Companies Will Need to Double Their Footprints to Keep Pace with Growth
The number of middle-class and affluent consumers (MACs) in Indonesia is expected to grow from 74 million to 141 million by 2020. Given Indonesia’s highly fragmented geography, it is critical for companies to understand where these consumers are. At a city level, the MAC population is rapidly becoming more dispersed. Currently, 12 cities have more than 1 million MACs, and an additional 13 have more than 500,000. By 2020, the landscape will have changed dramatically—22 cities will have more than 1 million MACs (including emerging cities such as Palembang, Makassar, Batam, Semarang, Pekanbaru, and Padang), and 32 will have more than 500,000.
The growth in the number of MAC concentrations has tremendous implications for business operations. If a company currently reaches about half of the MAC population and wants to maintain that level through 2020, it will need to roughly double its presence, targeting cities that today are considered second tier.
Companies must decide how far they want to expand their presence to reach these consumers. This strategy will force them to revisit their go-to-market strategy as well as how they structure their sales forces and organizations, and how they manage their supply chains.
To learn more about Indonesia’s MACs—what they buy, why they buy, and how to reach them—click here.