Indonesia Post-Eid Business Reboot 2025: Gen Z, Tariffs, Middle Class

Post-Eid Business Boost: What’s Next for Indonesian Brands

Have you slept well after chasing Q1 sales or paying THR bonuses? Or are you staying up reading news about Trump’s tariffs hitting Asia?

Recalibrate your business strategy post-Eid. Discover how Gen Z behaviors, US tariff risks, and middle-class shifts will reshape Indonesia’s economy through the remainder of 2025.

Facing the New Economic Reality: Layoffs & Demand Contraction

The early months of 2025 hit hard. Over 60,000 layoffs occurred across sectors—matching the total for all of 2024. Tech, textiles, manufacturing, retail, and finance all faced headwinds.

Major players like Sritex, Sanken, Shopee, and GoTo Group downsized significantly. This signals more than a cyclical blip—it points to a structural recalibration of Indonesia’s economy.

The Middle-Class Mirage: Market Growth Isn’t Guaranteed

Once the bedrock of Indonesia’s consumption economy, the middle class is shrinking. In 2019, over 60 million Indonesians were considered middle class. Today, that number has dropped to 47.9 million (World Bank, 2024).

Over 10 million people have exited this critical segment. The result? Stagnation across previously reliable categories—packaged foods, electronics, casual fashion, and home appliances.

Even legacy brands like Unilever Indonesia have suffered. Their market share dropped from 38.5% to 34.9% in just one year. Products like Lifebuoy and Sunlight were overtaken by aggressive local players like Wings and Mayora.

Tariffs and Global Risks: Local Impact of International Shocks

While domestic spending cools, global risks escalate. New U.S. tariffs, possibly reaching 32% on Southeast Asian goods, threaten Indonesia’s export-led sectors—particularly apparel, electronics, and automotive parts.

Multinationals are retreating. Giant Hypermarket exited entirely. Citi ended its consumer banking operations in Indonesia. These exits show what happens when brands lose connection with local market signals.

Indonesian Conglomerates and BUMNs: At a Strategic Crossroad

Even Indonesia’s heavyweights are struggling. Garuda Indonesia battles debt restructuring. Waskita Karya faces default and operational paralysis.

Meanwhile, brands like Matahari Department Store, now managed by Auric Digital Retail, are caught in the crossfire of changing tastes and online competition. To stay relevant, they must embrace portfolio agility, consumer-centric formats, and real-time digital engagement.

Gen Z & Millennials: The Declining Brand Generation

Young Indonesians today are hyper-digital, socially conscious, and less brand-loyal than ever.

According to Google APAC (2024):

• 70% of Gen Z actively skip ads.

• Fewer than 20% recall traditional campaigns.

• Attention spans are split between short-form content, creators, and algorithmic discovery.

Worse, they’re spending less. A Bank Indonesia study (2024) found that Millennial and Gen Z discretionary spending declined 14% year-over-year. The shift is toward:

• Essentials

• Savings

• Digital entertainment or services

  …rather than branded goods.

For legacy brands, this means the old playbook no longer works. Trust and relevance must be earned—daily.

What Businesses Must Do Now

Indonesia’s business climate from Q2–Q4 2025 demands:

• Data-driven recalibration

• Targeted innovation

• Hyper-localized engagement

Firms must act swiftly to:

• Adjust to post-Ramadan consumption cycles

• Monitor tariff implications

• Rebuild trust with digital-native segments

📌 FAQ: Indonesia Market Outlook 2025

Q: How are Gen Z spending habits changing in Indonesia?

Q: What sectors are most affected by U.S. tariffs?

Q: Which brands lost major market share in 2024?

Q: Why is the middle class shrinking in Indonesia?

Strategic Complacency: The Silent Threat

The greatest danger businesses face isn’t tariffs, economic downturns, or market contractions—it’s complacency. Many boardrooms continue to rely on pre-pandemic strategies, old market assumptions, and outdated brand portfolios.

Consider the questions:

• Is your brand strategy built around a consumer segment that's shrinking?

• Are your champion brands stagnating, their erosion hidden beneath surface-level data?

• Have you recalibrated your portfolio based not just on current performance but future-fit relevance?

Regular research might show comforting familiarity and preference—but it won't capture subtle shifts or silent decay. Real insight demands a deeper, strategic recalibration.

Bedrock ECF Framework: Navigating the Future

At Bedrock Asia, we have developed the Bedrock ECF (Equity, Credibility, Future-Fit) Framework, designed specifically for multi-brand groups, BUMN holding companies, and global firms operating in Indonesia. Our framework helps organizations:

Equity: Clarify and reinforce what your brands genuinely stand for, identifying where and why brand value erodes.

Credibility: Strengthen stakeholder belief by aligning your brand’s promises with the new market realities.

Future-Fit: Adapt proactively to evolving consumer demands and market shifts, ensuring sustainable growth.

For more than 25 years across diverse sectors and markets in Asia, this approach has consistently bridged strategic insight and practical action.

A Strategic Invitation

This isn't a moment for panic; it's a call to action. If the scenarios described here resonate—if these issues reflect the discussions you're having internally—then it's time for a strategic recalibration.

Reach out directly. Let’s discuss how your brand and business can confidently navigate this new reality—before others shape your future for you.

DM me. Let’s rethink your playbook together.

Kwan Harsono is Chief Brand Strategist at Bedrock Asia, guiding business leaders and organizations across Asia to redefine their strategic futures through clarity, agility, and the proven Bedrock ECF Framework.