Indeed, Indonesia is now even included in the recently identified BIITS markets – Brazil, India, Indonesia, Turkey and South Africa, which have usurped the BRIC markets – Brazil, Russia, India and China – as the primary focus for growth.
Recent Euromonitor market research analysis has gone one step further in confirming the region as the next big market in global commerce, and singled out the country as “one to watch”.
A boom brewing
The market research firm notes that although latest figures show real GDP growth decreased to its slowest pace since 2009 in the first quarter of this year; “in the long term, if not on the same scale as China in the BRIC, Indonesia will remain the key market to watch in the MINT.”
Analysts call up the country’s expanding middle class as a key reason behind its confidence in the country’s upcoming growth, noting; “the number of households with an income over US $10,000 (in constant 2013 prices) is expected to increase by an average 1.9 million per annum to 2030.”
With consumer expenditure expected to see real growth of just under 50% up to 2020, and over 150% to 2030, Indonesia is set to reach $777 billion in spending - or the equivalent of a second South Korea, according to the firm.
With cosmetics brands stepping up their presence in the country, it seems the industry is getting ready for the region’s upcoming growth.
This readying has been seen in moves by suppliers, with Clariant and Evonik, two big specialty chemicals manufacturers within cosmetics, having recently opened raw material production plants in the country.
On the retail front, Japanese beauty brand Shiseido has just signed a joint venture agreement with local firm PT Sinar Mas Tunggal, in a move set to further its ongoing expansion in Indonesia.
Market research firm Nielsen recently revealed that revenue growth of rural cosmetics markets has been particularly high, ballooning by over a quarter in the last year.
Hellen Katherina, director of home panel services for Nielsen Indonesia, explained the growth to CosmeticsDesign-Asia.com.
“The growth in the rural areas is driven by two factors: a 5% increase in penetration (or 5% more households buying cosmetics) and an increase in spending on cosmetics,” she noted.
“For the latter, it is due to price increase - the average price increase in rural areas for cosmetics is 18%).”