Top Trends in Indonesia

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A short report about top trends in Indonesia. Link: https://readymag.com/u52919213/34670/

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  • TOP TRENDS IN INDONESIA T thomas.klaffke@gmail.com 2014
  • DIGITALIZATION SOCIAL MEDIA EXPANSION UPRISING CITIES TOP TRENDS IN INDONESIA ASEAN INTEGRATION ENTREPRENEURIALISM NEW TOURISM MARKETS INFORMAL SECTOR TRANSFORMATION RISING CONSUMPTION SOCIETY & TECHNOLOGY ECONOMY CHANGING LIFESTYLES
  • DIGITALIZATION SOCIAL MEDIA EXPANSION UPRISING CITIES FUTURE TIMELINE SOCIETY & TECHNOLOGY TOP TRENDS IN INDONESIA CHANGING LIFESTYLES
  • Sources: Hot Chocolate & Mint 2014, CNN 2012, Eat and Treats 2014, Cyclonesia, Antara News, TechinAsia 2012 CHANGING LIFESTYLES
  • INDONESIAS POPULATION IS ONE OF THE YOUNGEST IN THE WORLD: ABOUT HALF OF THE POPULATION IS UNDER THE AGE OF 30 AND 29% OF THE TOTAL POPULATION IS UNDER 15 YEARS OLD THE OUTLOOK ON LIFE OF YOUNG INDONESIANS THAT GREW UP UNDER DEMOCRACY, POST-SUHARTO, POST-ASIA FINANCIAL CRISIS WITH THE OMNIPRESENCE OF DIGITAL DEVICES AND THE INTERNET IS VERY DIFFERENT TO OLDER GENERATIONS: THE YOUNG ARE OPTIMISTIC ABOUT THEIR FUTURE, EXPRESS THEIR OPINIONS AND IDEAS FREELY (E.G. ON BLOGS, SOCIAL NETWORKS), EMBRACE A GLOBAL INTERCONNECTED WORLDVIEW, ARE CONCERNED ABOUT ENVIRONMENTAL ISSUES, ARE ENTREPRENEURIAL AND TECHNOLOGY-DEPENDENT THE NEW TYPICAL YOUNG INDONESIAN IS A COLLECTIVIST, IS SOMEWHAT GEEKY, POSTS FREQUENTLY ON HIS FASHION OR FOOD BLOG, RIDES A BIKE, IS VERY CREATIVE, TWITTERS SEVERAL TIMES A DAY, IS A CITY DWELLER, SPENTS LESS TIME WITH HIS/HER FAMILY AND MORE TIME WITH TECHNOLOGICAL DEVICES, AND WATCHES LESS TV AND MARRIES LATER IN LIFE THAN HIS/HER PARENTS Sources: ABC 2012, World Bank 2013, Goethe Institut 2010, McKinsey 2012a, Jakarta Globe 2012, Youth Lab n/s CHANGING LIFESTYLES
  • DIGITALIZATION
  • INTERNET USERS WILL GROW FROM 72.7m IN 2013 TO 102.8m IN 2016 - FROM 29% OF THE POPULATION TO 39.8% THE SHARE OF POPULATION USING A SMARTPHONE WILL JUMP FROM 4.8% IN 2011 TO 33.8% IN 2017 INDONESIAS E-COMMERCE MARKET IS ONE OF THE FASTEST GROWING MARKETS IN THE WORLD, EXPECTED TO GROW FROM US$4bn IN 2012 TO US$25bn IN 2016, WHEN THE NUMBER OF ONLINE SHOPPERS WILL HIT 49m THE INDONESIAN IT MARKET IS SET TO GROW AT AN ANNUAL GROWTH RATE OF 18% OVER 2012-2016, REACHING A TOTAL MARKET VALUE OF US$11.5bn, IN LARGE DUE TO INCREASED COMPUTER HARDWARE SPENDING - ABOUT US$8.5bn IN 2016 Sources: eMarketer 2013a, eMarketer 2013b, Research and Markets 2012 DIGITALIZATION
  • Growth of Smartphone users in Indonesia 2011 2012 2013 2014 2015 2016 2017 103,6 89,8 74,8 61,2 41,6 26,3 11,7 Smartphone users (million) Phone type as share of all mobile phones 2013 2014 2015 2016 2017 45%50%55% 67% 74% 52%46%40% 28%20% 3%4%5%5%6% Basic phones Smartphones Feature phones OVER THE NEXT FEW YEARS, THE SHARE OF SMARTPHONES WILL CONSTANTLY INCREASE WHILE THE NUMBER OF FEATURE PHONES IN USE ARE EXPECTED TO DECLINE SHARPLY. THIS IS DRIVEN BY CHEAP SMARTPHONES FROM CHINA, GROWING PER CAPITA INCOMES IN INDONESIA AND BY A WORLDWIDE SWITCH FROM CONVENTIONAL PHONES TO SMARTPHONES Sources: eMarketer 2013b, Redwing Asia 2012a DIGITALIZATION
  • Internet user growth between 2009-2012 by age group 0% 100% 200% 300% 15-19 20-24 25-29 30-34 35-39 40-50 Total 104% 167% 300% 238% 125% 86% 40% INTERNET PENETRATION IS HIGHEST AMONG 15-24 YEARS OLD CITY DWELLERS WITH A UNIVERSITY DEGREE BUT IS INCREASINGLY EXPANDING TO OLDER AGE COHORTS. AS OLDER AGE GROUPS HAVE MORE SPENDING POWER, THIS LEADS TO AN IMMENSE BOOST FOR E- COMMERCE Sources: Redwing Asia 2012b, Bayu Syerli Rachmat 2013 DIGITALIZATION
  • SOCIAL MEDIA EXPANSION
  • JAKARTA IS TWITTER CAPITAL OF THE WORLD: 2.4% OF ALL GLOBAL TWEETS COME FROM JAKARTA [BANDUNG RANKS 6TH ] WITH ABOUT 64m ACTIVE FACEBOOK USERS, INDONESIA RANKS AMONG THE TOP 5 LARGEST FACEBOOK MARKETS, IS ADDITIONALLY THE 5TH LARGEST MARKET FOR TWITTER AND THE 12TH FOR LINKEDIN E-MAIL IS OUT: 70% OF INDONESIAN INTERNET USERS SEND PRIVATE MESSAGES VIA SOCIAL NETWORKS IN CONTRAST TO 51% SENDING THEM VIA E-MAIL ON OVER 5m BLOGS, INDONESIANS DISCUSS POLITICS, FOOD CULTURE, LIFESTYLE, FASHION TRENDS AND MORE [blogspot.com, blogger.com and wordpress.com are all among the top 10 of most visited websites] Sources: Semiocast 2012, Jakarta Post 2013, Redwing Asia 2012c, We are Social 2011 SOCIAL MEDIA EXPANSION
  • Sources: statista 2014a, We are Social 2011, TechinAsia 2014 Number of social network users in Indonesia from 2011 to 2017 (in million) 0 27,5 55 82,5 110 2011 2012 2013 2014 2015 2016 2017 109,9 99,7 89,3 79,3 67,2 52,2 34,4 Facebook demographics in Indonesia 2% 2% 6% 21% 41% 28% 13-17 18.24 25-34 35-44 45-54 55+ IN THE LIGHT OF THE 2014 PRESIDENTIAL ELECTIONS, INDONESIAN NETIZENS SEEM TO BECOME INCREASINGLY POLITICAL AS NEW APPS, BLOGS AND WEBSITES LIKE APSI WATCH OR AYO VOTE EMERGE INTO THE DIGITAL SPHERE SOCIAL MEDIA EXPANSION
  • Source: statista 2012b Online activities of mobile internet users in urban Indonesia Access social networking sites Instand messaging Look up content or search for information Access e-mail Download free applications Send photos taken with camera phone to family/friends Download ringtones Download or view personal photos Play or stream online music 0 0,2 0,4 0,6 0,8 21% 22% 22% 25% 30% 37% 42% 45% 76% SOCIAL MEDIA EXPANSION
  • UPRISING CITIES
  • JAKARTA GROWS, BUT OTHER CITIES TOO: JAKARTA ANNUAL GROWTH RATE SINCE 2002: 5.8% MEDAN, BANDUNG, SURABAYA: 6.7 - 7% JAKARTA COULD BECOME A MEGACITY BY 2030 WITH 12.7m INHABITANTS JAKARTAS SHARE OF GDP IS EXPECTED TO REMAIN AT 22%, WHILE THE SHARE OF OTHER LARGE AND MID-SIZE CITIES [2-10 mio] IS SET TO INCREASE FROM 17% TODAY TO 27% IN 2030 32m PEOPLE WILL MOVE FROM RURAL TO URBAN AREAS UNTIL 2030 - THE URBANIZATION RATE WILL THEN BE AT 71%, UP FROM 53% TODAY Source: McKinsey 2012b UPRISING CITIES
  • Source: McKinsey 2012b Pekanbaru Pontianak Balikpapan Medan Surabaya Bandung Jakarta 0% 2,5% 5% 7,5% 10% 5,8% 6,7% 7% 7% 9% 9,5% 9,8% ANNUAL AVERAGE GDP GROWTH RATE OF CITY GROUPS IN INDONESIA (ex. JAKARTA): ! LARGE CITIES [5-10 mio]: 9.1% MIDSIZE CITIES [2-5 mio]: 6.9% SMALL CITIES [150.000 to 2 mio]: 6.3% UPRISING CITIES
  • 2020 2025 2030 103m INTERNET USERS or 40% of the population US$25bn: Value of E-COMMERCE MARKET 33.8% of the population is using a SMARTPHONE 4G LTE becomes available in URBAN AREAS 110m SOCIAL NETWORK USERS Jakarta becomes MEGACITY [12.7m inhabitants] 71% URBANIZATION rate 67.5% URBANIZATION rate Population with WORKING AGE: 70% of total Population GREATER JAKARTA: 35m SOCIETY & TECHNOLOGY
  • RISING CONSUMPTION ENTREPRENEURIALISM NEW TOURISM MARKETS INFORMAL SECTOR TRANSFORMATION FUTURE TIMELINE ECONOMY TOP TRENDS IN INDONESIA ASEAN INTEGRATION
  • RISING CONSUMPTION
  • INDONESIAN HOUSEHOLDS SPENDING MORE THAN IDR2,000,000 PER MONTH WILL INCREASE FROM 74m IN 2012 TO 141m IN 2020 Sources: Boston Consulting Group 2013, McKinsey 2012b, International Enterprise Singapore 2013, Knight Frank 2013 THE INDONESIAN CONSUMING CLASS - THOSE WITH AN ANNUAL NET INCOME OF ABOVE US$3,600 - WILL GROW FROM 45m TODAY TO 135m IN 2030 CONSUMER SPENDING IS PROJECTED TO GROW BY 7.7% ANNUALLY FROM 2010-2030 - INDONESIAS CONSUMER SECTOR IS PROJECTED TO BE WORTH US$1.1 trillion BY 2030 LUXURY PROPERTY PRICES IN 2012 JUMPED IN JAKARTA MORE THAN ANYWHERE ELSE IN THE WORLD BY 38%, THE ISLAND OF BALI IS SECOND WITH 20% GROWTH RISING CONSUMPTION
  • Source: McKinsey 2013 Annual consumer spending in Indonesia (CAGR, 2010-2030, in %) Financial services Leisure Health care Education Personal items Food and beverage Apparel Telecom Transportation Housing and utilities 0% 2,2% 4,4% 6,6% 8,8% 11% 4,5% 4,6% 4,7% 5,0% 5,2% 5,3% 6,0% 6,2% 7,5% 10,5% RAPID URBANIZATION, RISING INCOME LEVELS, FAVORABLE DEMOGRAPHIC PATTERNS AND CHANGING LIFESTYLE TRENDS ARE JUST SOME OF THE FACTORS THAT ARE BOOSTING CONSUMER SPENDING IN INDONESIA RISING CONSUMPTION
  • Source: Boston Consulting Group 2013 Indonesian population divided into various income groups (2012-2020 in million) Elite Afuent Upper middle Middle Emerging middle Aspirant Poor 0 17,5 35 52,5 70 28,3 47,9 50,5 68,2 49,3 16,5 6,9 64,5 65,4 44,4 41,6 23,2 6,6 2,5 2012 2020 Monthly household expenditure* (IDR millions) Elite 7.5 and more Emerging middle 1.5 - 2.0 Afuent 5.0 - 7.5 Aspirant 1.0 - 1.5 Upper middle 3.0 - 5.0 Poor less than 1.0 Middle 2.0 - 3.0 RISING CONSUMPTION *Expenditures include regular household expenditures (food, utilities, transportation, communication, regular household supplies) and exclude discretionary spending
  • ENTREPRENEURIALISM
  • D