On The Road With RHB:
Life In The Big Durian
Life In The Big Durian
Having
lived and worked in Jakarta as an expatriate for almost three years, I am now
sharing my understanding of the city and its people. This report aims to cover
some distinctive features of Indonesia’s capital, as well as recent
developments. Other than the notorious traffic jams (which I have learnt to get
around), Jakarta has a relatively high level of customer service and
hospitality. Consumers are keen on lifestyle spending and pretty open to new
lifestyle trends. As such, I believe Jakarta is truly a land of opportunity for
businesses.
¨ Why the nickname? The city is regarded
as the New York City (ie the Big Apple) of Indonesia. Why the “durian” moniker?
I find that this is a great comparison – for it is exactly how living in this
city feels. It seems thorny and intimidating from the outside – possibly due to
the traffic jams, seemingly disorganised planning of the city, and frequent
demonstrations prior to the Jalan Thamrin boom incident. On the inside,
however, the durian fruit is tasty – Jakarta has a high level of customer
service in general, and its people are welcoming and polite. The city also has
many spots offering good artisan coffee and food, with business owners and
professionals even claiming that it is easier to make money here due to relatively
lower competition and the scarcity of talented workers respectively.
¨ Modern lifestyle is
more expensive. Based
on my observations, prices of the same products and food items are at least
15-20% higher in Jakarta compared to Kuala Lumpur and Singapore, after currency
conversion. Some attribute this to Indonesia’s previous years of high inflation
and excessive pricing by sellers. Nevertheless, the Jakarta residents
(Jakartans) whom I know, are not that price-sensitive – especially when it
comes to lifestyle products.
¨ Vibrant F&B
scene. Jakartans,
especially those who stay in the suburbs, tend to dine in malls or dining
streets while waiting for rush hour to pass. The food and beverage (F&B)
scene here is vibrant and competitive, with a few privately-held groups
dominating the industry. These are Ismaya Group, The Union Group, and Holycow!
Group, which have created original and unique restaurant chains.
¨ Full of contrasts. More often than not,
clusters of slums are found 1-2 streets behind fancy shopping malls or
skyscrapers in the city. For instance, behind Grand Plaza Indonesia, one of
Jakarta’s largest and most prestigious shopping complexes, there is Tanah
Abang, a huge slum area that also houses the city’s largest wet market.
According to my colleagues, this odd disparity is attributed to the rapid
development of office towers and shopping malls during the commodities boom 10
years ago – which also happened in tandem with developers encountering
difficulties in acquiring land from local residents.
¨ Rush hour traffic
jams have improved. Traffic jams area part of day-to-day living in Jakarta,
due to the fast-growing number of vehicles on the road. The construction of new
roads and the development of the public transportation system have not yet
caught up with vehicle growth. The Castrol Magnatec Stop-Start Index even named
Jakarta as the city with the worst traffic jams in the world last year. The
truth is, traffic here has improved, with the introduction of the “odd-even”
number plate regulation.
¨ The city revolves around macet. Macet (the
word for traffic jams), combined with the lack of a developed public
transportation system, has led to Jakarta having one of the best private
transportation systems in ASEAN. Taxis are cheap, easily available, and most
run on meters. Most taxi drivers are polite and friendly, too. It is common for
a white collar worker to hire a driver, so they can concentrate on something
else other than the road while stuck in traffic. On top of that, “ojek”
or motorcycle taxis, are also a popular means to get around traffic. To avoid macet,
one can even order products, buy groceries, and arrange for house
cleaners via online applications.
Kindly click the following link for the full report: On The Road With RHB- Life In The Big Durian
Norman Choong, CFA
Assistant Vice
President
Research Analyst – Utilities,
Oil & Gas, Poultry
PT. RHB Securities
Indonesia
