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The consumer boom in Indonesia

in Market Research


Following in the recently trodden footsteps of the BRICs countries, Indonesia is emerging as a serious contender in the new world economic order. Its commodities-based economy has fuelled a consumer boom creating a 50m strong middle class from a total population of 238m. For a country whose middle class numbered only 1.6m in 2004, growth levels even compared to the likes of Brazil and China is startling. With continued progress, Indonesia could very well become a part of the informal BRIC group consisting of the fastest growing economies in the world. According to official forecasts, Indonesia’s middle class will reach an estimated 150m by 2014 creating a consumer market that cannot be ignored.

With the added disposable income in their pockets, Indonesia’s burgeoning middle class is on a spending spree. Just last year about 8m two-wheel scooters were sold in Indonesia. This has led to the entry of brands selling high-end products trying to cash in on the boom in the South-East Asian country. On the technology side, Indonesians are quickly adapting smartphones and use of social media through these devices is proving extremely popular. The country is home to the second largest number of Facebook users and the third largest number of Twitter users.

There is, however, still a number of challenges for companies looking to enter Indonesia.  Marred by poor infrastructure and corruption, Indonesia remains a hard country in which to do business. Then there is the language problem. The use of English has been curbed in the past and the majority of Indonesians do not speak English. Bahasa Indonesia is the national language of the country, and the Indonesian government prefers foreign companies to use it as the lingua franca.

Social media companies have, notably, been quick to localize their websites for the large Indonesian market. Facebook offers their entire website in Bahasa Indonesia for its millions of users in the country. An English language based utility would not have had the same impact and reach the amount of usage that it has without a translated version.

As Indonesia now looks to move beyond its reliance on commodities, it need look no further than its own technology savvy population before its boom turns into bust. The country, once ignored by large corporates, is now becoming the place to do business even though challenges remain. Though any move into Indonesia has to be backed up by investment in language and localization services to make the right impact on the majority of Indonesians.


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