It is fair to assume that large populations mean large markets and, with a population of over 263 million, the Indonesian market is one of great potential. As the 4th most populated country in the world, and with over half of the population under 30 years old, Indonesia is set to become a major economic powerhouse in Southeast Asia. According to the latest statistics and predictions, it is already on its way to doing so. Currently, Indonesia is the 15th largest economy in the world and by 2030, it is expected to be the 5th largest.
What is driving this growth? The economy is primarily fuelled by consumption and spending from an increasingly affluent middle class. As living standards improve, more of the population is moving towards the “middle-class and affluent customer” (MAC) status. In 2013, only 74 million people were classified as MAC and this is expected to double by 2020.
This increasing wealth is complemented by the decrease in the cost of living. Inflation rates have almost halved in the last 5 years – falling from 6.4% in 2013 to 3.49% in 2016.
Historically, Indonesia has had a fairly strong and stable economy. With a GDP of US$900 billion, it is the highest in Southeast Asia. Indonesia’s GDP growth has remained steady over the past 15 years, even maintaining 5% throughout the Global Financial Crisis. By some standards, Indonesia is outperforming several Western countries, Australia included.
By simply looking at the statistics on digital connectivity at face value, the numbers are comparable to most other countries in the region. However, if we factor in Indonesia’s enormous population, the true prevalence of technology in the country becomes much more compelling.
Social media is, in fact, an area where Indonesia stands out in the region. On a global scale, the country records the highest mobile Facebook usage with approximately 63 million users in 2015. Jakarta, Indonesia’s capital city, is also branded as “the world’s number one Twitter city”.