Businessicy – Budihardjo Iduansjah, Chairman of the Indonesian Retailers and Shopping Center Tenants Association, has noted a shift in the consumption patterns of the middle class. Retailers have had to adjust their inventory processes accordingly.
He points out a significant change where middle-class consumers are now shopping less frequently compared to before. Previously, they would purchase items in bulk for the month, but now their shopping habits have shifted to more frequent, smaller purchases. “There has been a change; middle-class people have less time now. They prefer quick, efficient shopping and don’t spent much time browsing because they are busy with work,” Budihardjo stated in Jakarta on Friday (August 30, 2024).
Currently, the middle class tends to shop during breaks from work, such as while visiting cafes, integrating their shopping with daily routines. Additionally, the global economic situation has influenced their purchasing behavior, leading to more frequent, smaller purchases rather than bulk buys.
This shift in shopping patterns has affected retail stores, with transaction amounts decreasing. Retailers have adjusted their supply chain to match these new buying habits, reducing warehouse sizes and inventory levels in response to the lower daily sales volumes.
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Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto reveal that substantial state funds are allocate to support the middle class, including extensive health insurance coverage. He noted that Indonesia’s middle class, totaling 164 million people, benefits from programs such as the Health Insurance Premium Assistance (PBI) under BPJS Kesehatan.
“Indeed, there are many government-supported programs for the middle class, particularly in health through PBI for BPJS Kesehatan,” Airlangga said during the Indonesia Retail Summit 2024 at Pantai Indah Kapuk (PIK), Jakarta, on Wednesday (August 28, 2024).
He highlighted that BPJS Kesehatan offers one of the most comprehensive health insurance coverage compared to other countries, including the U.S. “Our BPJS Kesehatan coverage is among the most complete and detailed globally. Many health features that other countries, including the U.S., do not offer are available in Indonesia,”
With such support, Airlangga emphasized that the middle class has enhanced purchasing power, as health coverage allows them to work and spend more. “This support helps the middle class maintain purchasing power. If they are healthy, they can work and spend, which is crucial,” he explained.
In addition to BPJS Kesehatan, Airlangga mentioned other forms of aid including electricity subsidies, the Family Hope Program (PKH), and energy subsidies, all of which contribute to the middle class’s financial stability and purchasing power.
“The government’s various programs, including PKH and electricity subsidies, provide a safety net to ensure that everyone can save and maintain purchasing power for the future,” he concluded.
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