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Indonesia sees vibrant franchise business amid rapid middle class growth

Xinhua, November 25, 2016 Adjust font size:

JAKARTA, Nov. 25 (Xinhua) Indonesian President Joko Widodo said on Friday that franchise industry would become a vibrant economic driver in the country with apparent growth of middle class group in the society.

"The franchise concept fits us very well and Indonesian people have long been used to entrepreneurship," President Widodo said in his remarks to open Indonesia Franchise and SME Expo held in the capital city's landmark convention hall of JCC here.

The president added that franchise business would give significant benefits to Indonesia's economy as it may help and inspire people to run their own businesses.

Southeast Asias largest economy has been seeing rapid business expansion in retail sector, including in franchise business, in the last few years.

The annual transaction growth in Indonesia's franchise business sector has been ranging from 10 to 15 percent in the last few years, expected to grow up to 20 percent next year as the nation's economy starts to recover, according to Indonesian Franchise and License Association (WALI).

Indonesia saw significant growth of its middle class society, from zero percent in 1999 to 6.5 percent of the population in 2011 or equals to 130 million ones. By 2030 the country's middle class people were estimated to reach 141 million ones, according to a report by the World Bank.

Indonesia's Trade Ministry puts the country's franchise businesses at 600 at present, with 400 of them foreign.

Transaction in franchise business was recorded at 172 trillion rupiah (about 12.6 billion U.S. Dollars) last year, according to the data released by the ministry. Endit