1. Overview

Indonesia’s middle class is shrinking — yet that does not mean their spending power has vanished. What’s changing is how and where they spend. Premiumisation, emotional brand connection, and smaller lifestyle indulgences are emerging as key consumption trends.

2. Data & Key Trends

• According to BPS, the middle class fell from ~53.8 million in 2021 to 47.85 million in 2024.
  
• Even so, the middle class + near-middle class made up 66.35% of the population in 2024, and accounted for 81.49% of household expenditure — underscoring their central role in economic stability. Badan Pusat Statistik Indonesia
  
• However, 49% of surveyed middle-class Indonesians (from major cities) say their purchasing power has declined, attributing this mostly to rising prices of essentials (food, energy, transportation). The Jakarta Post
  
• Emotionally, 70% of middle-class consumers report feeling a “brand mood-lift” — they stay loyal to brands that uplift them emotionally rather than purely status-driven brands. Marketing-Interactive
  

3. Drivers of Consumer Shift

• Economic pressure: inflation on essentials pushes middle-class consumers to be more selective.
  
• Emotional consumption: rather than buying luxury for status, many consumers prioritize “feel-good” products — small rituals, self-care.
  
• Digital exposure: growing access to social media and e-commerce gives more exposure to premium and international brands, even outside Jakarta.
  
• Credit access: fintech (BNPL, digital credit) is enabling consumers to make premium purchases while managing cash flow.

4. Big Corporate Players Capitalizing

• Samsung and Xiaomi are offering premium smartphones with installment plans, targeting aspirational middle-class buyers. (As noted in broader consumer behavior trends.) marketresearchindonesia.com
  
• In FMCG, global and regional brands like Unilever and Nestlé are leveraging premium product lines (healthier, sustainable, gourmet variants) that appeal to emotional and quality-focused consumers.
  

5. Strategic Implications

• For Investors: Even as the “classic” middle class shrinks, the premium-tier middle class presents a resilient, profitable segment. Brands with strong emotional differentiation or quality advantages may offer attractive long-term returns.
  
• For Corporates: Companies should re-evaluate product lines (low-price vs quality), strengthen emotional brand positioning, and consider partnerships with fintech for flexible payment.
  
• For Consultants: There is growing demand for consumer strategy, premium market entry advisory, and “emotional brand” playbooks.
  

6. What Experts Are Saying

Consumer strategists point to an ongoing “emotionalisation” of brand relationships: the middle class is less aspirational in the traditional sense, but more emotionally invested in brands that represent comfort, joy, or identity.

7. Outlook

Over the next 3–5 years, brands that win will likely be those that deliver affordable emotional luxury — not ultra-luxury, but premium in a way that aligns with middle-class realities. Expect higher adoption of smaller indulgences, self-care brands, and digital-first premium plays

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