It often happens that economic growth in a capital city exceeds that of the country in general.
However, combine Jakarta’s 4.8% growth in 2016 with Indonesia’s ranking as ASEAN’s largest economy and world’s 10th largest market in terms of purchasing power parity, and you’ve got perfect conditions for a fast-growing, increasingly wealthy consumer market.
Political stability in recent years is shifting Jakarta from a manufacturing hub to a retail one, with savvy brands expanding at high rates. Australia’s mid-size businesses need to jump on the bandwagon in order to establish their brands on the market. Another great advantage is Indonesia’s proximity and close ties with other economies in the area, including neighbouring Malaysia.
The government’s strategic plans reinforce the attractiveness of the market: boosting ecommerce and entrepreneurship are high on the list, and many small local businesses could be attractive targets for acquisitions, given their success, established brands, and access to development incentives.
Building up an economic giant
Another opportunity for Australian companies lies in the recent wave of investments in infrastructure. Public-private partnerships design and management, a key strength of our economy, are highly marketable abroad. From construction companies to professional service ones providing counsel to investors, many will find Indonesia’s focus on developing infrastructure a considerable opportunity.
Like many developing markets in Asia, Indonesia is not without its problems. Cultural savviness and the ability to deploy investments strategically are required to reach success in a cost-conscious environment.
Grant Thornton advises mid-size businesses in a variety of industries regarding their expansion to Asia. If you’d like to discover what opportunities Jakarta can bring to your growing business, contact us for a free Asia Fit workshop today.