After our market spotlights on Vietnam and Thailand, we decided to continue our swing through South East Asia. Our new country spotlight takes us to Indonesia - where the gig economy, travel industry, and direct selling markets are booming. Companies looking to expand to emerging markets should definitely keep an eye out on Indonesia's growth potential and flourishing economy.
Euromonitor reports that Indonesia’s economy outperformed many of its neighbors in 2017. Growth in the travel industry was seen as a result of lodging and airline contributions. The government’s aggressive promotion of the tourist industry is working towards a goal of having 20 million foreign visitors by the end of 2020.
Bali, one of the most popular tourist destinations in Indonesia, accounts for much of the country's growth. According to AirBnB data on the Asia Pacific Villa Rental Market, Bali accounted for 35% of the entire APAC market, with 3,276 villas accounting for $138 million in bookings. Online travel booking is also anticipated to grow from an estimated $2,938,000 USD in 2018 to an anticipated $4,956,000 USD by 2022. Hotels make up the majority of this segment, accounting for 75% of the industry.
Frequent travelers to Indonesia often use more familiar on-demand ride hailing services such as Go-Jek, Grab and Uber that are well established in that area's gig economy. Alone, the ride hailing market shows huge potential for growth, with the number of monthly users expected to rise from 7 million to 29 million by 2025. However, according to some, “on-demand car transport is just the tip of the iceberg,” with companies such as Seekmi, Ahlijasa and ServisHero providing services like home improvement, housekeeping, car servicing, etc.
Another hot industry in the 2018 Indonesia market is direct selling. In 2014, direct selling joined the ranks of billion dollar markets, with $1.07 billion USD in sales. According to industry expert, Asenshia, Indonesia is a good fit for direct selling for several reasons, including a large population (225 million), a young population (median age of 29.6), the cultural importance of personal and social interactions, and unique geographic conditions (18,307 islands). As a result, direct selling is a competitive distribution channel compared to traditional retail in this market.
Rapid growth is expected to continue, following recent growth of 11.3%. According to Asenshia, there are 11 million direct sellers in Indonesia today. Of all the items sold, household goods and durables represent 35%, compared to APAC's highest in Wellness representing 45%. Personal care and cosmetics currently represent a smaller portion of 11%, but are expected to grow as companies from Europe and the U.S. enter the market.
The Transpay Edge
Transpay offers businesses the simplest way to pay direct sellers, gig workers, travel hosts, and suppliers. We offer same-to-next day transfer of payment, in U.S. Dollar (USD) or Indonesian (IDR) Rupiah, directly to local bank accounts or cash pickup locations. Transpay can help you reach these emerging markets quickly and cost effectively, ensuring your payees get paid how they want to be paid!
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