As the latest step taken by a government looking to address slowing growth in Southeast Asia’s largest economy, Indonesia in July 2015 moved forward with plans to raise import tariffs on a broad array of consumer goods including coffee, tea, meat, cars and clothing.
Indonesia's rich cultural heritage reflects in its long history of crafts, arts and entertainment and provides a valuable foundation for the creative industries. To fully realize their export potential, however, producers need to sustain sufficient quantities of consistent quality.
Indonesian consumers keenly spend their rising personal earnings on electronics and home appliances. Setting up shop in Southeast Asia's largest economy offers global manufacturers of consumer electronics the chance to tap rising demand in Indonesia and the wider region.
Indonesia’s domestic market for electronics has been showing a broad upward trend for the past decade in line with improved per capita purchasing power and greater consumer sophistication. This section looks at the changes in consumer habits and the main players in the industry.
Indonesia in early 2015 issued a draft regulation mandating the use of at least 40% local content in the manufacture of 4G smartphones sold within the country. Scheduled for implementation on 1st January 2017, this law brings about new opportunities to cooperate with local OEMs.
Buoyed by the success of the country’s existing FTZs, the Indonesian government in early 2014 announced its plans to develop three areas into new special economic zones. The introduction of these zones comes at a key time as neighbouring countries also begin gearing up to attract investment in the lead up to the ASEAN One Market in 2015.
Local furniture manufacturers have flourished over the past decade and are on course to further reap the benefits of Indonesia’s growing prominence as a furniture producer following the implementation of a legal verification system for timber sourcing.
Indonesia has an established reputation within the furniture and handicrafts sector within the regional and global market due to the country’s strong historical traditions in woodwork and artistic crafts such as batik. This article looks at some of the key trends and business opportunities in the sector.
On the 30th of September 2013, Indonesia and the European Union signed a landmark Voluntary Partnership Agreement (VPA) a move that is expected to boost the country’s already burgeoning timber industry and open up opportunities in related sectors.
The cosmetic industry is one of the fastest growing sectors in Indonesia and has consistently recorded double-digit growth in recent years. The industry has also been named as a priority and strategic industry by the government.
A weakening currency and high inflation has recently led to a period of tight monetary policy putting pressure on Indonesia’s private consumption. However judging from the performance of Indonesia’s capital market, the consumer sector is also still considered attractive by investors.
Few industries in Indonesia have benefitted from rising purchasing power as much as the fast moving consumer goods (FMCG) sector. This article looks at some of the key sectors driving Indonesia’s booming FMCG sector.
Indonesia in April 2014 posted its largest trade deficit in nine months, placing additional pressure on a government already moving towards protectionist policies on a handful of key commodities. This development brings back into the spotlight the country’s existing measure to limit imports via a complex and often restrictive licencing process.
The country’s middle-class population and their preference for practical and instant food has helped boost the growth of the spice, seasoning, and condiment sectors. Investment and exports are equally rising as further multinational companies make the spice islands their production base.
Indonesia's economy is largely driven by rising household consumption, and one industry that thrives on this is food and beverages. The internationalisation of local cuisine represents a prime opportunity for foreign companies to sell to Indonesian consumers, who are increasingly open to new foods and flavours.
Historically, Indonesia’s pharmaceutical drug utilisation has been the lowest in the region compared to neighbouring markets; however, with its trend of significant and sustained population growth, the country is seeing increasing demand for access to safe, effective medications and healthcare services.
Consumers increasingly prefer natural substances over synthetic ones in functional foods, nutritional beverages, cosmetics and medicine. This creates a growing export market for botanical extracts from Indonesia.
Much has been made of Indonesia’s automotive market as the biggest in the ASEAN, driven by a much-heralded emergent middle class. While optimism still reigns supreme with respect to the likelihood of this vision panning out, a few recent scuffs have taken some of the sheen off the market’s glossy outlook.
Indonesia’s plastic and packaging sector has shown strong growth of the back of the country’s intensified consumption habits. However, the potential of Indonesia’s plastics sector remains unfulfilled due to an over-reliance on imported raw materials.
Indonesia's upstream textile industry needs to be strengthened with capital, technology and know-how, so that it can continue to provide goods of sufficient quality and quantity to the growing apparel industry. Achieving this poses a challenge for the country and an opportunity for investors.
Indonesia’s footwear industry remains a major contributor to the country’s economy thanks to its positive growth in the last five years. Despite many obstacles, ranging from labour costs and raw material availability to energy prices; the sector is still considered attractive by both foreign and domestic investors.
The footwear industry plays an increasingly important role in Indonesia's manufacturing sector. Producing shoes for many global brands, footwear manufacturers are a vital job creator and an important foreign exchange earner for the country.
The increased demand for Islamic clothing has encouraged the growth of the domestic Muslim fashion industry. In a relatively short time, muslimwear has become an important segment of Indonesia's textile industry.
The economic slowdown in 2015 in Indonesia is still having a painful impact on several industries. One of these is the textile and textile products sector. The performance of this industry is expected to remain sluggish throughout 2016 due to a lack of positive sentiment that might lift it out of its mire.
The sportswear industry in Indonesia has seen an increase in export sales and foreign investment in recent years. The relatively stable global demand, especially in developed countries, has helped fuel the growth of the industry.
Contribution to GDP: 20.41% (Q3 2015)
Sector Growth: 4.33% (yoy, Q3 2015)
Number Employed in the Sector: 16.38 million (February 2015)
Highest Minimum Wage by Province: 3,100,000 IDR/month (DKI Jakarta)
Lowest Minimum Wage by Province: 1,482,950 IDR/month (West Nusa Tenggara)
Main Areas: Automotive, Electronics, Textile & Garment, Footwear, Food & Beverages, Metal Products, Chemicals.
Main Export Markets: USA, Japan, China, Turkey, South Korea, Germany, Singapore, Thailand, Philippines, Saudi Arabia, Malaysia.
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