Number of big spenders increases: AC Nielsen

Number of big spenders increases: AC Nielsen

Zakki P. Hakim, The Jakarta Post, Jakarta

More Indonesian consumers enjoyed a higher purchasing power this
year, spending money on various household goods despite rising
political tension during the recent seven-month-long general
election, according to AC Nielsen's latest survey released on
Wednesday.

The consulting firm said that the number of people categorized
as "A" spenders (highest category) increased to 12 million, or 15
percent of the population, compared to 12 percent last year, in
nine major cities.

"The 'A' consumers in Indonesia is four times that of
Singapore's population," said AC Nielsen Southeast Asia managing
director Farquhar Stirling at a forum attended by the company's
corporate clients.

Singapore has a total population of approximately 2.8 million.

Stirling said this group spent more than Rp 1.75 million
(about US$192) each month on various fast-moving goods such as
food items, washing and cleansing products, and fuel products,
but excluded car and house purchases.

Analysts have said that the relatively mild inflation and low
interest rate environment have improved consumers' purchasing
power, creating robust domestic consumption, which has been the
main engine of the country's economic growth during the past few
years as investment and export performances remain weak.

Higher economic growth this year, projected to reach 4.8
percent from 4.1 percent last year, also bodes well for
consumers' purchasing power.

The strong domestic consumption has allowed consumer goods
producers and retailers in the country to enjoy strong sales
growth.

AC Nielsen director of retail and business development Yongky
Surya Susilo said that retailers were now projecting double-digit
sales growth from an estimated 9 percent average growth this
year.

AC Nielsen said the percentage of "B" spenders, that spent
between Rp 1.25 million and Rp 1.75 million on household items
monthly, had also increased to 15 percent of the combined
population in the areas surveyed, from 13 percent last year.

"The 'B' spenders still represent people with a considerably
high purchasing power," Stirling said.

The survey showed that the number of people spending below Rp
800,000 per month generally decreased over the year, he said.

"Under the current environment (meager economic growth rate),
consumers are still increasing their spending. Imagine, how much
more they could spend if the government improved our gross
domestic product (GDP) per capita to the average level in the
region," he said.

Yongky said that consumers' purchasing power this year would
be affected if the new incoming government decides to increase
fuel prices later this year as suggested by lawmakers to help
reduce soaring the costly fuel subsidy spending.

He said that the government should wait until January.

"Nevertheless, Indonesians are fast in adapting with price
increase. They usually need three months at the most to adapt,
and then business as usual," said Yongky.