest in the four priority areas of Indonesia: consumers, agriculture, resources and talent. We believe this potential will still be triggered and accelerated by the power of digital, whether through mobile banking and internet, e-commerce, education, manufacturing, delivery of government services and more.
Thank you, William.