Indonesia Has Gone Footloose

Indonesia Has Gone Footloose

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Footwear investments in Indonesia in 2015 reached 19.67 trillion IDR. Some of these new factories have commenced operations in 2016 with an average installed production capacity of 10 – 15 million pairs per year and are employing up to 77,000 workers.

One of these new factories is owned by Pou Yuen Indonesia in Cianjur, West Java, which will employ 13,000 workers over the next five years. The production capacity for producing its Adidas sports shoes is 10 million pairs per year. Another new addition is a factory owned by KMK Global Sports which manufactures shoes and sandals for famous brands such as Nike, Converse, and Hunter. The factory has a production capacity of 2 million pairs every year.

Going forward, Indonesia’s domestic sportswear market will gain more importance due to the country’s middle-class consumers which are expected to double to 140 million by 2030. Some 43% of the population is below the age of 25 with an average age of 28 years old and thus offer growing potential for future sportswear sales.

The rise of e-commerce in the country may benefit sportswear manufacturers and retailers too. Many predict that e-commerce will occupy 20% market share in the retail sector over the next four years. This optimism is underpinned by the country’s huge internet and smartphone users which are the fourth-largest and third-largest in the world at 78 million and 65.2 million respectively.

In fact, the Indonesia E-commerce Association (Idea) forecasts that domestic e-commerce transactions will triple this year. For those brands seeking to enter the Indonesian market, Indonesia’s burgeoning e-commerce platforms and specialised sportswear retail outlets offer the opportunity to reach a targeted and youthful audience that is seeking brands that can deliver on functionality as well as style.