Indonesian retail consumer trends and opportunity report

Given the vast abundance of retail customers joining the global consumer ranks on a daily basis, retailers are in an excellent position for the foreseeable future. One of the fastest-growing regions in the world of retailers is Southeast Asia, where emerging consumers spell new opportunities for retailers based both inside the country and abroad. Southeast Asia is packed to the brim with potential world retail consumer powers, including Singapore, Thailand and Malaysia.

Yet one of the most powerful and surprising countries to show signs of strong retail consumer growth is Indonesia. Indonesia is an open opportunity to cash in on an emerging market where competition has not yet been turned up to an all-time high.

Want proof? Easy. Here are five trends that demonstrate the potential of the future of the Indonesian consumer market.

#1: Consumer spending is increasing.The first way to understand the power of a particular consumer market is to look at how often the consumers open their wallets. Indonesian consumers appear to be happier and happier to do just that. Indonesian consumer spending has been on the rise since the beginning of 2008 and has grown by nearly 40%. And this spending is not an artificial sign or anomaly; consumer confidence and retail performance are both up during that time, suggesting that the uptick is fundamentally supported and here to stay.  

#2:  Social media use is increasing. 
On both the consumer and business side of the Indonesian social media retail equation, engagement and involvement are on the upswing. Indonesia has the fourth largest Facebook population, matching its placement as the fourth largest overall population, too. Several retailers specific to Indonesia have more than one million Facebook fans and engage with users actively on a daily basis. And 2.4% of the world's Twitter posts come from Jakarta, a staggering percentage of the overall information in the network.

#3: Smartphone use is increasing. 
Smartphone volume in Indonesia has grown by more than 50% in 2012-2013, suggesting that the impressive mobile penetration of the country may have officially translated into smartphone penetration. And given the retail shopping capabilities that come with a smartphone and the ever-increasing number of shoppers showing a preference for engaging, shopping and surfing on their mobile devices, the fast-growing breadth of smartphone usage is becoming an undeniable fact.

But it's not just phone possession that is impressive in the country. The average Indonesian smartphone owner spends more than 4 hours on their mobile device. While much of that time is for texting or live conversation, at least a small sliver - 23 minutes - will go toward using social media.

#4: Foreign brands are flooding into the country.
Large department stores from Japan and Thailand have recently made moves into Indonesia to take advantage of the country's growing retail market potential. It's only a matter of time before retailers from other parts of the world decide to get in on the action.

Having said that, now is the best time to capitalize on this trend. Other companies have already provided a solid test tube (proving ground) to demonstrate the power of retail possibilities in the country. The market is ripe for entry, yet open for growth, the perfect storm for retailers to set up shop and play to Indonesian customers.

#5: Indonesia per capita is on the rise. 
While consumer spending is one part of the puzzle when it comes to predicting the future of retail, overall incomes, cash on hand and income growth potential are just as essential. Indonesian per capita is expected to increase by more than 57% over the next few years, signaling a significant move toward a wealthier overall population and stronger middle class in the country. The rise in affluence is a sign of plenty of potential positive societal factors for the country. As for retailers, it means more shoppers and better revenues.

Anant Choubey is responsible for sales and marketing in the APAC region at Capillary Technologies and currently manages the firm's business across South East Asia. His prime focus is to strategize and expand Capillary in burgeoning market in South East Asia. He has donned many hats in Capillary over the years, from operations to client servicing to business development and has been instrumental in setting up Capillary's India business, before moving to Singapore to establish and manage South East Asia market.  

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