Compared to Japan, the cost of living in Indonesia is lower, so one might not expect expensive high-end brands to be popular. However, visiting large shopping malls in urban areas such as Jakarta reveals a different picture, where multiple high-end brand stores are lined up.

Which income groups in Indonesia favor high-end brands, and in what types of stores are such products sold? This article summarizes the situation of high-end brands in Indonesia.

In addition to popular brands and retail locations, the article also touches on the prevalent issue of counterfeit goods in Indonesia. Please read through to the end.

The Presence of the “Young Rich” Who Purchase High-End Brands

In Indonesia, a growing number of individuals have recently come into wealth at a young age by succeeding as influencers such as YouTubers and Instagrammers. These individuals, who have amassed significant wealth early in life, are referred to as the “Young Rich” and frequently post about the luxury brand items they have purchased on social media.

Indonesians are characterized by a high rate of social media usage and a tendency to trust influencer posts. Many of the brand items posted by influencers are advertisements sponsored by companies. Nevertheless, many people aspire to own high-end brands after seeing these posts.

Indeed, in Indonesia, glamorous Instagrammers who post photos with luxury brand items or at high-end restaurants and hotels are referred to as “Celebgrams,” and they are admired by a large number of social media users.

Business Opportunities Targeting the Wealthy Class

As of December 2023, the average monthly income of Indonesians was approximately IDR 3,178,000 (around JPY 30,000 or approximately USD 207 at an exchange rate of 145 JPY/USD)※, which means that those with average earnings cannot easily afford high-end brand items. However, what should be noted here is not the average Indonesian, but the growing number of wealthy and ultra-wealthy individuals.

As of 2021, the proportion of ultra-wealthy individuals※ in Indonesia accounted for 0.0005% (1,403 people) of the total population, while the wealthy※ accounted for 0.03% (82,012 people), remaining a minority. However, from 2016 to 2021, the proportion of ultra-wealthy individuals increased by 69%, and the wealthy by 50%.

Moreover, Indonesians tend to affirm and showcase their economic status and social standing by owning luxury goods. Many Indonesians are fond of brands, and Lucy Suyanto, CFO of the luxury shopping mall Plaza Indonesia—which houses numerous high-end brand shops—once remarked, “Indonesians are highly brand-conscious.”

As Indonesia continues to develop economically, the combination of increasing financial affluence and the traditionally “brand-oriented” nature of its people suggests a strong potential for growing demand for high-end brand products.

Sources:

• BADAN PUSAT STATISTIC “Rata-rata Upah/Gaji Bersih Sebulan Buruh/Karyawan/Pegawai Menurut Provinsi dan Lapangan Pekerjaan Utama, 2023”
• Knight Frank “THE WEALTH REPORT 2022｜P101. The Knight Frank Wealth Sizing Model”
• OXFORD BUSINESS GROUP “The luxury market: The ups and downs of growing demand for high-end retail”

Salaries of Managerial Employees in Jakarta

Earlier, we mentioned that the average monthly income of Indonesians is around USD 207. However, this figure represents the nationwide average. When we narrow the scope to office workers in the capital city of Jakarta, a different picture emerges.

In Jakarta, the average monthly income for office workers employed by reputable companies ranges from approximately USD 275 to USD 482. For those in managerial positions, monthly salaries typically range from USD 1,100 to USD 1,655, while executives can earn more than USD 5,170.

Source: Gaji General Manager di Jakarta

Compared to the national average monthly income of USD 207, the disparity becomes clear. When observing Indonesians shopping in Jakarta’s malls during a local site visit, these income levels are quite plausible.

Seeing is believing. For companies considering expansion into Indonesia, we strongly recommend first visiting Jakarta. Please feel free to contact PT. TRICRUISE MARKETING INDONESIA to help arrange an on-site visit.

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Company Formation in Indonesia

High-End Brands Favored by Indonesians

Next, we introduce some of the high-end brands that are particularly popular among Indonesians.

Hermes

Hermès, which began as a luxury harness workshop in Paris in 1837, is one of the most popular high-end brands in Indonesia. In Jakarta, Hermès stores can be found at the upscale Jakarta Galleria Grand Hyatt and Pacific Place Mall, a shopping center catering to upper-income consumers.

Hermès offers a wide range of items, but its bags—particularly the iconic “Birkin” crafted from premium leather—are coveted by many.

In Indonesia, the singer Syahrini, affectionately known as “Princess,” once created a buzz by posting a photo on Instagram featuring a Hermès bag worth nearly IDR 1 billion (approx. JPY 9.6 million or USD 66,200 at 145 JPY/USD).

Gucci

Gucci is a fashion brand that originated in Italy. While it initially targeted the upper class, it has gained popularity among younger generations due to its incorporation of new materials and trends.

In Indonesia, Gucci stores can be found in upscale shopping malls such as Plaza Indonesia, Plaza Senayan, and Senayan City.

Nagita Slavina, wife of top Indonesian influencer Raffi Ahmad, once drew attention by participating in a photo shoot with celebrity mothers dressed in luxurious Gucci attire.

Source: suara.com “Nagita Slavina Ajak Rekan Artis Pemotretan Pakai Koleksi Gucci, Harga Fantastis Jadi Sorotan”

Chanel

Chanel, founded in 1910 by Coco Chanel, is a luxury brand that offers a wide range of products, including bags, clothing, watches, perfumes, and cosmetics. In Indonesia, the brand is particularly known for its handbags featuring the iconic double “C” logo, which are frequently posted on social media by influencers and celebrities. The Chanel store in Jakarta is located in Plaza Indonesia.

Telfar

In addition to long-established high-end brands such as Hermès, Gucci, and Chanel, the luxury brand Telfar—founded in New York in 2005—has recently become trendy in Indonesia. Telfar is notable for its core value of embracing diversity across race, gender, and cultural backgrounds.

Telfar’s popularity in Indonesia stems not only from its unique concept but also from the strong promotional efforts by influencers on social media.

Although categorized as a luxury brand, Telfar’s price range is lower than that of traditional luxury houses. Its bags have earned the nickname “the Birkin for young people,” making the brand particularly popular among the younger generation.

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Shopping Malls Housing High-End Brand Stores

Indonesia, particularly Jakarta, is home to numerous shopping malls, and price ranges vary depending on the mall. Among them, malls that attract middle- to upper-income consumers often host many high-end brand stores.

Here, we introduce some of the shopping malls in Jakarta that house a large number of luxury brand outlets.

Plaza Indonesia

Plaza Indonesia, located adjacent to the luxury Grand Hyatt Hotel, is known as one of the most prestigious shopping malls in Jakarta. The mall is characterized by its elegant and refined interior, attentive concierge service, and a wide variety of restaurants offering international cuisines.

The mall houses numerous high-end brand stores, including Burberry, BVLGARI, Chanel, Christian Dior, Christian Louboutin, Gucci, and Hermès. Fashion shows and other events are also occasionally held.

Source: Plaza Indonesia

Senayan City

Senayan City is a high-end shopping mall located in Central Jakarta. It is situated in an area where many expatriates and wealthy Indonesians reside and features a spacious and open interior.

It is also known for housing the first Indonesian branches of several Japanese establishments, such as the premium café “Hoshinoya Coffee” and the electronics retailer “Best Denki.”

Visitors can shop for high-end brands like Chanel, Gucci, COACH, kate spade, and BALENCIAGA.

Source: Senayan City

Plaza Senayan

Plaza Senayan is a luxury shopping mall located just across the street from Senayan City. The mall includes the Japanese department store SOGO and formerly housed Kinokuniya bookstore.

From October 2023 to April 2024, Plaza Senayan hosted a pop-up store by the Japanese station building-style commercial facility Lumine, among other Japan-related events. These features make it a familiar and comfortable destination for Japanese residents living in Indonesia.

High-end brand stores in the mall include Fendi, Christian Dior, Gucci, and Louis Vuitton.

Source: Plaza Senayan

Japanese High-End Brand Buyback Specialists Expanding into Indonesia

In January 2023, Marisa Tumbuan, founder of Irresistible Bazaar—a brand bazaar organizer in Indonesia—stated, “Consumers of secondhand branded items in Indonesia tend to favor European brands such as Chanel, Hermès, and Louis Vuitton as investment assets, since these brands appreciate by an average of 103%.”

Source: CNBC Indonesia “Bukan Hermes dan LV, Tas Mewah Ini Jadi Buruan Warga RI”

As incomes continue to rise, there is increasing potential for more people to engage in the purchase and sale of high-end brands not just for fashion, but also for investment purposes. Against this backdrop, brand buyback businesses have begun entering the Indonesian market.

For instance, “ALLU,” a luxury brand buyback specialty store operated by the Japanese company Valuence Japan, has opened locations in upscale shopping malls such as Pacific Place Mall, as well as in affluent areas like Makassar in Sulawesi Island and Semarang in Central Java Island.

As of February 2024, “ALLU” had 15 stores in Indonesia, indicating successful adaptation to local needs and steady expansion in the market.

Additionally, EcoRing has also expanded into Jakarta. For more information about businesses involved in buying and selling branded goods, please refer to the relevant article. It offers the most comprehensive summary of business licenses and regulations required for companies entering the gold and precious metal purchasing industry in Indonesia.

The Prevalence of Counterfeit Goods in Indonesia’s High-End Brand Market

Compared to Japan, counterfeit high-end brand items are commonly circulated in Indonesia. Although such counterfeit products are not seen in the high-end shopping malls introduced in this article, they are frequently found in markets and malls catering to the general public.

Many Indonesians knowingly purchase counterfeit items, indicating a lower psychological barrier compared to Japanese consumers. However, some vendors intentionally mix counterfeit items with genuine ones and sell them together, making it difficult to distinguish between the two—so caution is advised.

Furthermore, counterfeit branded goods are also sold on e-commerce platforms such as Shopee and Tokopedia. Since buyers cannot inspect the goods in advance when shopping online, it is not uncommon for people to unknowingly purchase counterfeit items and face issues afterward.

Future Potential of the High-End Brand Business and Challenges in Entering the Indonesian Market

Given Indonesia’s economic growth, there is considerable potential for luxury businesses involving the sale and purchase of high-end brands. Additionally, Indonesians’ affinity for social media and their brand-oriented consumer behavior make them a favorable demographic for luxury brand businesses.

However, despite the potential of the high-end brand market in Indonesia, there are several challenges for Japanese companies aiming to expand into the country. For example, when entering as a foreign entity, Japanese companies may be required to invest substantial capital or may face restrictions regarding business scope and operations.

If you are interested in expanding into Indonesia but feel uncertain about the complexities of company establishment, please feel free to contact PT. TRICRUISE MARKETING INDONESIA. We will support your business success in Indonesia by assisting with company formation and related procedures.