For businesses considering market entry into Indonesia, understanding local living costs is essential. As the Indonesian economy continues its rapid development, what is daily life like for its people?

This article first outlines the key premises necessary to assess Indonesia’s cost of living, followed by a comparative analysis of expenses related to clothing, food, and housing between Indonesia and Japan.

Regional Differences in the Cost of Living Within Indonesia

Southeast Asia is often associated with a low cost of living. As a still-developing nation, many assume that prices in Indonesia remain significantly low.

Indeed, many goods and services in Indonesia are notably cheaper than in Japan. However, when discussing overall living expenses, it is important to recognize the substantial regional disparities across the country.

According to the Household Expenditure Survey conducted every five years by Indonesia’s Central Statistics Agency (BPS), the average monthly cost of living in the capital city Jakarta in 2018 was IDR 13.46 million (approximately USD 840*).

A more comprehensive 2018 survey by BPS covering 34 provinces and 56 provincial capitals and cities reported the monthly living cost in Jakarta—comprising both consumption and non-consumption expenditures—to be IDR 16.9 million (approximately USD 1,050*), making it one of the most expensive regions in the country.

In contrast, the lowest cost of living was recorded in Singaraja, a town in Bali, at IDR 6.73 million (approximately USD 420*). Even among urban areas, the difference in living costs across Indonesia can exceed a factor of 2.5.

*Source: DataIndonesia.id “Biaya Hidup di Kota-Kota Indonesia”

*Estimated at an exchange rate of IDR 16,000 = USD 1.

Household Income Disparities in Indonesia

Compared to Japan, Indonesia has significantly greater income disparity. In rural areas, it is not uncommon for households to live on as little as JPY 10,000 to 20,000 per month (approximately USD 65–130*), while in urban centers, individuals earning JPY 100,000 to 200,000 (approximately USD 650–1,300*) per month are not unusual.

Therefore, in this article, we focus on prices of goods and services typically consumed by Indonesia’s “middle class” when making comparisons with Japan.

Indonesia’s middle class is commonly divided into “upper-middle” and “lower-middle” segments. The definitions vary slightly across sources, but the classifications provided in a report by Japan’s Ministry of Economy, Trade and Industry (METI) are particularly useful.

Source: METI “Country Report on the International Deployment of Medical Services”

• Upper-middle class: USD 10,000–34,999 (approximately JPY 1.36 million–4.75 million / USD 10,000–35,000)
• Lower-middle class: USD 5,000–9,999 (approximately JPY 680,000–1.36 million / USD 5,000–10,000)

Combined, these segments account for approximately 70% of the total population. With Indonesia’s population at 270 million, the middle class would number around 190 million—surpassing the entire population of Japan.

It is also noteworthy that the “upper-middle class,” which makes up about 30% of the population, is rapidly expanding in urban areas.

Assuming annual household income of JPY 2 million to 3 million (approximately USD 13,000–20,000*), this equates to a monthly income of about JPY 200,000 (USD 1,300*)—implying dual-income households where both spouses earn around JPY 100,000 (USD 650*) each.

Given that Jakarta’s minimum wage in 2022 was about JPY 40,000 (USD 260*), a monthly income of JPY 100,000 or more typically corresponds to office workers in large corporations or professionals with a certain level of experience. Income for managers and specialists can be even higher.

* All USD conversions are approximate, based on an exchange rate of JPY 150 = USD 1.

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Price Comparison Between Japan and Indonesia: Clothing

In Indonesia, many people are highly conscious of their social class, and visible signs of financial status are often emphasized. Those with even modest wealth tend to seek larger homes and better vehicles. Naturally, clothing is also a key element of such expression.

Matahari in Indonesia

To provide a comparison, let us look at men’s apparel on the online shop of Matahari, Indonesia’s largest retail chain. Best-selling T-shirts are priced around IDR 100,000 (approximately USD 6.25*), long-sleeve shirts range from IDR 250,000 to 300,000 (USD 15.60–18.75), and long chino pants are between IDR 450,000 and 550,000 (USD 28.10–34.40).

UNIQLO in Japan

Meanwhile, Japan’s top apparel company by revenue is Fast Retailing, known for the UNIQLO brand. In Japan, the men’s UT graphic T-shirt series is priced between JPY 1,500 and 1,990 (USD 10–13.25*), long-sleeve shirts cost around JPY 2,990 (USD 20), and long chino pants range from JPY 2,990 to 3,990 (USD 20–26.60). Notably, UNIQLO’s chino pants are actually less expensive than those at Matahari.

It is also worth noting that UNIQLO is popular in Indonesia, with 49 stores operating at the time of writing. Prices at Indonesian outlets are generally higher than in Japan, positioning UNIQLO as a brand targeted toward the upper-middle class in the local market.

* Currency conversions are approximate.

Price Comparison Between Japan and Indonesia: Food

KFC

The most widespread fast-food chain in Indonesia is Kentucky Fried Chicken (KFC), with a total of 757 outlets nationwide.

For example, a set meal including fried chicken, rice, and a drink costs IDR 44,000 (approximately USD 2.75*), while a hamburger set with fries and a drink starts from IDR 58,000 (approximately USD 3.60*).

Comparatively, a set of two pieces of fried chicken at KFC costs IDR 42,000 (USD 2.60*) in Indonesia, while in Japan it is priced at JPY 490 (USD 3.25*), tax included.

McDonald’s

McDonald’s is also a popular fast-food option, with more than 200 locations across Indonesia.

A Big Mac in Indonesia is priced at IDR 37,000 (approximately USD 2.30*), compared to JPY 390 (USD 2.60*) in Japan. Since McDonald’s regular menu items are standardized globally, they serve as good benchmarks for price comparisons.

Sukiya

In Japan, the fast-food chain with the most locations is Sukiya. A regular-sized beef bowl costs JPY 400 (USD 2.65*), and a lunch set including salad, egg, and miso soup is available for JPY 500 (USD 3.30*), tax included.

This means that the most popular fast-food chains—KFC in Indonesia and Sukiya in Japan—offer meals in a similar price range.

While KFC and McDonald’s may appear cheaper in Indonesia from a price perspective alone, the comparison shifts when factoring in the large gap in minimum wage: approximately JPY 217 (USD 1.45*) per hour in Jakarta versus JPY 1,041 (USD 7.00*) in Tokyo. Despite lower menu prices, the relative affordability is significantly lower in Indonesia.

In reality, for the lower-middle class and below in Indonesia, KFC and McDonald’s are not everyday dining options. These restaurants are considered special-occasion destinations, whereas in Japan, many office workers casually visit Sukiya for a weekday lunch.

* All currency conversions approximate.

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C2 (Participation in business meetings and purchasing goods): $230
C19 (After-sales service) / C20(Installation and repair of machinery): $300
D2 (Participation in business meetings and purchasing goods (1-year validity)): $380
E23/E24/E25 (Work VISA): $1,500

Price Comparison Between Japan and Indonesia: Housing

Rent

Rental prices for apartments in Jakarta vary significantly depending on location and target demographic, ranging from IDR 1,000,000 (approximately USD 62.50*) to over IDR 30,000,000 (USD 1,875*).

Among these, apartments priced between IDR 3,000,000 and 5,000,000 (USD 190–315*) are often labeled as “affordable” and “recommended for students.”

In high-end areas, average rents are around IDR 10,000,000 (USD 625*), while in more affordable neighborhoods, they fall between IDR 5,000,000 and 7,000,000 (USD 315–440*). Although floor plans and sizes vary widely, these are typically 1K or 1DK units for single occupants, often semi-furnished.

By comparison, in Japan’s Tokyo 23 wards, average monthly rent for a 1K or 1DK apartment ranges from JPY 70,000 to 90,000 (USD 465–600*), with particularly high-end areas exceeding JPY 100,000 (USD 665*). For comparable spaces, it’s not surprising that rent in Tokyo can be twice as high as in Jakarta—Tokyo remains expensive.

Electricity and Internet

In Indonesia, electricity rates vary depending on the contracted wattage. For small households, monthly bills typically range from IDR 230,000 to 420,000 (USD 14.40–26.30*), while medium-sized households pay around IDR 670,000 (USD 41.90*). Many upper-middle-class families living near Jakarta’s central districts fall into the medium-sized household bracket.

Home internet connections average around IDR 300,000 (USD 18.75*) per month.

In Tokyo, the average household electricity bill is approximately JPY 7,892 (USD 52.60*), and home fiber internet plans typically cost around JPY 5,000 (USD 33.30*). Although internet prices appear significantly higher in Japan, the quality of service is notably better, so it is not entirely accurate to conclude that “internet is cheaper in Indonesia.”

* All currency conversions are approximate.

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Conclusion

This article has offered a partial comparison of the cost of clothing, food, and housing between Japan and Indonesia.

While some goods and services in Indonesia are indeed remarkably affordable, items consumed by the middle class and above can be comparable to—or even more expensive than—those in Japan.

For businesses considering operations in Indonesia, it is essential to clearly define the economic class of the target customer segment. Determining product quality and pricing strategies based on that definition is crucial for success in the local market.