From Indonesia★ Average Pay Raise Rate: 15%! Focus on High-End Consumer Goods

A survey conducted by NNA, which disseminates economic information on Asia, revealed that 70% of office workers in the capital Jakarta plan to purchase a car in 2014, while 50% plan to buy a house. Although concerns exist about price increases due to the weak rupiah and high interest rates, strong purchasing desire for high-priced consumer goods, backed by rising incomes, is expected to drive sales growth this year as well.

The survey was conducted in December 2013 targeting white-collar workers in Jakarta, with responses from 300 individuals. The gender ratio was nearly equal, with an average age of 33 (over 70% in their 20s and 30s) and over 60% married. The largest income bracket, accounting for just under 40%, earned between 5 million and 10 million rupiah (1 rupiah = 0.01 yen).

Regarding this year's domestic economic outlook, "same as 2013" was the most common response at 48%. However, for household consumption expenditure, 97% expected "an increase over 2013," suggesting personal consumption is likely to grow further.

The most frequently cited consumer goods planned for purchase (multiple answers allowed) were automobiles (71%). This was followed by houses (50%), mobile phones (37%), and motorcycles (14%). The average monthly income of those planning to buy a car was 8.83 million rupiah, while those planning to buy a house had an average income of 8.69 million rupiah. The proportion of those planning to buy both a car and a house was 23%, with an average monthly income of 16.34 million rupiah.

The average pay raise in 2013 was 15%, and with 30% hoping for a similar increase this year, substantial income growth appears to underpin this robust purchasing appetite. Beyond cars and houses, the proportion planning to buy branded goods was higher than for white goods, suggesting consumers who have acquired basic durable goods are now turning their attention to higher-priced items.

Regarding this situation, Samuel, an economist at Bank Central Asia, a private bank, explains, "Due to the slow development of public transportation, cars are strongly considered a necessity. Regarding houses, many people want to buy before prices rise beyond their reach, driving up demand."