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.

Table of contents

    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

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