Losing Out to China and Vietnam: What are the Mistakes in Indonesia's Craft Industry?

JAKARTA, KOMPAS.com - The performance of exports in several national industrial sectors is beginning to show pressure. This is reflected in the release of the Industrial Confidence Index (IKI) from the Ministry of Industry (Kemenperin), which records export-oriented sectors at a level of 52.28, slowing down from the previous month’s 52.73 in March 2026. During that period, seven industrial sectors experienced contraction. One of them is the wood industry, wood products and cork excluding furniture, as well as bamboo and rattan weaving (KBLI 16). Players in the furniture and crafts industry admit that the national craft industry is still trapped in a price- and production volume-based competition pattern. The General Chairman of the Indonesian Furniture and Handicraft Industry Association, Abdul Sobur, stated that Indonesia’s strength lies in design, culture, and craftsmanship. “We can move up to the high-value market. We cannot keep playing in volume. Indonesia’s strength is in design, culture, and craftsmanship. We can move up to the high-value market,” said Sobur on Thursday (30/4/2026). The wood-based industry is seen as no longer able to rely on old strategies based on mass production at low prices. That model is becoming increasingly difficult to maintain, especially when facing countries that excel in efficiency and production scale. He emphasised that Indonesian craft products have advantages not only in terms of function but also philosophical value that can strengthen the competitiveness of the industry in the global market. Strengthening the artistic and design aspects in craft products is strategic to propel the national furniture and handicraft industry to the next level, especially amid increasingly tight global competition. Referring to data from the Central Statistics Agency, the fashion and craft subsector is a major contributor to the creative economy with export value reaching $28.4 billion or approximately Rp 476 trillion in the January-November 2025 period. According to him, this achievement needs to be continuously driven through a more integrated approach. He assessed that collaboration between artisans, artists, and designers is key so that Indonesian crafts are not only positioned as commercial products but also as representations of culture with global value. “Going forward, we need to encourage integration between artisans, artists, and designers so that Indonesian crafts can develop not only as products but also as expressions of culture recognised globally,” said Sobur.