Indonesia's e-commerce industry (online shopping) is expected to continue its rapid growth in the years ahead as more and more Indonesians have access to Internet amid the country's rising per capita GDP (resulting in a rapidly expanding middle class). Indonesians' purchasing power has expanded quickly and in combination with the popularity of the smartphone, people are increasingly purchasing consumer goods online. This was one of the conclusions drawn in an online business insight discussion organized by Google and Blibli.com in Jakarta.

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In 2014, about 30 to 40 foreign franchise holders (mostly from Singapore and the USA) intend to enter Indonesia as the country's franchise business expands about 20 percent per year. Levina Supit, Chairman of the Indonesian Franchising and Licensing Association (Wali), said that Indonesia's franchise business is currently dominated by the food and drinks and services sector. The new foreign market participants will focus on these two sectors as prospects are promising due to Indonesia's rapidly expanding middle class.

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According to research conducted by Citibank, Indonesians increasingly regard property as the most lucrative investment instrument, instead of cash, deposit or saving accounts. On second and third place come cash and insurance. Citibank conducts an annual survey through which the bank assesses Indonesians' ability to understand the importance of financial planning and implementing good financial discipline. The survey involves various groups based on gender, age, residency and income levels.

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Mahendra Siregar, Chairman of the Indonesia Investment Coordinating Board (BKPM) said that Japan has replaced Singapore as the largest investor in Indonesia. In 2013, Japan invested USD $4.7 billion in Southeast Asia's largest economy, particularly in the automotive sector due to the sector's promising outlook as demand for cars among Indonesia's expanding middle class grows strongly. Singapore, which was the largest investor in Indonesia between 2010 and 2012, fell to second place with USD $4.6 billion worth of investments.

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Indonesia's domestic consumption is expected to continue its steady growth in the next five to 10 years as Indonesia's rapidly expanding middle class is becoming increasingly consumptive and eager to follow the latest trends (purchasing the latest trendy products). This expanding middle class is the result of robust economic growth in Southeast Asia's largest economy. Although currently slowing, the country's annual gross domestic product growth has reached an average of almost 6 percent since 2005.

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Indonesia's Ministry of Transportation expects the number of air passengers in Indonesia to exceed 100 million in 2014, a 15 percent growth from this year's estimated 90 million air passengers. Air traffic in Southeast Asia's largest economy is growing rapidly. From 2012 to 2013, passenger numbers grew at least 19 percent (from 60 to 90 million), while the total number of flights increased from 566,000 in 2011 to 684,000 in 2012. This robust growth necessitates investments to safeguard comfort and safety in Indonesia's aviation sector.

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According to Indonesia's Ministry of Industry, the import of mobile phones can be reduced by 50 percent within the next three years because of the establishment of new mobile phones factories. It is estimated that Indonesia imports 70 million cellular phones in 2013 as demand for mobile devices is high among the rapidly expanding middle class of Southeast Asia's largest economy. Due to this middle class and size of the total population (over 240 million people), Indonesia contains a lucrative market for telecommunication devices and services.

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Indonesia continues to top the ranking of countries with the highest consumer confidence in the third quarter of 2013 although its score fell four points from the second quarter to 120. According to the Nielsen Global Survey of Consumer Confidence and Spending Intentions, consumers in Indonesia are optimistic due to the general elections in mid-2014 and growth of the country's middle class. However, as inflation surged after prices of subsidized fuels were raised in June, the score fell slightly.

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Turnover of Indonesian minimarkets has grown sharply. In 2014, the value of sales is expected to jump 13.5 percent to IDR 94 trillion (USD $8.3 billion) compared to this year's projection of IDR 82.9 trillion (USD $7.3 billion). Indonesia's large population (over 240 million) and rapidly urbanizing society gives rise to high demand for nearby shops where people can find their daily needs. In recent years, outlets of minimarkets have been mushrooming in Indonesian cities, particularly on Java. Outside the island of Java, there is still ample room for growth.

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Fitch Ratings, the global rating agency, expects slower growth in Indonesia's property sector for the next 12 months. However, for the longer term, the institution still maintains a positive outlook as Indonesia is characterized by high urbanization, a rapidly expanding middle class and low mortgage rates. Since the revival in 2011, the average selling price of Indonesia's residential properties increased by about 30 percent year-on-year, particularly in the Greater Jakarta area.

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Mitsui & Co, one of the largest trading companies in Japan, believes that Indonesia is one of the most prospective investment destinations for the middle and longer term. After Brasil and Chile, Indonesia is currently the third-largest investment market for Mitsui & Co, which is part of the Mitsui Group. The latter has stakes in various sectors including energy, food, logistics and finance. The CEO of Mitsui & Co, Masami Iijima, stated that Indonesia is lucrative due to its large and young population as well as its rapidly expanding middle class.

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The Standard Chartered Bank expects Indonesia's economy to expand 5.8 percent in 2014, followed by a 6 percentage growth in 2015 as an improving global economy has a positive effect on emerging economies, including Indonesia. The world economy is estimated to grow between 3.2 and 3.5 percent this year and expected to accelerate to 3.8 percent in 2015. David Mann, the regional Head of Research at the Standard Chartered Bank in Asia, said that Indonesia's economic performance in 2013 was negatively influenced by external factors.

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Over a decade ago, economist Jim O'Neill became famous for the introduction of the term BRIC (indicating the promising economic perspectives of Brazil, Russia, India and China). Now the BRICs have lost some of its significance, he has turned to a new acronym: MINT. These MINT countries - consisting of Mexico, Indonesia, Nigeria and Turkey - share a number of features that make them potential giant economies in the future: promising demographic structure, strategic geographical location, and commodity-rich soil.

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The central bank of Indonesia (Bank Indonesia) estimates that Indonesia's current account deficit will ease to 3.5 percent of the country's gross domestic product (GDP) by the end of 2013. Indonesia's wide current account deficit has been one of the major financial troubles this year and managed to weaken investors' confidence in Southeast Asia's largest economy. Thus, Indonesia became one of the hardest hit emerging countries after the Federal Reserve started to speculate about an ending to its quantitative easing program.

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According to a survey of the Japan Bank for International Cooperation (JBIC), 44.9 percent of respondents assessed Indonesia as the most promising investment destination for the next three years. The respondents in this survey involved 500 Japanese companies that engage in international businesses. For Indonesia it is the first time in 21 years that it forms the preferred choice of overseas investments for Japanese companies, thus replacing China. In 2013, Japan already dominates foreign direct investment in Indonesia.

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This week, a group of Dutch politicians and businessmen, led by prime minister Mark Rutte, will pay a four day visit to Indonesia. The aim of the visit is to smoothen bilateral relations and search for business opportunities between both countries. This Dutch group, which includes more than one hundred Dutch company delegates, forms the largest Dutch trade delegation that has visited Southeast Asia's biggest economy in the modern history. However, relations between the Netherlands and Indonesia are still complex today.

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General Motors Company (GM), the American multinational holding corporation that engages in the automotive industry, aims to expand its partnership with China's SAIC Motor Corp by joining hands to enhance business activities in Indonesia. Recently, speculation emerged that both companies were drifting apart. However, both camps claim that the relationship has never been better. In fact, GM China and SAIC are opening four new plants in China which will add 1 million cars (per year) to the current production capacity of 3 million vehicles.

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Forecasts for Indonesia’s gross domestic product (GDP) growth in 2013 and beyond have been revised down by all institutions, including the Indonesian government and central bank as well as international organizations such as the World Bank and the International Monetary Fund (IMF). Initially, the country’s economic growth was expected to reach around 6.5 percent in 2013. However, most institutions have downgraded forecasts for the country’s economic growth to below the 6.0 percent mark.

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Car sales in Indonesia are expected to exceed the target set by the Indonesian Automotive Industry Association (Gaikindo) in 2013. The institution originally set a target of 1.1 million sold car vehicles in 2013, which is similar to the sales result in 2012. However, in September 2013 car sales recorded a new monthly record (115,921 sold units) after consumers sped up car sales as prices will increase in October. Up to the third quarter of 2013, total car sales have increased 11.2 percent compared to the same period last year.

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In mid-September 2013, South Korean tire producer Hankook Tire, conducted the inauguration of its tire plant in Indonesia. The factory is located in Cikarang (West Java) and is the company's seventh production center in the world: two plants in Korea, three in China and one in Hungary. Annual production capacity of the two factories in Korea reached 46.1 million tires in 2013. Meanwhile, the three factories in China have an annual capacity of 30.8 million units each. In Hungary, annual capacity stands at 12.6 million tire units.

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