Good news from Indonesian economy?
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| The Front face of Indonesia : Jakarta and its growth |
An early chat with my old friend made me take a side my morning coffee and thinks a lot. It's started with simple statement about how crowded the north coast road (pantura) after long weekend of Christmas holiday. He thought that it is because of so many cars In the road, the side effect of the booming of mid-class in Indonesia.
It took me a second to realize that. If I may do a little observe, oh yes now i remember the trend of my friends (on my age and below) are enthusiastically showing the picture of their new car via soc-med (read : social media). The New here is literally new and if I ranged the price is between 150- 300 million rupiahs. If I allowed to named the brand is grand Livina, Daihatsu Terios, Honda jazz, Toyota Yaris and More mature people more likely choose used car of Toyota Altis or Honda Civic.
Well, despite is paid by cash or credit, the interesting thing is the trend. If we go back to last decade, new employee (2-5 years working life) spent their money to buy used car with long life is above 5 years old. This phenomenon not only happen in capital city like Jakarta, Surabaya, but almost wide spread to secondary city like Malang, Lampung etc. Good news eh?
Well, from economics side yes it is good news, the growth trend is captured by the purchase ability of Indonesian in case here the middle class. Let say the figures, since Indonesian define as Investment grade country by Fitch, Moody's and S&P because of the economic growth against the declined trend, the decline of unemployment rate, etc had effected to more capital inflow. The growth of car ownership from 2010 is 745,390 and until November 2011 is 812,121 Rose about 8%. Based on infobanknews.com, loan for car ownership in 2011 is growth 32.1% YoY and as for September 2012, the growth of consumer loan is 22%. Bank Indonesia also admitted that the consumer loan is growth rapidly in 2011 and 2012 because the growth of middle class as the effect of our economic growth.
Let's closed our left eye for awhile for the bad effect of the vehicles growth.
While writing this, I am on flight from my home town to Jakarta. Relax,I typed using my pad with flight mode and after I take off. Luckily, I fly with number one airways in Indonesia that owned by stated owned enterprise. observing my surround, I realize there is a change in passenger type. I always be a loyal customer of this aircraft, beside I am Indonesian,and I never felt disappointed for the service. I should admit I shall pay more than usual or private airways.
But the question is how much we tolerate to pay more for the better service? Let me tell my experience, last month, my friend texted me, she asked me for an advice which flight she should choose between L**N air or *aruda Indonesia if the difference is just worth IDR 200.000 My friend is a same type of customer like me, new workers, same salary, almost same life style. As for me, I chose *aruda if it is just '200'. And she agreed with me, the disappointment of bad service isn't compensated for just 200.
At first I don't realize this trend until I open my eyes wide to see my surround. If I may recall, may be several years ago, *aruda Indonesia is flight for the businessman. It is very rare to see youngsters like me except they fly with their stabile parents. But now, *aruda Indonesia is not just for businessman that being paid by their corporate for travel expense, but also for new worker!
I remember my other friends once said that he'd rather to chose *aruda if the difference is just under 500.000 compared with other aircraft.
For this time being, I always think that the reason why we can afford to buy the *aruda ticket is because the corporate has reduced their cost so much. But by seeing how my friend chose their travel partner, I guess that's not only because the fare, but the purchase ability is much higher that several years ago.
As for the frequent flyers, us will be very much understand that we are willing to pay more not just for the pride! We are more tolerate the price than the bad service.
Interesting! That our purchase ability is much higher than before because of the better economy of our country. why the middle class is powerful to generate Indonesia right now? Well, now we step back for the cause, started from 2009 until now, big corporate is doing their mass recruitment for the new graduates. Thats the impact of better economy condition of Indonesia and reduce the unemployment number.
The mass recruitment, beside to fulfill the vacant position of their retired employees, there are also brand new positions to help corporate to expand the business. The more they expand, the more they recruit.
If we sightseeing for a while at the market, corporates are put their best efforts to grab 'new fresh market' I.e. young people that segmented into two big groups 20-24 years old, 25-35 years old. 25-35 years old market is more mature market, that they have more but they also spent less. They will spend their money for bigger thing like car, housing or doing investment like reksadana. 20-24years old is spend a lot but their source is still limited. Usually they depend on their parents,They usually love to spend their (parents) money for gadgets I.e. camera, handphone, tablets, laptop.
Though the 20-24 years market is a Greenland, the 25-35years market is still the harvest field.
We can see how corporate try to get close with them by using social media. Cited from solopos.com, estimated that in Indonesia there are 40 million people that classified as new middle class and potentially buying new vehicles.
Interesting right?
My colleague from New York stated also that for the last two years, name of Indonesia has become a "belle" among the investors. Every time he said about Indonesia, they will interesting to discuss more about the possibility of investing. Is it once again because of investment grade of Indonesia?
But once again, is our economy really grow? If we see the phenomenon of middle class, may be yes. But is it really affect to lower class? Is they feel more easy live currently than last several years? Or they still feel the same way? The ability to purchase basic needs isn't even increase? So what's the point we talk about figures if the gap between lower to upper or middle isn't get any close? Because if I may recall, our citizens is still dominated by lower (by number).
May be..I will try to look deep closer to the lower class in my next shallow observations 😄😄😄😄😄
to search what the significant different between live in several years ago compared with current condition from the lower class perceptions.
Wait for it!
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