Elevated Demand for Home Upgrades A Dynamic Trend in Indonesia's Household Goods Market

Brief:

The household goods market in Indonesia is witnessing a dynamic shift as consumers prioritize home upgrades. Glass, tableware, and utensils are expected to lead with a 9.6% annual growth rate. Prolonged lockdowns have underscored the importance of comfortable living spaces, fueling consumer interest in home decorations and DIY products. Inflationary pressures prompt consumers to seek budget-friendly options. Rising real incomes make essential purchases more experiential. While living costs rise, consumer spending remains moderate. Young adults with high disposable incomes drive demand for quality household goods. Urbanization and aspirational consumer behavior further contribute to evolving market dynamics.

• Glass, tableware, and utensils are anticipated to emerge as the standout category within the household goods sector, displaying a robust annual growth rate of 9.6% over the medium term. The extended periods of home quarantine during the pandemic-induced lockdowns have underscored the significance of living spaces for Indonesian consumers. With a renewed focus on their homes, more individuals are inclined to invest in enhancing the comfort and aesthetics of their residences.

• This renewed emphasis on home life has led to a consistent and strong consumer interest in home decorations and DIY (do-it-yourself) products. As inflationary pressures persist, consumers are likely to gravitate toward more budget-friendly alternatives or prioritize accessible product ranges.

• Furthermore, as real incomes continue to rise, essential purchases are becoming not only cost-effective but also experiential for consumers. Despite the challenges posed by increasing living costs, consumer spending growth is expected to remain moderate, as individuals exercise caution in their discretionary spending habits.

• A notable shift in consumer behavior has emerged, with an increasing emphasis on affordable home upgrades taking precedence over luxury items such as designer clothing and extravagant vacations. In a country like Indonesia, boasting a population of 277.5 million in 2023, the household goods market holds significant potential.

• Notably, young adults aged 20 to 39, constituting 30.5% of the population, represent a vibrant consumer demographic with substantial disposable incomes. Given their higher spending tendencies, this age group presents an attractive market segment for quality-of-life household goods.

• Urbanization is another key factor shaping the market landscape, with 58.6% of Indonesians residing in urban areas in 2023, primarily concentrated along the coastline. By 2030, this urban population is expected to increase to 62.8%, adding 21.1 million urbanized consumers. Urban areas offer concentrated consumer bases, well-developed logistics networks, and elevated spending levels, which contribute to the growing demand for quality household goods.

• Overall, the increased interest in enhancing living spaces and the evolving consumer behavior, driven by aspirational desires, are contributing factors in shaping the evolving household goods market in Indonesia.

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