In today's competitive global economy, customer demands are driving volume buyers to source more new products faster and at lower cost. To achieve this volume buyers need to find new supply markets and streamline their purchasing process. Meanwhile technological advancement in computer and telecommunication fields is pushing global business to adopt the Internet as their tool to interact between buyers and suppliers. It made countries like Indonesia to have no choice other than to also actively participate in the emerging Electronic Commerce (E-Commerce) or otherwise be left behind.

The above global phenomena and the economic crisis that hit Indonesia since 1997 are pushing the country to be more focus in boosting export of its local products. The new Indonesian government is trying hard to find better ways of reaching and penetrating established buyers in the United States, Europe, Japan, and other Asian countries. This country condition attracted Global Sources to set-up a joint venture company for providing Indonesia Sources Online service. Indonesia Sources provides trading partners allover the world an inexpensive, open, direct channel, and an Internet-based Business to Business (B2B) facility to find new supply markets and do purchasing transaction in more efficient and effective way. Under the joint venture arrangement, it invited PT. Global Jaringan Nusantara (Global Nusantara) to share stock ownership in a co-operation agreement with Indonesia GPEI (Gabungan Perusahaan Exportir Indonesia -Indonesia Exporters Association).

Global Nusantara divided its market of Indonesia Sources into two: the export and domestic market. In building its foothold in Indonesia it would first focus in the export market. Then given the high business volume and value within supply chain of domestic market, Indonesia Sources is speeding up the process of studying, measuring, and selecting industry sectors that were strategic to support its business expansion in Indonesia.

In alignment with Global Sources industry focus and considering the situation of Indonesia domestic market, Global Nusantara is very interested to study the potential of setting up a business to business pharmaceutical vertical hub in the country. Based on Department of Health survey, per-capita consumption of pharmaceutical product in Indonesia in 2000 is still low only US$4/year. Predicting that Indonesia's economy will recover to pre-crisis condition and improvement in consumers' buying power, then it is highly expected that pharmaceutical consumption per-capita will return to its level before crisis US$9.7 in 1997. This in turn is going to stimulate higher transactions between entities in the pharmaceutical supply chain: manufacturers, distributors, hospitals, pharmacies, and drugstores. And that provides opportunity for Indonesia Sources to provide its service in pharmaceutical market segment.



Research Location: PT Global Jaringan Nusantara

Supervisor: Firdaus Alamsjah, PhD. and Kirk D. Evans

Accepted : 24 January 2001





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