An Overview of Indonesia Fashion Industry and Their Respective Growth

The world is rapidly growing in terms of population and business and the fashion industry is being developed due to the growing population. Indonesia fashion industry has a significant growth due to the low cost labor and available resources. A significant group of people are gaining financial freedom to buy things they want to wear.

Clothing as a fundamental right, people all over the world are being able to afford new cloths all the time. And the growing desire for the new and fashionable cloths are at its pick. According to the growing need of apparel products, Indonesia is competing with other leading manufacturer in the world.

Indonesia is one of the top 10 garments manufacturer in the world and doing really well in exporting ready-made garments and textile products.

Despite the struggle, the growth of Indonesia fashion industry is remarkable. The low cost labor and available resources are facilitating the industry enormously and helping the country contributing to the country’s economy.

How big is the Indonesia fashion industry?

According to Indonesian ministry of trade, Indonesia earned a significant amount from exporting garments and textile related products. To specify, Indonesia fashion industry contributed 8.5% of the total export in 2017 and able to earn 11.8 billion dollars of foreign exchange. They do not only export T&A products, but they also import a huge amount of goods. In 2017 Indonesia imported T&A goods worth 8.9 billion dollars. So in terms of export and import they are one of the largest contributor in the world fashion industry.

The Growth

Whereas china as a global leader controls 35% of the global garments industry, Indonesia is contributing only 2% in the global fashion industry. By 2030 the country is expected to increase annual production to 6% which may earn them $75 billion dollars.

Though the labor cost is not that high but in near future they have to cope up with the rising minimum wages. As china is struggling to increase their fashion industry due to the increasing labor cost, Indonesia will also be falling into the same trouble.

What is interrupting the growth?

Their growth is as lower as they ever encountered before. The minimum cost of labor is growing but that is not the biggest problem.

The biggest problem is they have limited resources and raw materials. Due to the lack of raw materials they need to import almost all the raw materials required to grow their fashion industry. 

Apart from other raw materials Indonesia mostly rely on cotton products. Indonesia produces cotton but for the best quality cotton, they import form USA and other cotton manufacturing countries. And the import is stopping their growth.

Free Trade Deal

Indonesian manufacturers are suffering from free trade deals which is not yet approved by the government. The required growth is being delayed for the investment environment. The experts say that it would boost the production and the Indonesia fashion industry growth if they had a free trade deal and better investment environment. Without free investment it will not be possible for Indonesia to grow in their desired size in the global market.