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Urbanization In Indonesia

1100 Words5 Pages

A. MNC firms can generate more sales from a larger market In 2013 Minimum wages in Indonesia were increasing, with Jakarta increased the minimum wage by 44% (Jakarta City Government). The increase in formal and government sector wages will feed through to some level to the wider labor market. A large section of the extra disposable income should result into higher FMCG sales, mainly among new middle class entrants (global business indonesia guide). Other consumer groups would find that higher earnings allow them to upgrade to premium brands. The extent of retail outlets throughout the country also increases options for FMCG sales into regions that mainly served by traditional markets all this time (global business indonesia guide). Modern supermarkets, convenience stores and pharmacies generally take in a wider product range, making global brands exist to new customers. While the Island of Java remains the center of commerce and retail, there are still plentiful potentials waiting to be unlocked across the Indonesian archipelago (global business indonesia guide). Urbanization tends to drive new lifestyles that will create demand for products that consumers may have considered non-essential before. This is a trend that is floating the sales of personal care products from women’s to men’s skincare …show more content…

Whether it is hard infrastructure such as railways, airports and power supply or soft infrastructure such as social welfare, education and health care, Indonesia appears to have a hard time pushing for efficient development. In the most recent edition of the World Economic Forum global competitiveness index (GCI, 2013-2014), Indonesia positioned in 61st out of 148 economies regarding to the state of the country's infrastructure (global business indonesia

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