Business Opportunities Outside of Jakarta and Bali

The capital district of Jakarta and the paradise island Bali are in the spotlight when it comes to doing business in Indonesia. However, the world’s largest archipelago has much more to offer. In this article, we take a closer look at business opportunities outside of Jakarta and Bali. The focus is on consumer markets as we […]

The capital district of Jakarta and the paradise island Bali are in the spotlight when it comes to doing business in Indonesia. However, the world’s largest archipelago has much more to offer.

In this article, we take a closer look at business opportunities outside of Jakarta and Bali. The focus is on consumer markets as we leave the topic of natural resources for another article.

Biggest cities in Indonesia

Indonesia is the largest economy in Southeast Asia with an ample quantity of natural resources and immense potential.

Jakarta and Bali are the two most well-known destinations. However, with a population of over 250 million people, there are also many other cities with strategic locations and prospective business opportunities in Indonesia in 2017.

City

Region

Population

Jakarta

Jakarta Province

10.135 million

Surabaya

East Java

2.843 million

Bandung

West Java

2.575 million

Bekasi

West Java

2.51 million

Medan

North Sumatera

2.497 million

Semarang

Central Java

2.067 million

Tangerang

Banten

2.001 million

Depok

West Java

1.869 million

Palembang

South Sumatra

1.561 million

South Tangerang

Banten

1.436 million

Source: World Population Review, 2017

Note that those numbers only account for people living within city limits. Including the neighboring areas the populations can be several times bigger than what is mentioned in the table above. According to Worldometers, 54.6% of the population in Indonesia is living in urban areas and even more people are relocating to cities. This is an indicator of both growing number of solvent consumers as well as increasing labor pool.

For example, the population of Semarang increased by nearly 33% between 2010 and 2014.

business opportunities outside of Jakarta

GRP per capita

The regional gross domestic product nominal (GRP) indicates the economic situation most comprehensively, showing the market value of products and services produced in regions in a certain time period.

There are many areas in Indonesia contributing to the growth of the GDP with a significant number of GRP.

Rank

Region

GRP Nominal per capita in IDR 2015

GRP Nominal per capita in USD 2015

1.

DKI Jakarta

Rp.174,824,110

$14,726.99

2.

East Kalimantan

Rp.155,136,650

$13,068.54

3.

Riau

Rp.109,832,520

$9,252.17

4.

North Kalimantan

Rp.95,567,290

$8,050.09

5.

Riau Islands

Rp.95,396,450

$8,036.09

6.

West Papua

Rp.68,586,110

$5,777.62

7.

Jambi

Rp.46,004,120

$3,875.34

8.

Bangka-Belitung Islands

Rp.41,960,450

$3,534.92

9.

East Java

Rp.39,903,870

$3,361.46

10.

Papua

Rp.39,850,480

$3,356.96

11.

South Sumatera

Rp.38,834,860

$3,271.41

12.

Bali

Rp. 38,112,660

$3,210.57

Source: Wikipedia List of Indonesia Provinces by GRP per capita

Minimum salaries in Indonesia

There is no set nationwide minimum wage in Indonesia. Minimum wages are revised annually by regional wage councils and vary in different provinces and cities.

In 2017, the minimum wage in Jakarta is Rp.3,355,750 (~US$ 250). In Yogyakarta, on the other hand, it is Rp.1,337,645 (~US$ 100) and can be even lower in smaller cities. Therefore, you can cut down your labor costs significantly by setting up your business outside of Jakarta and Bali.

business opportunities outside of Jakarta and Bali

Finding educated employees in Indonesia

Generally, fresh graduates’ salaries in Jakarta are around Rp. 4 million (~US$ 295) and candidates expect a salary increase of 10-15% with each year of employment.

However, as we already pointed out, you can hire trained workforce in other Indonesia’s regions for half the cost of hiring in Jakarta.

Top universities in Indonesia

QS Top Universities brings out ten best universities in Indonesia. Nine of them are featured in the QS World University Rankings 2018 and most of them are located outside of Jakarta, providing well-educated workforce across Indonesia.

University

Location

World University 

Rank 2018

Asia University

Rank 2018

University of Indonesia

Jakarta

277

54

Bandung Institute of Technology

Bandung, West Java

331

65

Gadjah Mada University

Yogyakarta

401-410

85

Airlangga University

Surabaya, East Java

701-750

171

Bogor Agricultural Universit

Bogor, West Java

751-800

147

Sepuluh Nopember Institute of Technology

Surabaya, East Java

801-1000

232

Diponegoro University

Semarang, Central Java

240

University of Brawijaya

Malang, East Java

291-300

Muhammadiyah University of Surakarta

Surakarta, Central Java

301-350

Bina Nusantara University

Jakarta

N/A

251-260

Source: QS Top Universities

Test the Indonesian market by outsourcing

If you are in doubt whether Indonesia has enough demand for your goods or services, you can test the market before setting up a company here. Emerhub’s outsourced operations model creates excellent conditions for trying out the market prior to making any investments.

It provides services such as importer of record and employer of record in Indonesia that allow you engage in business activities and hire employees without setting up a legal entity in Indonesia.

After making sure that Indonesia is the market for your business, you can proceed to company registration with confidence and an already existing clientele.  

outsourced operations model

Closing thoughts

It is evident that Indonesia provides many great business opportunities outside of Jakarta and Bali as well.

Emerhub has over 5 years of experience and can assist you with choosing the best location for your future business as well as with your market entry strategy and company registration in Indonesia.

Contact us for a consultation via [email protected] or leave your details in the form below.
Read more: Simple Guide to Foreign-Owned Company Registration in Indonesia

Since 2011, Emerhub has helped over 500 companies of all sizes enter Southeast Asian markets.

Get in touch with Emerhub by filling in the form below to discuss how we can help your business thrive in Indonesia.