Source: The Drum
Indonesia is a land of contrasts, where simplicity coexists with complexity and technology adoption is tempered by cultural nuances. With a laid-back attitude and a strong survivalist mentality, Indonesians embody a unique combination of traits that make them both resilient and adaptable.
Indonesia’s economy has shown resilience, with a growth of 5.4% in the second quarter of 2022. Though ADB has recently projected a lower growth for 2023 and 2024 at 4.8% and 5.0%, nevertheless Indonesians show very high optimism, with the Indonesian Central Bank projecting growth in 2023 to be around 4.5-5.3%, and the ministry also forecasting 2024 growth to be between 5.3-5.7%.
It’s true that this growth is still driven by commodity trade, but Indonesia is rich not only in natural resources but also in human resources. Home to 270 million people, with a steadily growing number of the young middle class as the bedrock of the population, making it one huge market that is able to sustain itself during times of crisis and we’re not just talking about numbers but also the psyche of the people that make up the numbers.
High levels of optimism indicated by the data from CCI APAC (Consumer Confidence Index) on May 2022 shows another paradox where Indonesia’s numbers are moving up while other countries are going down. Similarly, McKinsey Indonesia’s consumer pulse report of October 2022 also indicates high optimism at 80%, with pessimism only at 2%, with Indonesia significantly standing out among other countries.
Indonesia is often high in optimism or confidence during surveys, so it is not situational for Indonesians; in fact, it is engrained deep in the culture and psyche of the people from generations before. Understand that Indonesia is located along part of the ‘Ring of Fire’ – a chain of volcanos that spread around parts of Asia and Pacific, dangerous yet rich in minerals and very fertile. This also means that Indonesians are used to living side by side with disasters and tend to see the bright side, in many cases, a survivalist at heart.
Indonesia’s domestic household consumption is extremely high; on average, it always supported more than half of Indonesia’s economy, even during the pandemic, where it remained high at 54.42%.
Interestingly it achieved a record high during the economic crisis of 1998, reaching 75.5%, where we learned that Indonesians maintain economic resilience through the help of the community. Small or medium-sized enterprises (SMEs), or UMKM in Indonesia, have been saving Indonesia; combined with the mindset of Gotong Royong and being an adaptive survivalist in hard times, Indonesians can quickly shift to entrepreneurship.
A survey by WEC in 2019 showed 35.1% of young people in Indonesia are entrepreneurs. The confidence and preference of local brands are also growing, which include SMEs and will contribute to 60.5% of the GDP in 2022. The balance of production and creation reflects the psyche that we’ve uncovered in the previous fandom study.
Being a survivalist at heart, Indonesians quickly adapt to technology, becoming a mobile-first country where the internet connection is the worst in the region. Nevertheless, Indonesia placed 10th among the largest e-commerce markets globally, and by Google is predicted to generate a revenue of US$52,930.1 million by 2023. The rise of BNPL (buy now pay later) also captures the largely untapped market of the unbanked in Indonesia.
However, it shows the gap between financial inclusivity (76.19%) & literacy (38.03%) is still very large. On one side, they have access to make commerce and consumption, and on the other end, future financial planning is still very far from their reality. Perhaps this has something to do with their outlook on life, jumping head on and hoping for the best, and just keep on swimming no matter what, because in a country of 270 million people, you’ll never swim alone, crazy yet true!
Indonesians live in a social-centric society that values collaboration and helping one another, as exemplified by the term “gotong-royong”. This spirit of mutual aid and belief in others is deeply ingrained in the culture and extends beyond just mutual benefit. The Hakuhodo Institute of Life and Living (HILL) ASEAN study of Indonesian fandom revealed that joining these communities provides not only entertainment but also vital connections for personal and economic growth. Consumption and creation are nearly equal, highlighting the importance of community for thriving and survival during times of crisis.