Indonesian Socialite

1. Background: Indonesia’s middle class Indonesia’s economy is growing rapidly, and a large portion of the population is entering the middle-class socioeconomic category. As those in this group begin to increase their spending in key segments—such as home goods, vehicles, consumer durables, and financial services—this is a critical window of opportunity for companies that sell consumer goods. Currently, Middle class and affluent customer (MACs) represent about 30 percent of the Indonesian population, or 74 million people, and that group will grow far larger in the coming decade, in both absolute and percentage terms. About 8 million to 9 million people currently enter the MAC segment each year, and by 2020, this group will reach a total of 141 million people, or 53 percent of the population. At that point, the island of Java alone will have more MACs than the entire population of Thailand, and Sumatra will have more than the populations of Malaysia and Singapore combined. In addition, Indonesia’s demographics are attractive. More than 60 percent of its residents are currently aged 20 to 65—the principal working years. In fact, its working-age population is almost twice that of Vietnam and nearly three times the size of South Korea’s entire population. Another 27 percent of Indonesia’s population is below age 15, giving the country a large incoming workforce and a low dependency ratio. The country’s large working-age population also results in a large domestic market; more than half of Indonesia’s GDP is derived from domestic demand, which makes the country resilient to external shocks. Table 1 shows the indonesian household spending profile based on boston consulting group research.

Indonesia’s Population is Growing and Becoming more Affluent

Indonesia Population, 2012 (millions) Monthly Household expenditure (IDR millions) Elite Affiluent Upper middle Middle Emerging middle Aspirant Poor 7,5 and more 5,0 - < 7,5 3,0 - < 5,0 2,0 - < 3,0 1,5 - < 2,0 1,0 - < 1,5 ...