What You Need to Know Before Exporting to or Importing from Indonesia in 2024

Economic Overview

Indonesia has shown steady growth in recent years, driven by a combination of manufacturing, agriculture, and service sectors. With a GDP of over $1.1 trillion, it is ranked as the largest economy in Southeast Asia and the 16th largest globally.

The government has focused on infrastructure improvements, economic reforms, and trade liberalization to encourage foreign investment. This has made Indonesia a hub for international traders seeking to tap into its dynamic market.

Key Industries

Oil and Gas Industry

Oil and gas contribute 27% of Indonesia’s GDP, ranking second in Asia for oil and first for natural gas. Indonesia holds a key role in the global oil and gas market.

Agriculture, Forestry, and Fisheries 

Indonesia, an agricultural leader, has 80 million hectares of arable land. Key crops include palm oil, rubber, coffee, and cocoa. It also has the world’s third-largest tropical forest.

Mining Industry 

Rich in resources, Indonesia is a major supplier of coal, nickel, iron, tin, gold, and more, making the mining sector a traditional hotspot for foreign investment.

Manufacturing 

Indonesia’s industrialization is still developing, with key sectors like textiles, electronics, wood processing, machinery, automotive, food, and beverages.

Social and Cultural Norms

1. Indonesians often shake hands when meeting, especially for business or formal settings, but a slight bow or nod is common after the first meeting or when greeting someone informally.
2. When shaking hands, many Indonesians place their right hand on their heart afterward, which signals respect.
3. For women, especially Muslim women, a handshake should only be initiated by her. Otherwise, a nod or slight bow is more appropriate.
4. Always remove shoes when entering mosques or carpeted rooms.
5. Dress conservatively at formal or religious events, and follow dress codes in sacred places.
6. Address people using their first name or initials; never touch someone’s head, as it’s highly disrespectful.

Gifts and Food Culture

1. Use the right hand to eat, and avoid touching food with the left.
2. Rice is the staple food, with fish and beef as common sides. Muslims avoid pork, and Chinese cuisine is also popular.
3. Avoid passing items with the left hand, as it is seen as impure.
4. Gift-giving is common in business settings, especially during holidays or special occasions.
5. Gifts should be presented with both hands, and it’s the thought that counts rather than the value of the gift.

Business Practices

1. Building relationship-oriented business: In Indonesia, business culture is built on personal relationships. To succeed, it’s crucial to demonstrate a genuine commitment to developing trust and long-term rapport with partners.
2. Punctuality: "Jam karet" (rubber time) reflects Indonesia's relaxed approach to punctuality. It’s common for meetings to start 30-60 minutes later than scheduled.
3. Being indirect: Indonesians often avoid direct refusals. Instead, you may hear phrases like "we’ll consider it," but follow-ups may not happen.
4. Indonesian consumers love discounts: Indonesian shoppers actively seek out promotions and discounts. After one sale ends, they quickly move on to find similar deals elsewhere.
5. Advanced social media: With over 30 million Indonesians shopping online, social media plays a central role in e-commerce, driving 60% of online sales.
6. Bank transfers: Bank transfers are the dominant payment method in Indonesia, used in 94% of online transactions.
   

Hot Products to Import from Indonesia:

• Textiles and Garments: Indonesia’s rich tradition in textile manufacturing makes it a leading exporter of clothing, fabrics, and footwear.
• Natural Resources: Palm oil, coal, and rubber are among Indonesia’s top export commodities. These resources are in high demand globally.
• Furniture and Handicrafts: Known for beautifully crafted wooden furniture and handmade goods, Indonesia offers unique and competitively priced items.
  

Hot Products to Export to Indonesia:

• Machinery and Electronics: As Indonesia’s industrial sector expands, there’s a rising demand for machinery, equipment, and electronic devices.
• Chemicals and Plastics: With the growth of manufacturing, Indonesia imports a significant amount of raw materials such as chemicals and plastics for production.
• Automotive Parts: The automotive market is booming, creating opportunities to export car parts, accessories, and related equipment.

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