Representing the world’s fifth-largest tobacco market, Indonesia’s tobacco industry has soared in recent years, with manufacturers vying for market supremacy in a country with an estimated 85m smokers. The market has long been attractive to major international players such as Philip Morris International (PMI) and British American Tobacco (BAT), which both witnessed sharp growth in profits after…
Although Indonesia’s retail sector was officially added to the government’s negative investment list in April 2014, thereby prohibiting foreign ownership of smallscale enterprises, foreign investment in large-scale operations – particularly in the fast-moving consumer goods (FMCG) segment – has seen a sharp rise in recent years. Most recently, global equity investor Warburg Pincus announced…
E-commerce in Indonesia is expanding as retailers capitalise on a rising middle class, growing demand outside of Jakarta and a tech-savvy population embracing new sales and payment platforms. “It is important to start adopting social media as a stable part of our business strategy,” Henri Honoris, president-director of Modern Internasional, a retail operator and owner of the 7-Eleven franchise…
Indonesia is slated to see its already sizeable base of mobile broadband subscribers expand in the coming years, with the recent rollout of 4G/long-term evolution (LTE) services by the country’s big three operators. That said, operators are facing challenges such as insufficient infrastructure, high capital expenditure requirements and limited available spectrum. The government’s recent move to…
The government is moving to boost internet usage via an ambitious five-year broadband plan. Acting as one of the country’s first IT blueprints, the plan targets expanding internet access to the most remote rural areas, enhancing e-services across a number of sectors and improving network performance nationwide. The plan has been welcomed by citizens, especially those outside of Java, where infrastructure…
With the sector booming and many more projects still to come as part of Indonesia’s drive to boost its infrastructure, foreign companies are also looking to take a slice of the country’s construction pie. In the past, entering the local market was sometimes considered challenging, but today moves to boost foreign ownership limits and major regional changes are easing the path to the Indonesian…
Despite the major war chest of state funding Indonesia’s government has assembled from fuel subsidy cuts and other revenue raisers, Jakarta is still short of meeting the financial targets necessary to fund its ambitious infrastructure roll out. Finding ways to bridge the gap is thus a key point of discussion in the state capital. That said, one major way to meet this challenge that has already been…
Following concerns that a boom in the construction of retail malls was causing increased congestion, as well as threatening the livelihoods of many smaller retail operators, in 2011 Jakarta’s then-governor Fauzi Bowo initiated a moratorium on further mall building. Since then, this moratorium has been renewed by his successors. The freeze on mall development has had a major impact on the modern retail…
Unlike other global economies, Indonesia largely surfed over the 2008-09 financial crisis, with the economy bucking Western trends and going into a strong, expansionary mode – chalking up 6.5% GDP growth in 2011 and over 5% growth in the years since. This came in the wake of strong economic growth in the years prior to 2008 as well, leaving the Indonesian per capita income in 2013 at a level five…
The capital of North Sumatra, Medan, is the fourth most populous city in Indonesia and the largest city outside of Java. Located on the Deli River, which flows into the Straits of Malacca, its trading port has made it a strategic location for most of its history, as well as a gateway to the island of Sumatra. Remnants of architecture reflect Medan’s Dutch colonial past, with City Hall, an iconic…
