Consumer goods sales are up by 10% in the first half of the year.

A report, which isn’t available online, by AC Nielsen, says that sales of consumer goods, in both modern and traditional markets, leapt by 10% on the previous six months.

AC Nielsen director Yongky Surya Susilo said:

Compared to last year’s first half, the total sales of consumer goods in the first semester rose by 10%. I estimate that by the end of 2006, we will see growth of at least 15%.

Year-on-year sales up to June 2006, which totalled 60.1 trillion rupiah, or about $6.5 billion, increased by 12 percent% from last year’s 53.8 trillion rupiah figure.

Yongky said that the 120% fuel price increase in October 2005 did have a dampening effect, especially on 2005’s total sales.

In August 2005, I was so sure sales growth would reach around 25% by the end of the year, but then came the fuel price hike in October, forcing the growth to rest at 18% by the end of the year.

According to an AC Nielson study in 15 Asian countries, Indonesia’s 18% sales growth in 2005 was the second highest after India’s 21%. In 2004, when the country saw 14% growth, Indonesia was the fastest growing in terms of consumer goods sales in Asia, as compared to India, in ninth place, with 5.5% growth.

Judging from the trend of sales in terms of volume from 51 product categories, excluding fashion goods, there are almost no decreases resulting from the fuel price hike.

Among the reasons put forward to explain the trend in Indonesia were: advertising spending of big retailers, which rises 30% annually; product innovations and the establishment of new, modern retailers.

Recently, we collected data from bankers showing the use of credit cards in the first semester increased by 20%. This proves that Indonesian people continue to consume regardless of the conditions at hand.

Another anomaly in the research, Yongky said, was the high demand for electronics products, like televisions, DVD players, cellular phones and other tech-gadgets. Clothing, in contrast, he said, was a low priority for Indonesians.

Another conclusion drawn from the research is that Indonesians tend to use all shopping channels available, both modern and traditional ones, regardless of their purchasing power. Meaning that, the haves still go to traditional markets for lower prices while the poor also go to hypermarkets for recreational purposes.

Traditional markets however still draw the largest number of visitors with an average of 25 visits a month per person, as compared to twice a month for hypermarkets and three times for supermarkets.