A Key South East Asian Market

Jakarta image


Article by: Jonathan Sheldrake

Photograph by: Christoph Bauer

At GMO Research Inc we are investing heavily in panels in South East Asia. Vietnam was the first major one outside the major markets China, Japan and Korea. Now we are working to increase our presence all over SE Asia. Two of the largest SEA countries are Indonesia and the Philippines. Our Indonesian panel has been strengthened considerably recently to over 200,000. The Philippines will be covered soon in a similar article so this article will focus on Indonesia, which is the largest country in the area with a population of 249 million. This is nearly twice that of Japan (129 million) and only beaten in South East Asia by China. It is also, by far, the largest member country of the Association of Southeast Asian Nations (ASEAN), Not surprisingly Indonesia is becoming, more and more, an integral part of our online survey operations in Asia.

It’s a mainly Muslim country, in fact the largest Muslim country in the world in terms of population. This means some products like alcohol and western style clothing have issues in this market. That said alcohol is far more widely on sale than in Arabic countries, especially beer which can even be obtained outside urban areas. Indeed, there is also a local distilled spirit called Arak that is also widely available. It should not, however, be ignored that for FMCG companies as a whole the opportunities are significant. Economic Growth is expected to remain at 5% per year in the medium term, a rate that most European economies can only dream of.


GDP per capita reached 11.135 USD in 2015. An interesting comparison is with Romania in Europe, which has become considerably wealthier in recent years. In comparison, Romania’s GDP per capita was 9.526 USD in 2015. We would, therefore, contend that Indonesia is not really an emerging market, more of a large established one. Its high population size makes it a compelling market for consumer goods companies to expand their footprint in Asia.

One factor that has helped the Indonesia economy up to now is the fact it's an oil producing country. In fact, Indonesia is the 24th largest oil producer in the world and a member of OPEC. Moreover, for many years now. the county is also a net importer of oil as Indonesia's oil consumption shows an upward trend. Due to a growing population, an expanding middle class and a growing economy, demand for fuel is continuously increasing. As domestic production cannot meet domestic demand, Indonesia imports about 350,000 and 500,000 barrels of fuel per day from several countries. It’s a shame because there are still unexploited oil reserves in Indonesia. A lack of exploration in this sector has resulted in the decline in Indonesia's oil production. A further contributory factor is the current low oil price and at times stifling government bureaucracy,

There is, nevertheless, a factor that is reducing oil demand: biofuels. Indonesia has consumed more than 2 million kiloliters of biodiesel in the first nine months of this year, as part of a government program introduced to stabilize prices in the palm oil. This still represents less than 7% of the 33 million tons of crude palm oil produced in 2017.The government's growth target for 2020 is 26%. It is also worth considering that the sector also employed 380,000 people, not at all insignificant. In 2015, only 5% of Indonesia's energy was obtained from mixed and renewable sources, including biofuels. This is expected to increase to 23% by 2030, and to 30% by 2050. There is an ecological price to pay for this though and that is deforestation.


Unemployment is low around 6%, far less than many European countries. As in other Asian countries, also there are a lot of SMEs. SMEs provide jobs for 107.6 million Indonesians and contribute nearly 61 percent of the country's GDP. As part of a government initiative Micro and Medium enterprises may be able to get cheaper loans and pay lower income tax next year. The government offers a subsidized financing scheme for micro, small and medium enterprises known as KUR in recognition of the important role these businesses play in the country’s economy.

Since 2012, the Indonesian Orthodox Islamic Entrepreneurs Association (HIPSI) has created workshops and training programs at Pesantren (Islamic boarding schools) in 15 provinces across the country in hopes that 1 million Islamic entrepreneurs would be produced by 2022. The association has focused on providing training in several domains, namely agribusiness, maritime, culinary, information technology and creative industries. A secondary aim, apart from creating jobs is to entice younger people away from Islamic radicalism. The Santri are more orthodox Muslims than many other Indonesians and these schemes are particularly targeted at them.


The country faces demand for independence in several provinces, encouraged by East Timor's 1999 success in breaking away after a traumatic 25 years of occupation. However, the current president Joko Widodo is widely felt to be incorrupt after many years of controversies preceding his rule. This is very important after years of corruption scandals which have plagued both Indonesia and neighbouring Malaysia.


Indonesia is sadly prone to natural disasters such as earthquakes and volcanic eruptions. A powerful undersea quake in late 2004 caused massive Tsunami waves. The disaster left more than 220,000 Indonesians dead or missing. So similar to Japan, there is the danger that natural disasters could have a serious effect on the country and its economy.


In 2014 there were said to be 71 million internet users in Indonesia. Indonesians, are in fact, among the world's most active users of Twitter. As in other South East Asian countries the panel we have is mainly urban, SEC A-C and of younger age groups. Though we are making efforts to get it as nationally representative as possible. It should not be forgotten, though, that internet representation is quite different to national representation, and online panels necessarily follow internet representation. We also recommend to use a device agnostic approach in the country as many Indonesians own mobiles and tablets but not standard PCs. We at GMO Research Inc., are happy to provide not only sample, but also consultancy to help you run successful online campaigns in Indonesia. Feel free to ask!