For more than two decades, China has been the center of global manufacturing and supply chain operations.
From electronics and automotive components to consumer goods and industrial equipment, countless multinational companies built their production networks around China’s manufacturing ecosystem.
However, the global business landscape is changing.
Today, more companies are actively exploring alternatives as supply chain risks, geopolitical tensions, rising labor costs, and trade uncertainties reshape global investment strategies.
One trend has become increasingly clear:
Companies are not necessarily leaving China entirely—but many are adopting a “China Plus One” strategy.
And Indonesia is becoming one of the biggest beneficiaries.
For global businesses evaluating new opportunities in Asia, understanding Indonesia’s growing role in global supply chains may reveal opportunities that did not exist a decade ago.
The Global Shift Away From Single-Country Supply Chains
The COVID-19 pandemic exposed vulnerabilities in global supply chains.
Companies that depended heavily on a single manufacturing location experienced disruptions ranging from factory shutdowns to shipping delays and inventory shortages.
At the same time, geopolitical developments have increased uncertainty for international businesses.
According to reporting from Reuters, Bloomberg, and Financial Times, multinational companies are increasingly pursuing supply chain diversification to reduce concentration risk and improve resilience.
Rather than relying exclusively on one country, businesses are building operations across multiple markets.
This approach has become widely known as the China Plus One strategy.
What Is China Plus One?
China Plus One does not mean abandoning China.
Instead, it means maintaining operations in China while expanding into additional countries to reduce dependency.
The strategy helps companies:
- Improve supply chain resilience
- Reduce geopolitical exposure
- Diversify manufacturing locations
- Access new labor markets
- Create greater operational flexibility
Countries frequently discussed as China Plus One destinations include:
- Indonesia
- Vietnam
- India
- Thailand
- Malaysia
Among these markets, Indonesia has attracted growing attention from investors.
Why Indonesia Is Gaining Attention
Several factors make Indonesia increasingly attractive to multinational companies.
Large Domestic Market
Indonesia has a population of more than 280 million people.
Unlike some manufacturing destinations that primarily serve export markets, Indonesia offers both production capabilities and substantial domestic demand.
Companies can often manufacture products while simultaneously developing local customer bases.
Strategic Geographic Location
Indonesia sits along critical international shipping routes connecting Asia-Pacific markets.
Its location provides access to:
- Southeast Asia
- Australia
- China
- India
- Middle East markets
This positioning supports regional distribution and logistics operations.
Growing Manufacturing Sector
Indonesia continues investing heavily in:
- Industrial parks
- Logistics infrastructure
- Ports
- Transportation networks
- Energy development
These investments support long-term industrial growth.
Expanding Talent Pool
Indonesia’s workforce continues to grow, creating opportunities for companies seeking both operational and commercial talent.
Many multinational organizations now view Indonesia not only as a manufacturing destination but also as a source of skilled professionals.
This has contributed to growing demand for companies looking to hire employees Indonesia before making major investments.
Rising Costs Are Changing Business Decisions
One factor frequently cited by global businesses is cost competitiveness.
Over the years, manufacturing and operational costs have increased in several established markets across Asia.
As companies evaluate long-term expansion plans, many are comparing:
- Labor costs
- Operational expenses
- Talent availability
- Infrastructure readiness
While cost should never be the only consideration, it remains an important factor in global investment decisions.
For some organizations, Indonesia presents an attractive balance between growth potential and operating costs.
Why Many Companies Hire Before They Invest
One of the most interesting developments in global expansion strategy is the shift toward workforce-first market entry.
In the past, companies often followed a traditional model:
- Establish a local entity
- Open an office
- Build a team
- Enter the market
Today, many companies reverse the process.
They first:
- Hire local professionals
- Build relationships
- Test customer demand
- Evaluate market conditions
Only after validation do they make larger investments.
This approach allows organizations to gather valuable insights while maintaining flexibility.
Building Local Teams Before Building Facilities
Before investing millions into factories, warehouses, or offices, companies increasingly want answers to critical questions:
- Is customer demand strong enough?
- How competitive is the market?
- What are local buying behaviors?
- How effective is the distribution network?
- What talent is available?
Local employees often provide insights that market reports cannot.
By hiring professionals on the ground, companies gain a clearer understanding of the opportunities and challenges ahead.
This is one reason why employer of record indonesia solutions have become increasingly popular among foreign investors.
How EOR Supports Market Validation
Many organizations want to establish a local presence without immediately creating a legal entity.
Using an EOR indonesia solution allows companies to:
- Hire local employees legally
- Manage payroll compliantly
- Reduce administrative complexity
- Test the market efficiently
- Scale teams gradually
This flexibility is particularly valuable during early-stage market evaluation.
Rather than making large commitments upfront, companies can expand based on actual market performance.
Indonesia’s Growing Role in Regional Expansion
Many Asia-Pacific expansion strategies now include Indonesia as a priority market.
Companies are hiring:
- Business development managers
- Country representatives
- Sales professionals
- Market research teams
- Customer support personnel
before establishing permanent infrastructure.
This reflects a broader shift in how multinational companies approach international growth.
Speed, flexibility, and market validation are becoming increasingly important.
Why Supply Chain Diversification Is About More Than Manufacturing
While manufacturing often receives the most attention, supply chain diversification affects many other functions.
Companies also need:
- Local sales teams
- Procurement specialists
- Supply chain managers
- Operations personnel
- Customer success teams
As organizations expand into new markets, talent becomes just as important as facilities.
The ability to recruit and manage local employees effectively can influence the success of an expansion strategy.
The Companies Moving Early May Gain the Biggest Advantage
Historically, businesses that recognize structural shifts early often benefit the most.
Today, global supply chains are undergoing significant transformation.
Companies that begin evaluating Indonesia now may gain advantages in:
- Talent acquisition
- Market knowledge
- Customer relationships
- Operational readiness
Waiting until competitors are fully established may make expansion more difficult and more expensive.
How Big Fish Global Can Help
At Big Fish Global, we help international companies establish and grow their presence in Indonesia.
Our services include:
✔ Employer of Record Indonesia
✔ Recruitment and Talent Acquisition
✔ Payroll Outsourcing Indonesia
✔ Market Entry Advisory
✔ PT PMA Establishment
✔ Business Licensing Support
✔ Compliance and Regulatory Services
✔ Workforce Expansion Solutions
Our team helps companies evaluate opportunities, build local teams, and enter the Indonesian market with confidence.
Conclusion
Global supply chains are changing.
Rather than relying on a single country, multinational companies are increasingly diversifying operations and exploring new growth opportunities across Asia.
Indonesia has emerged as one of the most attractive destinations due to its large market, growing workforce, strategic location, and expanding industrial ecosystem.
As organizations adopt China Plus One strategies, many are discovering that successful expansion begins not with factories or offices—but with people.
Building a local team, understanding market dynamics, and validating opportunities can provide a stronger foundation for long-term growth.
For many global companies, Indonesia is no longer simply an alternative market.
It is becoming a strategic priority.
Need Help Expanding Into Indonesia?
Big Fish Global provides professional Employer of Record Indonesia, recruitment, compliance, and market entry services to help international companies build teams and grow successfully in Indonesia. Contact our team today to learn how we can support your expansion strategy.
