Indonesia Retail

E-commerce firms in Indonesia are reporting higher volumes of online sales as consumers practise social distancing amid the Covid-19 outbreak, with the government looking to the flourishing sector as one means of addressing tax shortfalls resulting from the wider economic slowdown.

Steady economic growth, rising disposable income levels and cheaper credit are set to spur activity in Indonesia’s retail sector through to the end of the year and into 2017.

Expectations that rising incomes among Indonesia's burgeoning middle class will generate a retail boom were boosted by rosy end-of-year sales results. However, the upward trend is threatened by both global and domestic trends.

Rising profits and plans for expansion by major Indonesian retailers as international players enter the burgeoning mall segment highlight confidence in the sector’s prospects. However, creeping inflationary pressures and growing regulatory requirements threaten to dent the growth expectations of the industry and the overall economy.

With GDP growth for 2011 expected to have hit more than 6% and home to a growing and savvy population, the future of Indonesia’s retail sector looks promising, though there are concerns that a recent influx of mall building has glutted the market temporarily.