Busiest shopping season starts in Indonesia, expenditure on clothes expected to triple during Ramadan

YOGYAKARTA, INDONESIA - 1 May 2016: Popular traditional market Malioboro in Yogyakarta / Tipwam / Shutterstock.com

Jakarta – Retailers in Indonesia anticipate the expenditure on clothes and apparel to triple during the fasting month of Ramadan, Tutum Rahanta, head of Indonesia retail employers association APRINDO and director of department store Pojok Busana, told Salaam Gateway.

Pojok Busana’s sales typically rise 300 percent for Eid, according to Rahanta. With 80 outlets across Indonesia the department store is one of the biggest in the country after leaders Matahari and Ramayana. Pojok Busana caters primarily to the lower-middle segment with prices ranging between 100,000 rupiah ($7.50) and 300,000 rupiah.

The busiest time for the store is when customers step up their Eid shopping around the middle of Ramadan. To meet this increased demand Pojok Busana starts its preparations months in advance. 

“We start to stock [for Eid] 4-5 months before Ramadan arrives, anticipating rising demand. We get everything done, including preparing sewing machines, fabric cutting and main warehouse deliveries to all our outlets,” said Rahanta.

Ramadan is a special economic season for Indonesia. Expenditure on clothing and apparel during Ramadan and for Eid is relatively small in many countries with higher GDP per capita and disposable income as customers can afford to buy clothes anytime, said Rahanta. But in Indonesia where GDP per capita still averages around $3,400 a year, demand for new clothes for Eid rises during Ramadan partially due to the normal practice of bonuses paid in advance of Eid.

Away from the department stores, prices of clothes also rise in Indonesia’s traditional markets during Ramadan. According to Ngadiran, the Secretary-General of the Association of Indonesian Market Traders, APPSI, demand for clothes and apparel during the fasting month could rise about 6 to 8 percent, while prices could go up between 10 and 12 percent.

“We have around 13,000 traditional markets and 12 million traders, and usually spending on clothes will rise during Ramadan,” said Ngadiran.

RISING PRICES

Clothing sales are always highest in Ramadan, as reflected in Indonesia’s Retail Sales Index. Food, beverages, and tobacco, and other household equipment are the two other categories that registered the biggest growth in sales during Ramadan the last two years.

With rising prices, the Indonesian government monitors inflation especially for staples during this period.

Bank Indonesia, the country’s central bank, announced that inflation in the first week of June, which coincided with the start of Ramadan, was 0.59 percent, and in line with the central bank’s target of 0.61 percent.

Central bank governor Agus Martowodojo told reporters in Jakarta on Jun 10 that skyrocketing staple food prices during Ramadan and Eid could mean serious pressure on inflation in June and July.

In the last three years, inflation during the fasting month and Eid ranged from 0.93 percent to 1.03 percent primarily due to increase of food consumption, according to data from Statistics Indonesia.

© SalaamGateway.com 2016