by Aviccena Izzul | Mar 19, 2024 | Market Entry
Introduction
The Philippines is an emerging market with immense potential for businesses looking to expand their horizons. With a rapidly growing economy, a young and skilled workforce, and a strategic location in the heart of Southeast Asia, the country offers numerous opportunities for investors and entrepreneurs alike. In this blog, we will delve deep into the business landscape of the Philippines, exploring the various sectors and opportunities that can propel your venture to success.
Economic Challenges
The Philippines faces several economic challenges that can impact business operations. High unemployment and poverty rates are a major concern. In 2020, the unemployment rate in the Philippines reached 10.3%, the highest since April 2005, accounting for 4.5 million unemployed Filipinos in the labour force. Poverty rates also remain high, with 16.7% of the population living below the national poverty line in 2018.
Inadequate infrastructure is another challenge for businesses operating in the Philippines. The country lags behind many of its neighbours in infrastructure development, with traffic congestion in Metro Manila being a major problem. Port congestion is also regularly raised as a constraint to business.
The Philippines also heavily relies on fossil fuels as an energy source. In 2019, 73.56% of its energy came from fossil fuels. This reliance on non-renewable energy sources can lead to fluctuations in economic growth rates and can impact businesses operating in the country.
Adding to these challenges, the country’s economic growth rate has been volatile, with a record 10% contraction in 2020 due to the COVID-19 pandemic. While the economy is expected to grow by around 5.3% in 2023, according to a report by McKinsey, the World Bank is more pessimistic and expects the pace of expansion to slow to 5.7%. These economic challenges can make it difficult for businesses to enter and operate successfully in the Philippines market.
Political and Regulatory Challenges
Expanding a business in the Philippines market also comes with several political and regulatory challenges that businesses must be aware of. The government’s bureaucracy and red tape can be a significant obstacle for businesses looking to establish themselves in the country. According to the World Bank’s Ease of Doing Business 2022 report, the Philippines ranks 95th out of 190 countries in terms of ease of doing business.
Moreover, regulatory uncertainties and slow infrastructure development can also hinder business growth. The country has been grappling with limited infrastructure development, which has affected transportation, communication, and power supply.
Foreign ownership in the Philippines is limited by the Foreign Investment Negative List (FINL), which restricts foreign ownership in certain industries. The 12th Regular Foreign Investment Negative List (RFINL) was issued in June 2022, providing foreign investors with greater access to the Filipino economy. However, foreign equity is still prohibited in certain industries, such as mass media (except recording and internet).
The judicial system in the Philippines can also be complex and slow, inhibiting the timely and fair resolution of commercial disputes. This can be a challenge for businesses operating in the country. According to the World Justice Project (WJP) Rule of Law Index 2022, the Philippines ranks 97th out of 140 countries in terms of judicial independence, highlighting the need for judicial reforms.
Tips for Business Entry in the Philippines Market
Expanding your business in the Philippines can be daunting, but it can be a lucrative venture with the right approach. Here are some tips to help you navigate the challenges of doing business in the Philippines:
1. Understand the Culture
The Philippines has a unique culture, which can influence how business is conducted. Take the time to understand the local customs, traditions, and values. Building relationships is key in the Philippines, and getting to know your potential partners and clients can pay off in the long run.
2. Partner with a Local
Finding a trustworthy local partner can help you navigate the complex business landscape in the Philippines. Look for a partner with a strong network and established relationships in the industry you’re interested in.
3. Be Patient
Doing business in the Philippines requires patience. The bureaucracy can be slow, and building relationships and establishing trust can take time. Be prepared for a longer timeline than you may be used to in other markets.
4. Be Flexible
The business landscape in the Philippines is constantly evolving, and you may need to be flexible and adapt to changes. Be open to new ideas and approaches, and be willing to pivot your strategy if necessary.
5. Invest in Marketing
Marketing is essential in the Philippines, where competition can be fierce. Invest in a comprehensive marketing strategy, including digital marketing, social media, and traditional advertising.
By following these tips, you can increase your chances of success in the Philippines market. While it may take time and effort, the potential rewards make it worth the investment.
Local Partner for Market Entry in Philippines
AsiaCommerce provides several services such as comprehensive market research, arranging partnerships in local industry, and creating sales programs based on market research.
Our Market Insight Research, Business Partnership Engagement, and Business Registration and Establishment services can help you expand and develop your business, register and establish your products and company.
Our strategy consulting services domain focuses on supporting private sector clients with comprehensive and specialized development regarding the company’s needs and also on the public sector for a broader scope.
If you’re interested in exploring market opportunities in Indonesia, visit our service page for more information. Our team will work with you every step of the way, from finding a supplier, shipping door-to-door, and handling import documents to ensure your success in importing from Indonesia.
by Aviccena Izzul | Mar 8, 2024 | Market Entry
Indonesia, known for its diverse culture and vibrant economy, is also a significant player in the global footwear market. From traditional sandals to modern sneakers, the Indonesian footwear industry reflects a rich tapestry of heritage and innovation. In this blog post, we delve into the current trends, challenges, and promising opportunities within Indonesia’s footwear market.
Overview of the Footwear Market
The global footwear market is a dynamic and diverse industry that encompasses a wide range of products, from athletic shoes to fashion-forward footwear. Driven by fashion trends, lifestyle changes, and evolving consumer preferences, the footwear market continues to experience steady growth. This market’s versatility caters to various demographic segments, offering options for sports and outdoor activities, casual wear, and formal occasions.
Key Trends Shaping the Market
Here are some key trends shaping the footwear market in Indonesia :
1. Eco-Friendly Footwear
There is a growing demand for environmentally sustainable footwear options in Indonesia. Consumers are increasingly aware of the environmental impact of their purchases and are seeking out shoes made from recycled materials or produced using sustainable manufacturing practices.
2. Athleisure Wear
The athleisure trend is on the rise in Indonesia, driven by the increasing health and fitness consciousness among consumers. Sneakers and athletic shoes are not only worn for sports activities but have become fashionable everyday footwear choices, especially among the younger demographic.
3. Customization and Personalization
Indonesian consumers are showing a preference for customizable footwear options. Brands offering customization services, allowing consumers to design their shoes according to their preferences, are gaining popularity in the market.
4. Digital Transformation
The footwear industry in Indonesia is undergoing a digital transformation, with brands increasingly leveraging online platforms and e-commerce channels to reach a wider audience. The popularity of online shopping is driving brands to invest in digital marketing strategies and enhance their online presence.
5. Rise of Local Brands
Indigenous Indonesian footwear brands are gaining prominence in the market, offering unique designs that reflect local culture and heritage. These brands are resonating with consumers who appreciate authenticity and craftsmanship.
6. Fashion and Lifestyle Influences
Fashion and lifestyle trends play a significant role in shaping the footwear market in Indonesia. Influences from international fashion capitals, as well as local cultural influences, impact consumer preferences and purchasing decisions.
7. Health and Comfort
With an aging population and increasing awareness of foot health, there is a growing demand for comfortable and supportive footwear options in Indonesia. Brands that prioritize comfort and functionality alongside style are likely to find success in the market.
Challenges Facing the Industry
Despite the promising trends, the Indonesian footwear industry also faces several challenges. One significant challenge is competition from cheap imported footwear, particularly from countries with lower production costs. These imports often undercut local manufacturers, posing a threat to their market share.
Another challenge is the need to upgrade technology and improve manufacturing processes to enhance efficiency and competitiveness. Many Indonesian footwear manufacturers still rely on traditional methods, which can hinder their ability to meet modern consumer demands effectively.
Furthermore, the industry grapples with issues related to intellectual property rights and counterfeiting. Protecting brand integrity and combating counterfeit products remain ongoing challenges for both domestic and international footwear brands operating in Indonesia.
Well-known Footwear Brand in Indonesia
Several international footwear brands have established a significant presence in the Indonesian market due to the country’s large population, growing economy, and increasing consumer purchasing power. Some of the prominent international footwear brands operating in Indonesia include :
1. Nike
As a global leader in athletic footwear and apparel, Nike has a strong presence in Indonesia. The brand’s innovative designs and marketing strategies resonate with Indonesian consumers, particularly among the youth demographic.
2. Adidas
Adidas is another major player in the Indonesian footwear market, known for its high-performance athletic shoes and trendy streetwear. The brand’s collaborations with local celebrities and influencers have helped strengthen its appeal among Indonesian consumers.
3. Puma
Puma is popular for its stylish and performance-oriented footwear offerings, including sneakers, running shoes, and lifestyle shoes. The brand’s presence in Indonesia is supported by a network of retail outlets and online channels.
4. Reebok
Reebok is a subsidiary of Adidas, has a presence in Indonesia with its range of athletic footwear and apparel. The brand caters to fitness enthusiasts and urban consumers seeking both performance and style.
5. Skechers
Skechers is known for its comfortable and fashion-forward footwear collections, including casual shoes, athletic sneakers, and lifestyle footwear. The brand has expanded its presence in Indonesia through partnerships with local retailers and distributors.
6. Converse
Converse, famous for its iconic Chuck Taylor All Star sneakers, is a popular choice among Indonesian consumers, especially the younger demographic. The brand’s classic designs and versatile styles have enduring appeal in the Indonesian market.
7. New Balance
New Balance offers a range of athletic footwear known for its comfort, durability, and performance features. The brand’s presence in Indonesia is supported by collaborations with local retailers and sponsorship of sports events.
These international footwear brands leverage various marketing strategies, including celebrity endorsements, sponsorships, and digital campaigns, to connect with Indonesian consumers and maintain a competitive edge in the market.
Opportunities for Growth
Despite the challenges, there are promising opportunities for growth within the Indonesian footwear market. One such opportunity lies in leveraging digital platforms and e-commerce channels to reach a broader customer base. With the increasing popularity of online shopping, footwear brands can expand their reach beyond traditional brick-and-mortar stores.
Additionally, there’s potential for innovation and product differentiation through collaborations with local artisans and designers. By incorporating traditional Indonesian craftsmanship and cultural elements into their designs, footwear brands can create unique and culturally resonant products that appeal to both domestic and international consumers.
Moreover, Indonesia’s large and youthful population presents a significant opportunity for market expansion. Catering to the preferences and lifestyles of the youth demographic, who are key drivers of footwear trends, can unlock new avenues for growth and profitability.
Start Exploring Your Market Entry in Indonesia with AsiaCommerce
AsiaCommerce is a procurement company that provides several services such as comprehensive market research, arranging partnerships in local industry, and creating sales programs based on market research.
Our Market Insight Research, Business Partnership Engagement, and Business Registration and Establishment services can help you expand and develop your business, register and establish your products and company.
Our strategy consulting services domain focuses on supporting private sector clients with comprehensive and specialized development regarding the company’s needs and also on the public sector for a broader scope.
If you’re interested in exploring market opportunities in Indonesia, visit our service page for more information. Our team will work with you every step of the way, from finding a supplier, shipping door-to-door, and handling import documents to ensure your market entry to Indonesia.
by Aviccena Izzul | Mar 5, 2024 | Market Entry
Indonesia, a land of diverse cultures and rich natural resources, boasts a burgeoning fragrance industry that is both steeped in tradition and poised for modern innovation. In recent years, this sector has witnessed remarkable growth, driven by changing consumer preferences, increasing disposable income, and a growing awareness of personal grooming and hygiene. In this article, we delve into the potential market of the Indonesian fragrance industry, examining key trends, challenges, and opportunities.
Market Overview
The Indonesian fragrance market encompasses a wide range of products, including perfumes, body sprays, deodorants, and aromatic oils. Historically, fragrances have played a significant role in Indonesian culture, with traditional perfumes like “attar” and “minyak wangi” being used for various purposes, from religious ceremonies to daily adornment. Today, the market has evolved to include international brands alongside local players, catering to diverse consumer preferences.
Key Trends
Shift towards Premium Fragrances: As disposable incomes rise, Indonesian consumers are increasingly gravitating towards premium and luxury fragrances. International brands like Chanel, Dior, and Gucci have gained traction in urban centers, appealing to a growing segment of affluent consumers who seek exclusivity and sophistication.
Demand for Natural and Halal Products: With a growing emphasis on health and wellness, there is a rising demand for natural and halal-certified fragrances in Indonesia. Local brands are capitalizing on this trend by incorporating traditional ingredients like jasmine, patchouli, and sandalwood into their formulations, appealing to eco-conscious and religiously observant consumers alike.
E-commerce and Digital Marketing: The advent of e-commerce platforms and social media has transformed the way fragrances are marketed and sold in Indonesia. Online retailers offer convenience and accessibility, while digital marketing campaigns leverage influencer endorsements and immersive storytelling to engage consumers and drive sales.
Challenges
Regulatory Hurdles: Despite the lucrative opportunities, the Indonesian fragrance industry faces regulatory challenges, particularly concerning product registration and certification. Strict regulations governing the use of certain ingredients and labeling requirements can pose barriers to entry for both domestic and foreign manufacturers.
Counterfeit Products: The proliferation of counterfeit fragrances remains a pervasive issue in the Indonesian market, undermining consumer trust and brand reputation. To combat this threat, industry stakeholders must invest in robust anti-counterfeiting measures and consumer education campaigns.
Opportunities
Rural Market Penetration: While urban centers remain the primary battleground for fragrance brands, there is untapped potential in rural and semi-urban areas. By tailoring products and marketing strategies to the unique preferences and purchasing power of rural consumers, companies can expand their market reach and foster brand loyalty.
Product Innovation: Innovation is key to staying competitive in the dynamic fragrance market. Companies can differentiate themselves by introducing novel formulations, packaging designs, and scent profiles that resonate with evolving consumer tastes and lifestyle trends.
Export Potential: Indonesia’s rich biodiversity and cultural heritage present ample opportunities for exporting fragrances to international markets. By leveraging the country’s reputation for exotic ingredients and traditional craftsmanship, local brands can carve out a niche in the global fragrance landscape and contribute to economic growth.
In conclusion, the Indonesian fragrance industry holds immense promise for growth and innovation, driven by changing consumer preferences, technological advancements, and a burgeoning middle class. By navigating regulatory challenges, embracing digitalization, and fostering a culture of creativity and sustainability, industry players can unlock the full potential of this dynamic market and leave an indelible scent on the world stage.
International Brands Who Have Successfully Penetrated the Indonesian Market
The Indonesian fragrance market, characterized by its diverse consumer base and evolving preferences, has become an attractive destination for international fragrance brands seeking to expand their global footprint. Here are some notable examples of international brands that have successfully penetrated the Indonesian market:
1. Chanel
Chanel, renowned for its timeless elegance and iconic fragrances, has established a strong presence in Indonesia. The brand’s perfumes, including the classic Chanel No. 5 and the modern Coco Mademoiselle, resonate with Indonesian consumers who appreciate luxury and sophistication. Chanel’s strategic marketing initiatives, coupled with its exclusive distribution channels in upscale shopping malls and department stores, have contributed to its success in the Indonesian market.
2. Dior
Dior, another French luxury brand, has captivated Indonesian consumers with its range of fragrances that embody femininity, glamour, and allure. Dior’s best-selling perfumes such as J’adore and Miss Dior have garnered a loyal following among Indonesian women, who are drawn to the brand’s exquisite craftsmanship and innovative scent compositions. Dior’s collaborations with Indonesian celebrities and influencers have further bolstered its brand visibility and appeal in the local market.
3. Gucci
Gucci, an Italian fashion house renowned for its bold and eclectic style, has made significant inroads into the Indonesian fragrance market. Gucci’s fragrances, characterized by their distinctive packaging and evocative scent profiles, resonate with Indonesian millennials and urban trendsetters seeking self-expression and individuality. The brand’s marketing campaigns, which blend high fashion with pop culture references, have struck a chord with Indonesian consumers, driving demand for Gucci perfumes such as Guilty and Bloom.
4. Lancôme
Lancôme, a leading French beauty brand, has captured the hearts of Indonesian consumers with its luxurious skincare, makeup, and fragrance offerings. Lancôme’s fragrances, renowned for their sophistication and femininity, appeal to Indonesian women of all ages who aspire to timeless beauty and elegance. The brand’s flagship perfume, La Vie Est Belle, has enjoyed widespread popularity in Indonesia, thanks to its captivating scent and empowering message of joy and optimism.
5. Hugo Boss
Hugo Boss, a German fashion house synonymous with modern luxury and understated sophistication, has found success in the Indonesian fragrance market. Hugo Boss’s range of fragrances for men and women, including Boss Bottled and Boss Femme, resonates with Indonesian consumers who appreciate quality craftsmanship and contemporary design. The brand’s targeted marketing campaigns and strategic partnerships with Indonesian retailers have helped solidify its position as a leading player in the local fragrance industry.
In conclusion, these international fragrance brands have demonstrated their ability to navigate the intricacies of the Indonesian market and resonate with discerning consumers seeking quality, innovation, and prestige. By leveraging their brand heritage, creative marketing strategies, and commitment to product excellence, these brands have successfully established themselves as frontrunners in Indonesia’s vibrant and competitive fragrance landscape.
Easy Way to Entry the Indonesian Fragrance Industry with AsiaCommerce
AsiaCommerce is a procurement company that provides several services such as comprehensive market research, arranging partnerships in local industry, and creating sales programs based on market research.
Our Market Insight Research, Business Partnership Engagement, and Business Registration and Establishment services can help you expand and develop your business, register and establish your products and company.
Our strategy consulting services domain focuses on supporting private sector clients with comprehensive and specialized development regarding the company’s needs and also on the public sector for a broader scope.
If you’re interested in exploring market opportunities in Indonesia, visit our service page for more information. Our team will work with you every step of the way, from finding a supplier, shipping door-to-door, and handling import documents to ensure your market entry to Indonesia.
by Aviccena Izzul | Mar 2, 2024 | Market Entry
Introduction
Indonesia with its burgeoning population and growing focus on health and fitness, has witnessed a significant surge in the demand for gym equipment in recent years. This article delves into the factors driving the expansion of the gym equipment market in Indonesia and explores the opportunities and challenges within this dynamic industry.
The Rising Health Consciousness
In recent times, there has been a notable shift in the lifestyle choices of Indonesians, with an increasing emphasis on health and fitness. Factors such as rising disposable incomes, urbanization, and heightened awareness about the importance of physical well-being have contributed to this trend. As a result, more individuals are seeking ways to incorporate exercise into their daily routines, driving up the demand for gym equipment.
Market Trends and Dynamics
The gym equipment market in Indonesia is witnessing robust growth, buoyed by several key trends. One such trend is the proliferation of fitness centers and gyms across urban and semi-urban areas. These establishments are not only catering to the growing demand for fitness services but also driving the need for state-of-the-art gym equipment to enhance the workout experience.
Additionally, there is a growing preference for home gyms among affluent consumers who value convenience and privacy. This has led to an increased demand for compact, multifunctional, and aesthetically pleasing gym equipment that can be easily installed in residential spaces.
Foreign Exercise Equipment Company in Indonesia
Here is a list of exercise equipment companies that successfully expanded their business to Indonesia:
1. Nortus Fitness
Nortus Fitness is a trusted and renowned commercial fitness equipment manufacturer from Delhi. Nortus Fitness has more than 5000 clients all over the world. Despite the tough competition, this commercial fitness equipment has come a long way and become one of the trusted manufacturers of Commercial Gym Equipment in Indonesia. Nortus Fitness supplies gym equipment such as weight lifting machines, gym cardio machines, exercise bikes, hammer strength machine, stretching equipment, and full body workout machines.
2. Pro Gym Supply
Pro Gym Supply is an international gym equipment supply company based in the United States that has been in the industry for the last 20 years. The company rebuilds and re-sells commercial grade fitness equipment to commercial gyms in Indonesia. Pro Gym Supply provides cardio equipment, strength equipment, gym packages, and accessories.
3. Decathlon
Decathlon is a French sporting goods retailer company that provides complete sporting goods with affordable prices in Indonesia. Decathlon provides many sports equipment from hiking, football, running, watersports, badminton, fitness and even horse riding. Decathlon opened their first outlet in Indonesia in December 2017 and is still surviving even during the pandemic.
Challenges and Opportunities
The fitness industry is experiencing a significant increase in the Asia Pacific. This industry is strongly influenced by healthy lifestyles that are being widely applied by Asian people, especially young people. According to a report published by ApacMarket.com, the fitness equipment market in the Asia Pacific reached USD 2.4 billion by 2020, with a CAGR of 7.5% during 2015–2020. Among the different types of fitness machines, fitness equipment for cardiovascular will dominate the market during those five years.
What about the fitness market in Indonesia? According to Francis Wanandi, CEO of Gold’s Gym Indonesia, the potential of fitness centers in Indonesia is just under 1.2%. That’s much smaller than in Singapore at 8% and in Malaysia at 4.3%. Although the percentage looks small, do not forget that Indonesia has a compound population. So, in value, the fitness industry in Indonesia amounted to IDR 2–3 trillion.
However, of course, exercise equipment is not only distributed to fitness centers in Indonesia. The hospitality business has become a big consumer in the exercise equipment industry in Indonesia. Because, hotels and apartments must certainly have complete facilities for consumers, one of which is a fitness place. The number of hotel establishments in Indonesia in 2018 was 28.230. In the following year, 2019, the number of hotels in Indonesia increased to 29,243. In addition to hotels, apartments have also experienced similar increases. The number of apartments in 2018 and 2019 increased by 14%.
However, although the hospitality industry is down during the current pandemic, it does not affect the health equipment market in Indonesia. On the contrary, during a pandemic like today, many people choose to buy their equipment and make a gym in their homes. This can be seen from revenue in the exercise equipment segment in Indonesia this year reaching USD 4,035 millions in 2021. That’s an increase of 10.2% from a year ago and is expected to jump 5.44% in 2022. Therefore, the opportunity to enter the fitness equipment market in Indonesia is very large.
Future Outlook
Despite the challenges, the future outlook for the gym equipment market in Indonesia remains optimistic. With the government’s focus on promoting a healthy lifestyle and the increasing awareness about the benefits of regular exercise, the demand for gym equipment is expected to continue its upward trajectory. Moreover, advancements in technology, such as the integration of smart features and wearable devices, are likely to further drive innovation and fuel market growth.
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Our Market Insight Research, Business Partnership Engagement, and Business Registration and Establishment services can help you expand and develop your business, register and establish your products and company.
Our strategy consulting services domain focuses on supporting private sector clients with comprehensive and specialized development regarding the company’s needs and also on the public sector for a broader scope.
If you’re interested in exploring beauty and personal care opportunities in Indonesia, visit our service page for more information. Our team will work with you every step of the way, from finding a supplier, shipping door-to-door, and handling import documents to ensure your success in importing from Indonesia.
by Aviccena Izzul | Jan 29, 2024 | Market Entry
Home furniture refers to a wide range of movable objects and items that are designed to enhance the functionality, comfort, and aesthetics of residential spaces. These items are intended for use in homes and serve various purposes, from providing seating and storage to adding decorative elements to interior spaces. They encompass items like sofas, chairs, recliners, and benches. Home furniture plays a vital role in creating a comfortable and functional living environment. It serves practical purposes and contributes to the overall aesthetics and style of a home. The choice of furniture can reflect the homeowner’s personal taste and design preferences, making it an integral part of interior design and home decor.
Home Decor Market Trend in Indonesia
Indonesia’s steady economic growth has led to an increase in disposable income among its population. As a result, consumers have more purchasing power to invest in home furniture, including higher-end and designer pieces. The ongoing urbanization in Indonesia has resulted in the expansion of cities and an increase in the number of urban households. Consequently, urban dwellers are requiring furniture to furnish their homes, leading to a growing demand for home furniture.
Besides, the construction of new residential properties, including apartments, houses, and condominiums, is creating a demand for furniture to furnish these homes. This, coupled with the rise of e-commerce platforms in Indonesia has made it easier for consumers to access a wide range of home furniture products. Online shopping offers convenience and access to a variety of furniture options. Moreover, the increasing awareness of environmental sustainability has led to a demand for eco-friendly and sustainable furniture. Consumers are looking for products made from renewable materials and produced with eco-friendly practices, which is propelling the market.
Furthermore, consumers are increasingly looking for furniture that can be customized to suit their specific needs and preferences. Customized furniture allows individuals to have unique pieces that fit their homes perfectly. Additionally, government policies and incentives related to the furniture and manufacturing industry are impacting the market. Supportive regulations or initiatives boost local production and exports, thus augmenting the market growth in Indonesia.
Home Decor Market Segmentation
Indonesia has a home decoration market segmentation, including :
By Type
Based on type, the category A fit-out segment leads the South-East Asia interior fit-out furniture market, commanding an impressive 60.8% market share. This is attributed to its prominent role in setting up basic infrastructure for commercial spaces. As the backbone of the interior fit-out market, Category A encompasses all essential installations necessary for functional office operations, including floorings, ceilings, and fundamental partitioning. The strong performance of this segment is indicative of the booming commercial real estate sector in South-East Asia, where rapid urban development and economic growth have spurred a surge in demand for office fit-outs.
With urbanization trends showing no signs of abating and the corporate sector in countries like Malaysia and Thailand continuing to expand, the need for such foundational fit-out services is expected to grow. This segment's prominence is further solidified by CAGR of 5.15%, the highest growth rate in the market, signaling a sustained upward trajectory through 2031. The growth is propelled by an influx of foreign investments and a burgeoning number of start-ups requiring quick-to-market office solutions, which Category A Fit-Out provides.
By Services
In terms of services segment of the South-East Asia interior fit-out furniture market, the manufacturing segment holds the majority 55.2% market share due to region’s industrial capabilities and innovation in creating customized furniture solutions. Manufacturing services are not just about producing furniture; they involve a comprehensive approach that includes design, supply, installation, and maintenance, catering to both commercial and residential projects. This segment’s significant market share is indicative of the high value placed on specialized, high-quality manufacturing in South-East Asia, a region known for its craftsmanship and material diversity.
Furthermore, the segment is projected to grow at the highest CAGR of 5.28%, reflecting an aggressive expansion and an increasing preference for bespoke furniture. This growth is driven by rising standards in living and working spaces, the demand for ergonomic and sustainable products, and the integration of smart technology into furniture design. The high CAGR also points to the potential for South-East Asian manufacturers to scale up operations and penetrate new markets, leveraging their expertise in creating furniture that meets specific climatic, cultural, and functional requirements unique to the region.
By Application
By application, the commercial application segment of the South-East Asia interior fit-out furniture market is accounting for 75.1% of revenue share thanks to its critical role that fit-out furniture plays in the commercial sector, encompassing corporate offices, retail spaces, and the hospitality industry. The large market share is also attributed to the robust economic development in the region, where there is a continuous rise in the construction of commercial buildings and facilities, especially across Malaysia and Thailand. This segmen’s growth is underpinned by the increasing urbanization and the shift towards more sophisticated commercial environments that require high- quality, functional, and aesthetically pleasing furniture.
Looking ahead, the commercial segment of the South East Asia interior fit-out furniture market is projected to expand at a CAGR of 4.86%, signaling a continued investment in commercial infrastructure. The growth is further facilitated by the resurgence of the tourism industry post-pandemic and the consequent need for furnishing new hotels, restaurants, and entertainment venues, all of which demand the latest in fit-out furniture to attract and retain customers.
By Model
In the model category, the B2B segment has captured more than 55% market share of the South-East Asia interior fit-out furniture market. This significant market share is indicative of the intense focus on serving the business sector, with companies being the primary consumers. The prominence of the B2B model is reflective of a market where commercial dealings between businesses are paramount, and the demand for fit-out furniture is directly tied to the commercial growth and expansion of the region. The B2B segment’s success is rooted in the understanding of corporate needs and the delivery of comprehensive fit-out solutions that align with business objectives.
With a forecasted CAGR of 4.69%, the highest among the models, the B2C sector is set to experience the fastest growth. This is likely fueled by the continuous evolution of workplace environments, the increasing number of multinational corporations setting up regional hubs, and the growth of local businesses in the South-East Asian market. The B2C model’s adaptability to the needs of diverse business operations, from startups to established corporations, further contributes to its dynamic growth potential.
Home Decor Top Selling Product in Indonesia
Growing Urbanization is Driving the Market
The market is expected to grow from the rising demand for high-quality furnishings to suit the preferences and values of consumers. The home decor furniture market is increasingly from the advent of furniture that promises to enhance comfort substantially. The overall demand is increasingly fuelled by the rise in urbanization across the country. Pieces of multi-purpose furniture such as sofa cum beds, hydraulic beds, foldable tables, and beds with storage are gaining massive popularity among homebuyers who want to make optimal use of living spaces. This is a crucial trend among urban buyers, which is expected to fuel the expansion of the home furniture market. Nowadays, theme-based home decor and regular renovation of homes is an ongoing trend followed by consumers belonging to middle and upper-middle-class populations of urban cities. These classes of the urban population look beyond the basic functionality of furniture and, thus, may look for additional attributes such as style and comfort.
Bedroom Furniture Segment
Bedroom furniture consists of relaxing beds integrated with coordinating bedside tables, drawers, and wardrobes for a serene sanctuary that meets all the requirements of end-users. Increasing per capita income of consumers and the adoption of newer lifestyle trends have revamped traditional households into modern luxury residential dwellings. Increasing inclination towards light, stylish, and comfortable walk-in closet designs or free-standing wardrobes has resulted in an important element of creating modern bedroom interiors. A high preference for space-saving fixtures is drawing more attention towards closet drawers, which are replacing bedroom dressers, thereby leaving more space in the bedroom. This scenario is likely to propel the demand for wardrobes and storage furniture over the forecast period.
Products Insights
There are some home decor product is most sale in Indonesia
- Living-Room and Dining-Room Furniture
- Bedroom Furniture
- Kitchen Furniture
- Lamps and Lighting Furniture
- Plastic and Others
Top Companies in the Southeast Asia Home Decor Market
- ATC craft
- PT. Chitose Internasional Tbk
- Decoy Plant Co., Ltd.
- East Coast Furnitech Public Company Limited (ECF)
- Global House Public Company Limited. (Thailand)
- Hin Lim Furniture Manufacturer Sdn. Bhd
- Inter IKEA Systems B.V.
- PT Integra Indocabinet Tbk
- Kaiser 1 Furniture Industry (Vietnam) Co., Ltd.
- KOKUYO CO., LTD.
- Lio Collection
- Minh Duong Furniture Corp
- Phu Tai Joint Stock Company Pottery Barn
- VIVERE Group
- VS FURNITURE
- Waltco International, Inc.
- West Elm
- And Other Top Companies
AsiaCommerce Ready to Help Your Market Entry in Indonesia
Are you looking for local distribution partner to entry Indonesia home decor market? AsiaCommerce provides several services such as comprehensive market research, arranging partnerships in local industry, and creating sales programs based on market research.
Our Market Insight Research, Business Partnership Engagement, and Business Registration and Establishment services can help you expand and develop your business, register and establish your products and company.
Our strategy consulting services domain focuses on supporting private sector clients with comprehensive and specialized development regarding the company’s needs and also on the public sector for a broader scope.
If you’re interested in exploring beauty and personal care opportunities in Indonesia, visit our service page for more information. Our team will work with you every step of the way, from finding a supplier, shipping door-to-door, and handling import documents to ensure your success in importing from Indonesia.
by Aviccena Izzul | Jan 15, 2024 | Market Entry
Indonesia’s skincare industry is a rapidly growing market, with revenue reaching $2.05 billion in 2022 according to Statistika. The National Drug and Food Monitoring Agency (BPOM) reports that the number of players in the beauty industry increased by 20.6% from 819 in 2021 to 913 in 2022, with 83% of these companies being micro, small, and medium-sized enterprises (MSMEs). For global beauty and personal care, this is a good opportunity to expand their brand in Indonesia.
Indonesia Market Potential
The beauty and personal care product market in Indonesia is a large and growing market that every global beauty and personal care company should consider. Revenues are projected to reach $7.5 billion in 2021 and grow at a 6.5% compound annual growth rate through 2025, according to Statista. In terms of market segments, personal care is the largest with $3.2 billion, followed by skin care ($2.1 billion), cosmetics ($1.7 billion), and fragrances ($0.4 billion).
Trends in beauty industry have also been boosted by the increasing popularity of South Korean beauty products, or K-beauty, in the market. In 2020, Indonesia ranked second among the countries with the highest K-beauty popularity. Besides, around US$ 38.5 million worth of beauty and skincare preparation imports in Indonesia were from South Korea, accounting for the second largest import value in that segment that year.
However, local brand Wardah – the pioneer of halal cosmetics and skincare products in Indonesia – recorded the highest sales among other leading cosmetic brands in Indonesian online stores, with 7.37 million items sold as of January 2020. Data from the Statistics Indonesia (BPS) reported that the cosmetics industry, which encloses the pharmaceutical, chemical and traditional medicine industries, grew by 9.61% in 2021.
Additionally, the Food and Drug Monitoring Agency (BPOM) also recorded an increase in the number of cosmetic companies by 20.6%. From 2021 to July 2022, the number of cosmetic industry players increased from 819 to 913, 83% of them are small- and medium-enterprises (SMEs).
Local Brands Lead the Market
Local brands and Indonesian-made companies dominate the market, with a low barrier to entry as many of these companies source ingredients locally and manufacture products in the country. Brands such as Somethinc, Avoskin, and Dear Me Beauty release new products every 3 to 6 months, ranging from simple products like lip gloss to new variants of existing products. These local brands excel in turning over new products, as they can launch a product from ideation to market release within the same time frame it would take international corporations to do research and development alone.
Price-Sensitive Consumers
Indonesian consumers are highly price-sensitive when it comes to skincare products. Local skincare brands are affordable, with regular products costing Rp. 80,000 to Rp. 150,000, and anti-aging or hyperpigmentation products costing up to Rp. 250,000. Pricing is a crucial factor, as the majority of skincare consumers are women and also purchase cosmetics and other personal care products as additional. Women in Indonesia especially those in the smaller city also have lower incomes than Men and those who are stay home mothers rely on their husband’s incomes.
Target Market: Women of All Ages
The target market for Indonesia’s skincare industry is primarily female, encompassing Gen X, Millennials, and Gen Z. Gen X tends to purchase from established local brands like Wardah or international companies like L’Oreal, while Millennials and Gen Z are more adventurous and willing to try new brands. Millennials are heavily influenced by products with large user bases and strong promotional campaigns. Brands like MS Glow and Scarlett have gained popularity with Millennials during the pandemic, with MS Glow leading the market with a share of 8.2% in the first quarter of 2022 compared to Somethinc. Their low prices, wide variety of products, and local distribution make them appealing, but their reseller program is the main differentiator, allowing women in smaller cities to earn extra income by becoming distributors.
Overcoming the Challenges of High-Growth Markets in the Indonesian Beauty and Personal Care Industry
The Indonesian skincare industry is thriving with competition as new players enter the market and established local brands increase their ad spending. With so many options, reaching the right customer and differentiating from the competition is becoming increasingly difficult. The problem with competing in a high-growth market:
1. Competitive Advantages May Not be Enough
Many skincare brands think they have a competitive advantage, but when their products are released to the market, they may find that customers are not as interested as they had hoped. The race to the bottom on price, free delivery, and bombarding customers with sponsored content is not a strategy that is exclusive to one brand.
2. Lack of Distinct Differentiation
Customers have a multitude of brands to choose from that all offer similar products. They often choose based on which brand has the best deal at that moment, not on a strong enough proposition to choose a particular brand. Differentiation is not widely distinct and customers are starting to feel that all the products are the same. Brands need to offer a proposition that addresses their customers’ pain points and makes them care enough to purchase the product.
3. Consumer Overload with Advertisements
As more players enter the market, ad spending is increasing, and established local brands are flooding the market with new products. Reaching the right customer is becoming increasingly difficult as they are bombarded with numerous value propositions. Bigger brands have an advantage with heavy placement on e-commerce sites and social media platforms, but even if customers purchase from these brands, it remains to be seen if they will repurchase after the product runs out.
Key Strategies to Develop Competitive Positioning in Indonesia Market
To reach sustainable growth in the Indonesian skincare industry, brands need to up their game in offering value to customers. This means finding unique ways to differentiate themselves and address their customers’ pain points to make their proposition worth the customer’s effort to purchase. This is key strategies to develop competitive positioning :
1. Utilizing Insights from Consumer and Competitor
The success of any business in a rapidly growing market depends on its ability to understand the needs and preferences of its target consumers. By conducting thorough research and analysis of both the market conditions and your competitors, you can identify opportunities to develop a unique and valuable competitive advantage and by making sure that this advantage is difficult for your competitors to replicate, you can position yourself for success in a rapidly growing market.
2. Deriving Competitive Advantages from Unmet Needs and Pain Points
To gain a competitive edge in a high-growth market, you must understand what your consumers want and need. This can be achieved through research, surveys, and other forms of customer feedback. Use this information to identify gaps in the market, as well as any shortcomings in your competitors’ offerings. This will give you the insights you need to develop a unique and valuable product or service that meets the needs of your target audience.
3. Creating Distinct and Un-replicable Competitive Advantages
Your competitive advantage should not be something that can easily be replicated by your competitors. It should be a combination of unique company capabilities, customer insights, and market conditions. When developed correctly, your competitive advantage should be so distinct that it is difficult for your competitors to duplicate. This gives you a significant advantage in the market, as your competitors are likely to stay in their lane and not try to compete with you.
Find Your Local Distribution Partner in Indonesia
Global beauty and personal care companies can take this opportunity to step into the breach — partnerships with local companies, including joint ventures and private equity investment, can help the Indonesian fashion industry raise its game while affording foreign investors the chance to participate in the leading clothing and fashion markets, both for production and sales.
AsiaCommerce provides several services such as comprehensive market research, arranging partnerships in local industry, and creating sales programs based on market research.
Our Market Insight Research, Business Partnership Engagement, and Business Registration and Establishment services can help you expand and develop your business, register and establish your products and company.
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If you’re interested in exploring beauty and personal care opportunities in Indonesia, visit our service page for more information. Our team will work with you every step of the way, from finding a supplier, shipping door-to-door, and handling import documents to ensure your success in importing from Indonesia.
