Rising Urbanization and Growing Middle-class Population to Create Opportunities for the Consumer Electronics and Appliances Market in Indonesia Through 2020, Reports Technavio

LONDON--()--Technavio analysts forecast the consumer electronics and appliances market in Indonesia to grow at a CAGR of over 10% during the forecast period, according to their latest report.

The research study covers the present scenario and growth prospects of the consumer electronics and appliances market in Indonesia for 2016-2020. The report also lists consumer electronics and consumer appliances as the two main product segments. The consumer electronics segment accounted for 84% of the total revenue.

Technavio consumer and retail analysts highlight the following four factors that are contributing to the growth of the consumer electronics and appliances market in Indonesia:

  • Shift toward discretionary spending
  • Entry of global retailers into Indonesian market
  • Retail expansion across cities
  • Rising urbanization and growing middle-class population

Shift toward discretionary spending

A shift in customer preference toward discretionary spending can be seen in recent times, which stands as one of the primary growth drivers for the consumer electronics and appliances market in Indonesia. Customers in the country are in a healthy state in terms of purchasing power despite the slowdown of the economic conditions.

A large section of the Indonesian population is entering the middle-class and affluent customer (MAC) socioeconomic category in recent times. There are currently about 74 million MACs in Indonesia, and the figure is expected to double by 2020, reaching about 140-142 million. With growing affluence, more Indonesians have started using electronic goods and appliances like smartphones. “More spending on discretionary goods and services, and the push toward an information-based society has led to more Indonesians using mobile devices. Rising loan demand and credit options are also encouraging more consumers to purchase electronic goods and appliances,” says Poonam Saini, a lead analyst at Technavio for retail goods and services research.

Entry of global retailers into Indonesian market

The growing number of foreign players entering the Indonesian market will have a positive impact on the growth of the retail sector in the country during the forecast period. High consumer confidence, an expanding middle-class population, and rising personal income have allowed private consumption to be one of the important components of Indonesia's economy and have attracted numerous global retailers.

In 2014, SPAR International opened its chain in the country. South Korea’s Lotte, which operates a departmental chain, also opened its first supermarket in Jakarta. Major online retailers are also entering the market to further strengthen their global presence. For instance, Alibaba entered the burgeoning Indonesian market through Aliexpress.

Retail expansion across cities

The traditional local markets, which were the center of retail activity, are now being increasingly replaced by efficient hypermarkets and mini markets, with the latter being particularly popular among Indonesia's young population. A huge geographic shift is taking place in Indonesia's retail landscape, with the center of attention increasingly moving from Greater Jakarta and Bali to regional capital cities across the country.

Matahari Putra Prima, opened 39 new stores in 2013 comprising 19 Hypermarts across the country. PT Hero Supermarket, which also owns Giant hypermarkets, Starmart mini-markets, and the Guardian chain of pharmacies, opened 77 new stores in 2013.

Rising urbanization and growing middle-class population

The population of Indonesia is young and expanding. The rapid urbanization of the country will make it one of the fastest-growing consumer markets in the world in the coming years. Indonesia’s urban class represents a population of 55 million and is expected to reach 86 million in 2020. Indonesia’s urban population increased from 42% to 55% during 2000-2013 and reached a total population of 138 million residents. By 2030, this share is expected to reach 71% or 209 million people. “This growing urban population and their willingness to pay more for premium products will have a major impact on the growth of the market in the next five years,” says Poonam.

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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

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Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com

Release Summary

Technavio analysts forecast the consumer electronics and appliances market in Indonesia to grow at a CAGR of over 10% during the forecast period, according to their latest report.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com