Business Expansion: Top 7 Profitable Industries to Start a Business in Indonesia

Expanding your business is a strategic move fueled by the diverse economic indicators in each nationals. Southeast Asia is one of the potential regions that boast a rapidly growing middle class with increasing disposable income, driving a surge in consumer demand.

As one of the most developing countries in Southeast Asia, Indonesia has favourable government policies and initiatives promoting foreign investment further contribute to the region’s attractiveness.

Is Indonesia a Good Place to Start a Business?

Yes, Indonesia presents a compelling landscape for entrepreneurs boasts a massive population, translating to a vast consumer market with rising purchasing power.

The Indonesian government commits to improve the ease of doing business, as evidenced by initiatives like the Online Single Submission (OSS) system, is encouraging more investments by lowering barriers to entry. Moreover, Indonesia’s strategic location in Southeast Asia makes it an attractive hub for regional trade and investment. Its abundant natural resources and growing digital economy further amplify the opportunities available for businesses across various sectors. These combined strengths make Indonesia a promising destination for those seeking to establish and grow a successful enterprise.

What Are The Top 5 Industries in Indonesia to Invest?

As one of the largest economy centres in Southeast Asia, Indonesia presents a robust growth story for foreign investors in 2024. Let’s delve into some of the key sectors where opportunities abound and the strategic government initiatives propelling their growth.

E-Commerce

E-commerce sector has experienced phenomenal growth, fueled by pre-pandemic trends and accelerated further in the post-pandemic world. Statista projections show the gross merchandise value (GMV) of local e-commerce market reaching a staggering US$160 billion by 2030, with the number of users surging to 131 million.

This digital boom translates into tangible financial gains. Global Data anticipates that e-commerce payments in Indonesia will soar by 22% annually between 2021 and 2025, reaching US$53.8 billion by 2025. Notably, Indonesians are enthusiastic adopters of social commerce, particularly on platforms like TikTok, and display a strong inclination towards sales and promotions on social media.

The increasing internet and smartphone penetration, coupled with rising disposable incomes among the young and tech-savvy population, firmly positions e-commerce as one of the most lucrative sectors for foreign investment in Indonesia.

Travel and Tourism

Indonesia has a breathtaking archipelago of over 17,000 islands, each with its unique charm, makes it a perennial favorite for international travelers. The World Travel & Tourism Council’s latest Economic Impact Report forecasts travel and tourism sector will create over 5 million jobs between 2023 and 2033, with an average annual growth rate of 10%. This presents a golden opportunity for businesses seeking to enter this flourishing industry.

Bali consistently ranks among the top destinations globally. Data from Trading Economics indicates a remarkable 30% year-on-year increase in foreign tourist arrivals in November 2023, highlighting the sector’s robust rebound.

Infrastructure and Construction

As economy in Indonesia continues its upward trajectory, the government is prioritizing infrastructure development to support sustainable growth. This presents a significant opportunity for foreign investors to contribute to the nation’s progress. Improved infrastructure not only facilitates economic activity but also enhances quality of life, making Indonesia an even more attractive destination for businesses and individuals.

The government’s increasing reliance on public-private partnerships (PPPs) signals a commitment to attracting private sector expertise and global investment. This collaborative approach is expected to accelerate infrastructure development across the archipelago.

Mining

Indonesia boasts a prominent position in the global mining industry, renowned for its reserves of coal, gold, tin, copper, and nickel, among others. Strategic government policies, such as banning raw material exports and promoting value-added processing, are aimed at boosting the sector’s contribution to the economy.

These measures create opportunities for foreign investors to participate in the sustainable development of the mining industry, fostering job creation and increasing profit margins for mining commodities.

Aviation

Indonesian aviation sector is experiencing remarkable growth, fueled by the geographical necessity of air travel in an archipelago nation. The International Air Transport Association (IATA) predicts Indonesia will become the world’s 6th largest aviation market by 2034, indicating a sustained demand for air travel and related services.

This burgeoning sector welcomes foreign investment to support the development of essential infrastructure. Expanding and modernizing airports, enhancing ground infrastructure, and improving air traffic systems are all critical areas for growth.

The dynamic market offers fertile ground for entrepreneurial ventures. Discover the most promising small business ideas, from thriving franchise opportunities to innovative digital agencies, and explore how to leverage these sectors for success in 2024 and beyond.

What Are the Best Types of Small Businesses for Entrepreneurs to Start in Indonesia?

1. Franchise Business:

Franchising offers a proven pathway to entrepreneurship, allowing you to leverage the brand recognition, operational systems, and marketing support of established companies. This model significantly reduces the risks associated with starting a business from scratch and can lead to faster market penetration. Indonesia’s growing middle class and their appetite for international brands make it a fertile ground for successful franchise ventures.

• Key benefits: Reduced risk, proven business model, brand recognition, marketing support, and training.
• Success stories: International F&B franchises like Starbucks and McDonald’s have thrived in Indonesia, demonstrating the strong demand for established brands.

2. F&B Services (Bars, Restaurants, Coffee shops):

Indonesia’s diverse culinary scene and the increasing disposable income of its population have spurred a thriving F&B industry. From trendy cafes and themed restaurants to vibrant bars and food trucks, the options are endless. Capitalize on this trend by creating a unique dining or drinking experience that caters to local tastes and preferences.

• Key benefits: High demand, potential for strong profit margins, and opportunities for creativity and innovation.

3. Creative Industries & Digital Agencies:

Indonesia’s young, tech-savvy population, coupled with the rapid growth of digital platforms, has created a fertile ground for creative and digital agencies. Businesses across various sectors are seeking creative solutions to enhance their brand presence and engage with their target audience. Whether it’s graphic design, content creation, social media marketing, or web development, the opportunities in this space are boundless.

• Key benefits: High demand, potential for high-value projects, and the ability to work with diverse clients.

4. Dropshipping Services:

Dropshipping offers a low-risk entry into the e-commerce market, eliminating the need for inventory management and upfront investment. With Indonesia’s burgeoning online shopping scene, this business model presents an attractive opportunity to tap into a vast consumer base and access a global marketplace.

• Key benefits: Low startup costs, minimal risk, and access to a global market.
• Success stories: Many Indonesian entrepreneurs have built successful dropshipping businesses, leveraging platforms like Shopify and AliExpress to reach customers worldwide.

5. Retail:

The retail sector continues to thrive in Indonesia, driven by the growing middle class and their increasing purchasing power. Whether it’s fashion, beauty, home decor, or electronics, there’s a demand for unique and quality products. Starting a retail business can be a fulfilling venture, allowing you to curate a collection that reflects your passion and resonates with your target market.

• Key benefits: Direct interaction with customers, potential for high-profit margins, and the ability to build a loyal customer base.
• Success stories: Local brands like Brodo and Skintific China have achieved remarkable success, showcasing the potential for homegrown retail ventures.

6. Travel Agency:

Indonesia’s natural beauty, rich cultural heritage, and diverse attractions make it a popular destination for tourists worldwide. Starting a travel agency can be a rewarding endeavor, allowing you to share the wonders of Indonesia with the world while building a profitable business.

• Key benefits: High demand, potential for repeat business, and the opportunity to create unique and memorable travel experiences.
• Success stories: Several travel agencies have carved a niche in the Indonesian tourism market, offering specialized tours and personalised itineraries to cater to different traveler segments.

7. Villa / House Rental:

With the steady growth of tourism in Indonesia, the demand for villa and house rentals has seen a significant rise. Travelers increasingly seek unique and personalized accommodations that offer a home-away-from-home experience. Investing in a villa or house rental business can be a lucrative venture, providing a steady stream of income and capital appreciation potential.

• Key benefits: Passive income potential, capital appreciation, and the ability to cater to a growing market segment.
• Success stories: Platforms like Airbnb and Booking.com have facilitated the growth of the villa and house rental market in Indonesia, enabling property owners to connect with travellers worldwide. Additionally, property catalogue platforms like Lets Move Group also becomes one of the essential and favourable leads to help simplifying searches for real estate in Indonesia.

Indonesia’s thriving economy and supportive business environment offer a plethora of opportunities for aspiring entrepreneurs. By carefully considering your interests, skills, and market demand, you can choose a small business venture that aligns with your goals and sets you on the path to success.

The Importance of Engaging with a Business Consulting Firm in Indonesia

Navigating the complexities of the Indonesian business landscape can be challenging for both local and foreign entrepreneurs. Discover why partnering with a reputable business consulting firm is essential for success. Either navigating company registration or ensuring legal compliance and market entry strategies, expert guidance can make all the difference.

How to Find the Best Business Consulting Firm in Jakarta and Bali

Choosing the right business consulting partner is critical for your success in Indonesia. Learn how to identify and evaluate top-tier consulting firms in Jakarta and Bali, ensuring you receive the expertise and support you need to thrive in these dynamic markets.

How to Start a Business in Indonesia in 2024

Embarking on your entrepreneurial journey in Indonesia requires careful planning and execution. This comprehensive guide walks you through the essential steps of starting a business in 2024, from company incorporation and licensing to tax compliance and hiring employees.

Company Setup / Company Formation

Discover the different types of business entities available in Indonesia and learn the step-by-step process of company registration, ensuring your business is legally established and ready to operate.

Obtaining Business Licenses

Understand the various business licenses and permits required for your specific industry and how to obtain them efficiently through the Online Single Submission (OSS) system.

Tax Registration

To establish a company in Indonesia, a Tax Identification Number is essential to make sure your business complies with Indonesian business regulation. Navigate the Indonesian tax system with confidence. Learn about the different taxes applicable to your business and how to register for a Taxpayer Identification Number (NPWP).

Getting Work Permits for Foreign Employees

If you plan to hire foreign talent, understanding the work permit process is essential. Learn about the requirements and procedures for obtaining work permits for your foreign employees.

How to Start a Small Business in Indonesia for Foreigners

Foreign entrepreneurs face unique challenges when starting a business in Indonesia. This guide provides tailored insights and advice on conducting market research, choosing the right business structure, navigating legal requirements, and more.

Embrace Profitable Business Opportunities in Indonesia with Lets Move Indonesia

Lets Move Indonesia is your trusted partner in realising your business dreams in Indonesia. With our experienced consultants and comprehensive range of services, we can guide you through every step of the journey, from company registration to visa processing and ongoing compliance.

Invest in Indonesia now and expand your business opportunities across its vast market now. Contact our professional consultants now!