Indonesian Spending Less on Material Goods, More on Travel and Leisure Activities
(2/11/2018)
Asia.Nikkei.com sees Indonesian consumer spending patterns as changing evidenced by the closure of internationally branded fashion retailers across Indonesian. Among the shops that have closed their doors or are in the process of doing so are, Clarks, Gap and Debenhams.
Economists point to lower purchasing power among Indonesian consumers as measured by reduced household consumption.
A differing interpretation is offered by another group of economists who say Indonesians are spending less on clothing in favor of experiential purchases, such as travel.
This view is supported by a burst of 11.07% growth in domestic airline passengers in 2017 that equals 89.4 million passengers and a 12.43% increase in outbound overseas travel for the same period.
The Indonesian Government has eased foreign ownership rules on investment in budget hotels and restaurants while undertaking an unprecedented rate of infrastructure investment in new airports.
Chatib Basri, a former Indonesian Finance Minister see the change in spending patterns as a sign of a maturing economy, explaining: “This is a typical characteristic change from the middle class. They no longer talk about ‘needs’ but ‘wants’. Fifteen years ago affordability was the most important [factor], but now there is a shift to leisure.”
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Re-posted by Pande
