Opportunity Indonesia – A Growing Middle Class

Indonesia is the fourth largest country in the world in terms of population. Fast growing consumption, powered by growing affluence of the middle class, is the main driver of Indonesia’s economic growth

Favorable Demographic Profile

  • With a total population of 238 million, Indonesia is the fourth most populous country in the world after China, India, and the US
  • Indonesia has a favorable demographic profile with 60% of population aged below 40

Consumption Driven Economy

  • Private consumption is the biggest driver of Indonesia’s economic growth, representing 56% of total GDP output
  • Private consumption per capita is expected to double from its current level of US$1,500 to US$3,000 in 2015

Indonesia’s Growing Middle Class

50 million households in Indonesia have a disposable income of US$3,000 or more, and this number is expected to reach 150 million by 2015

  • 8 million scooters, a favored form of transportation among urban residents, were sold in 2010, compared to 1.7 million in Thailand

For MNCs, this could mean:

  • Consumer goods companies should look at Indonesia seriously as the consumer spending boom is just getting started
  • Despite various operating difficulties in doing business in Indonesia, MNCs should establish on-the-ground presence, either through wholly owned subsidiaries or partnerships, to catch this growth opportunity at its onset

 

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