Exploring Southeast Asia: A Micro Perspective on the Indonesian Market

Amid the ongoing evolution of the global textile and apparel industry landscape, Southeast Asia’s textile and apparel market is showing tremendous growth potential. In the first half of this year, the China Sewing Machinery Association (CSMA) organized a delegation to Southeast Asia to conduct market research and exchanges. The initiative aims to deepen the engagement between Chinese textile and apparel enterprises and Southeast Asian markets, respond to the national Belt and Road Initiative, gain insights into the development trends in key markets, and understand the shifting demands for sewing equipment upgrades, ultimately helping Chinese enterprises expand their global footprint.

The Rising Role of Indonesia’s Apparel Industry

Indonesia, the largest economy in Southeast Asia, is the world's largest archipelagic nation and the fourth most populous country globally. As a founding member of ASEAN, a G20 member, and a BRICS partner, Indonesia possesses vast economic potential. Over the past decade, the country has maintained an annual GDP growth rate of over 5%, and in 2024, its GDP ranked 16th globally. According to Statistics Indonesia, the country's real GDP grew by 4.87% year-on-year in Q1 2025, driven largely by the gradual recovery of manufacturing and exports, supported by steady policy measures. The textile and apparel industry has played a significant role in this economic momentum.

Indonesia’s large population and steady consumption power create enormous domestic demand for textiles and apparel. The industry is one of Indonesia's top economic contributors and the largest employment sector, providing jobs to over 2.7 million people. According to WTO data, Indonesia’s apparel exports reached USD 8.33 billion in 2023, accounting for 1.5% of global apparel exports. From 2020 to 2023, Indonesia steadily climbed the ranks of top 10 global apparel exporters, moving from 10th to 7th place.

Indonesia’s Ministry of Investment and Downstream Industry reports that Singapore, Mainland China, and Hong Kong are the country’s top foreign investment sources in 2024. Over the past five years, Mainland China has invested USD 31.8 billion in Indonesia across 37,000 projects, with an average annual growth rate of 31%. The textile sector ranked seventh in terms of attracting Chinese investment, with a total of USD 480 million invested over the past five years.

Indonesia’s textile and apparel industry is heavily concentrated on Java Island, thanks to its relatively complete supply chain and abundant labor force. Approximately 78% of textile companies and 94% of garment manufacturers operate in West and Central Java. Most Chinese-invested textile and garment firms are located in East, Central, and West Java, with Central Java hosting industrial zones such as Wijayakusuma, Jatengland Industrial Park Sayung, Aviana Industrial Park, Bukit Semarang Baru, Tanjung Emas Export Processing Zone, and Kendal Special Economic Zone. Local sewing equipment dealers note that new factories are generally large-scale, while older factories are mainly located in Jakarta. Indonesian garment enterprises are mainly either large-scale or small-scale, with few mid-sized firms, which typically rely on contract manufacturing for bigger brands. Major garment wholesale markets are concentrated in Tanah Abang (Central Jakarta) and Bandung.

Mr. Danang, Executive Chairman of the Indonesian Textile Association (API), stated that Indonesia, as the world’s eighth-largest textile and garment exporter with over 500 textile and apparel companies, has a relatively complete industrial chain, stable quality control, and abundant labor — factors that continue to attract Chinese investment. He expressed optimism about Indonesia’s economic growth and its appeal to international investors.

Chinese Sewing Machines Lead the Indonesian Market

At INDO INTERTEX 2025, held in Jakarta earlier this year, Chinese sewing machine brands dominated the exhibition space. Leading companies such as JACK, SGSB, FUSION, HUIBAO, ZOJE, CSGC, IMB, NEWFA, YANO, GEMSY, LINGRUI, DUMA, JIA DAO, YUANYI, KOPU, Hemingway, PGM, HUIJIE, YUEMEI, SHIPENG, HONGSHENG, GUTE, LAIMENG, and others showcased a wide range of complete machines, components, pre- and post-sewing equipment, and embroidery machines. The strong presence and personal attendance by senior company representatives reflect the appeal of the Indonesian market.

Mr. Danang from API acknowledged the growing use of Chinese sewing equipment in Indonesia. Chinese machines, he noted, are known for their high quality and affordability, delivering profits comparable to Japanese and Italian machines. Over 100 API member companies visited INDO INTERTEX 2025 to explore the latest Chinese technologies, demonstrating a strong local demand for technical upgrades and efficiency improvements.

Mr. Wu Liangjie, Chairman of Shanghai FUSION Precision Machinery Technology Co., Ltd., emphasized that now is an opportune time for Chinese enterprises to explore the Indonesian market, given its large labor pool, established textile foundation, limited dependence on U.S. trade (compared to Vietnam or Cambodia), and growing demand for equipment upgrades. These favorable conditions are enhancing the appeal of Chinese sewing machines.

Leading local distributors such as OBOR, BROTHERS INDO, INDO HOSE, and PUKKA prominently showcased their Chinese partner brands. Mr. Chua Jiahe, Chairman of Indo Hose (JACK’s Indonesian agent), noted that their cooperation with JACK began in 2006. JACK's consistent innovation and strategic positioning have earned widespread recognition. The brand now boasts around 150 secondary distributors across Indonesia. In February, JACK and Indo Hose jointly established a template technology center in Salatiga, marking a key step in its Southeast Asia localization strategy and contributing to the modernization of Indonesia’s garment industry.

Industry Upgrade Ushers in New Growth for Sewing Machines

From 2023 to 2024, Indonesia’s fixed asset investment in textiles, garments, and footwear surged by 31.1%. As more international brands shift their focus to Indonesia, demand for sewing machinery will inevitably grow. Indonesia has no domestic sewing machine manufacturers and relies entirely on imports. It is currently China’s sixth-largest export market for sewing equipment. According to UN data, the share of Chinese sewing machines in Indonesia rose from 48.31% in 2017 to 60.21% in 2023. China Customs reports that in 2024, China exported USD 129 million worth of sewing equipment to Indonesia, up 31.81% year-on-year, accounting for 3.76% of total exports.

Like Malaysia, Indonesia's sewing equipment market has long been dominated by Japanese brands. Local garment factories show a clear divide: large export-oriented firms in industrial zones use advanced digital equipment, while smaller domestic-focused factories rely on traditional machines for labor-intensive products like T-shirts and jackets. Local enterprises also face growing competition from countries like Myanmar, Vietnam, and Cambodia.

Mr. Danang added that labor costs in Indonesia are rising by 3%-6% annually — a major concern for the government and industry. In 2024, average labor costs increased by 6.5%, with garment worker wages rising by 16.8%. Automation is an inevitable trend, and Chinese manufacturers have strong capabilities in digital and intelligent equipment development.

Notably, the Indonesian market no longer focuses solely on low-end Chinese products. Demand for automation is growing, and unit prices are rising. According to CSMA, over 70% of Chinese industrial sewing machines exported to Indonesia are now automated models. In 2024, the average export price for Chinese industrial sewing machines to Indonesia was USD 322.76 per unit, up 46.72% year-on-year. Pre- and post-sewing equipment averaged USD 372.50 per unit, up 16.39%. Leading brands like JACK, FUSION, SGSB, ZOJE, MAQI, HUIBAO, and BAOYU are expanding rapidly, especially in large factories.

Mr. Wu Liangjie of FUSION emphasized the growing recognition of Chinese machine quality in Indonesia. In recent years, Chinese companies have achieved notable progress in automation, digitalization, and AI, gaining global recognition. FUSION plans to deepen its R&D and apply intelligent technologies to core manufacturing processes.

PT Pan Brothers, established in 1980 and listed in the 1990s, is Indonesia’s largest garment manufacturer, serving brands like HUGO BOSS, Arc'teryx, LULULEMON, Crocodile, Adidas, Uniqlo, Nike, and MUJI. Some Chinese brands, such as CHUANTIAN, are now entering its factories. Procurement GM Ms. Wisna Chang noted that their central Java factory visits China annually for equipment upgrades. She observed significant improvements in Chinese products and hopes for high-quality, cost-effective, user-friendly machines.

Mr. Ye Mengqi, Vice President of HUIBAO Group, said Indonesia has become a key strategic market amid global shifts. With Vietnam reaching saturation and instability in Pakistan, many see Indonesia’s stability, low labor costs, and favorable China policies as attractive. Over the past three years, HUIBAO has signed deals with large factories of over 2,000–3,000 workers.

A Promising Market with Unique Challenges

Indonesia stands out in Southeast Asia due to its labor abundance, low wages, young population, rapid economic growth, robust domestic demand, expanding garment industry, political stability, and favorable policies. However, Chinese enterprises must also remain mindful of local political, regulatory, cultural, and infrastructure-related risks. For instance, Indonesia’s transport infrastructure remains underdeveloped, leading to high logistics costs and low efficiency. Power instability and limited internet coverage also hinder industrial progress. Chinese sewing machine enterprises are advised to adapt strategies to local realities and stay agile in response to opportunities and challenges.