Core conclusions:A water pump manufacturing company in Wenling, Zhejiang, has entered the markets of Philippines and Indonesia over the past 15 months, adopting a strategy of “certification prior to entry + dual-country distribution”. As a result, their exports reached 3.8 million yuan. They have signed contracts with 5 distributors. Among these distributors, those from Indonesia contributed 1.9 million yuan to their total sales, and they have secured the support of 3 repeat customers.
1. Customer background
This factory is located in Wenling, Zhejiang. It mainly produces small-scale water pumps for household and agricultural use, including self-priming pumps, submersible pumps, and booster pumps. The annual production capacity is 400,000 units. Previously, the factory’s exports were mainly to the Middle East and Africa. Customers were primarily represented by three or four traders. The gross profit margin of individual products was less than 12 percent. In 2025, with the increasing demand for construction materials and agricultural irrigation in Southeast Asia, the factory has decided to target the Philippines and Indonesia as new markets. The goal is to reduce its dependence on a single trader.
The factory’s export team consists of four people, none of whom have experience in the Southeast Asian market. They only have a handful of business cards received from Canton Fair. There were two concerns during the launch process: first, the markets in island countries are scattered across different regions, making it difficult to determine which channels to target first. Second, Indonesia has strict regulations regarding the import of mechanical and electrical products, and there was a risk that the goods might not be able to pass customs upon arrival.
II. Problem Analysis: Three critical points and one misunderstanding
- Channels are not hierarchical:Considering Southeast Asia as a market for development efforts, the channel structure in the Philippines and Indonesia is completely different. In the Philippines, distributors mainly operate in Manila and its surrounding areas, dealing with materials and hardware. In Indonesia, distributors are spread out across Jakarta and Surabaya, specializing in agricultural machinery and pumps. The rate of openings for these indiscriminate email campaigns is less than 3%, and there was no effective response after two months.
- Certification gap:Previously, the factory only handled certifications related to CE and SASO in the Middle East. We had no knowledge regarding the mandatory lists applicable in Indonesia and the Philippines. It is necessary to check each individual product to determine whether it falls under any of these mandatory categories. If we wait for the buyers to request such information before taking action, the certification process will be prolonged significantly, which could delay the shipment of orders.
- Textual translation:The English documentation only includes a list of parameters, without any images of installation scenarios or data on failure rates. What Southeast Asian distributors care most about are questions like “what should be done if something breaks” and “how long does it take for replacement parts to arrive”. The absence of this information prevents any real comparison between different pricing options.
- Payment terms are reversed:Previously, African traders were accustomed to making high upfront payments. When faced with the conventional terms of 30% upfront payment and the remaining amount to be paid upon delivery, the factory was unable to make a decision at that time.
Diagnostic conclusion: There is no shortage of demand in the market. What is lacking are detailed channel maps organized by country, certification lists that are reviewed case by case, and documents that allow dealers to accurately calculate after-sales costs.
3. What have we done?
- By analyzing customs data, we identified the import records of pump-related products from the Philippines and Indonesia over the past 12 months. We identified 47 legitimate suppliers, which can be categorized into three groups based on their business channels: building materials and hardware, agricultural machinery and irrigation equipment, as well as wholesale electrical and mechanical products.
- Each model has been carefully checked against the Indonesian SNI catalog and the Philippine BPS mandatory list. The three main models listed in the catalog have already started the certification process four months in advance. Those not listed in the catalog are provided with a statement of compliance as a backup.
- Repetitive bilingual documentation: English + Filipino/Ibanian installation videos with subtitles. Additionally, there are 6 installation scenario images, a list of necessary components, and a promise of 48-hour delivery time for spare parts. All this is included in the documentation page.
- Design a dual-payment scheme: The new distributor should receive a 30% advance payment, with the remaining amount to be paid before delivery. For those distributors who demonstrate good performance in fulfilling their obligations for three consecutive orders, a 30-day credit period will be granted, along with coverage under export credit insurance.
- We have divided the 47 distributors into three levels for targeted communication: we send customized messages to authorized channels (along with case studies from other channels); we use WhatsApp for reaching wholesalers, with the goal of achieving full coverage within two weeks.
4. Execution rhythm
First month: Authentication initialization and channel mapping
After completing the mandatory catalog verification between the two countries, three models have been sent for testing to initiate the SNI process. Forty-seven dealers have completed the initial contact stage; nine dealers have provided responses, while four have requested sample collection. Additionally, English-language documentation needs to be recreated.
Months 2 to 4: Sample verification and first order placement
Six companies were selected for testing. Among them, a distributor of building materials and hardware in Manila signed a annual contract worth 860,000 yuan after three months of testing. The first batch consisted of two cabinets. The SNI certification was obtained in the fourth month, and a distributor of agricultural machinery and equipment in Surabaya immediately signed a contract for one cabinet as part of the first order. Both contracts were finalized with a 30% advance payment, with the remaining amount to be paid before delivery.
Months 5 to 9: Downward distribution and repeat purchases
By leveraging the distribution networks of two first-tier distributors, we have been able to expand our reach with three secondary distributors. Considering the high incidence of pump failures during the rainy season in the Philippines, we have introduced a pre-installed spare parts package. Distributors can purchase this package along with the entire machine, resulting in spare parts revenue accounting for 7% of the total sales value. In Indonesia, one of the distributors made a repeat purchase after nine months from the initial order, with the amount being 1.8 times greater than the initial order.
Months 10 to 15: Hierarchical accounting periods and balance between volume and profit targets
Three dealers who have fulfilled their obligations for three orders each will be granted a 30-day credit period, along with insurance coverage. The insurance rate will be determined based on the buyer’s rating. During this period, products with low gross profit margins will be removed from the lineup, while three models with complete certifications and moderate gross profit margins will be promoted. By the end of the 15th month, the total export value in these two countries reached 3.8 million yuan (1.9 million yuan each for Indonesia and the Philippines). Three out of the five dealers decided to make repeat purchases.
V. Outcome data
The comparison of key metrics before and after the launch is as follows:
- Export volume in the Southeast Asian market:From 0 yuan to 3.8 million yuan in 15 months
- Signed dealer:5 companies (2 from the Philippines, 3 from Indonesia)
- Certified Model:Three main models have passed the SNI certification in Indonesia; the remaining models have issued compliance statements.
- Proportion of accessories revenue:Increased from 0 to 7% of the total value
- Repeat-ordering dealers:3 companies, with Indonesia having the highest rate of repeat purchases, reaching 1.8 times the number of purchases in the first batch.
- Payment terms:For new customers, a 30% prepayment is required, with the remaining amount paid before delivery. For high-quality customers, a 30-day credit period is offered, along with credit insurance coverage.
| indicators | before starting | 15 months later |
|---|---|---|
| Southeast Asian exports | 0 | 3.8 million yuan |
| regional distributors | 0 companies | 5 companies (3 of which have made repeat purchases) |
| compulsory certification | No Southeast Asian certification available | 3 models: SNI + compliance statement |
| Accounts receivable structure | A single, high upfront payment | Dual-track system + credit insurance coverage |
6. Which factories can this method be replicated to?
This approach of “pre-certification + dual-country distribution” is suitable for foreign trade teams consisting of 2 to 4 people, with an annual production capacity of over 200,000 units per product. It’s also ideal for mechanical and electrical manufacturing plants that rely entirely on a single trading partner for exports. When implementing this strategy, two things need to be done first: first, use customs data to break down the target country into different channels; then, carefully check the list of mandatory certifications required in each country. The certification process should be incorporated into the development plan, rather than being delayed until after orders are received.
It should be noted that in Southeast Asia, the amount of individual orders is not very large. The total revenue comes from the number of dealers and the sales of accessories. Therefore, it makes sense to offer “after-sales materials + accessory packages” as standard offerings. When setting payment terms, it’s better to be conservative at first, and gradually increase the payment terms based on past performance. This approach is more stable than immediately opening up payment terms only to then re-tighten them later on.
7. Common questions
Q: How long is the certification process for SNI in Indonesia, and what are the approximate costs?
A: The duration of SNI services depends on the product category and the quality system of the manufacturer. Generally, the cycle ranges from 3 to 6 months. The costs include testing, factory inspection, and agency services. The cost for a single model is usually in the tens of thousands of yuan. If multiple models use the same application process, the cost can be reduced accordingly. It is recommended to first check the list to determine whether the product requires SNI services, and then decide the order of submission for testing.
Q: The Filipino customers are small in scale, and their demand is quite low. Is it worth doing this business with them?
A: The individual orders from Filipino distributors are generally not very large in size. However, distributors have a high frequency of purchases, and their demand for accessories remains stable. This makes it suitable to offer products in the form of “complete machines plus accessory packages,” thereby increasing the value per customer. In this case, the order worth 1.9 million Philippine pesos was supplied by two distributors. Accessories accounted for 7% of the total sales value. Once the distribution channel becomes stable, the annual contribution per customer can be anticipated.
Q: Since there are no employees who speak Southeast Asian languages, how can we resolve communication issues?
A: The English version can cover communication with B2B clients in both countries. The focus is on localizing the materials, rather than requiring sales staff to speak multiple languages. Videos should be subtitled in Garifuna and Indonesian. Parameter sheets and warranty terms should be provided in both languages. After-sales commitments should be included in the material pages. In one case, a team of four people from a factory had no staff who spoke any minority languages. They managed to complete all contract signing processes using bilingual material packages.
For factories that produce water pumps, motors, and other electrical components, the key to success in Southeast Asia is to ensure that certifications and relevant documents are finalized before placing orders. This way, dealers’ concerns regarding after-sales service can be addressed during the quotation process. In other words, sales volume depends on the level of trust established between suppliers and dealers.
Qihang Zhilian Foreign Trade Research Institute·Let China's intelligent manufacturing industry set sail to sea·Tel: 180-0327-6609
