Bambang Ismoyo, Andrew Tito, Jakarta – Indonesia's electronics trade is coming under growing pressure as the rupiah weakens toward Rp 18,000 per US dollar, driving up prices and sharply slowing sales in one of Jakarta's busiest retail hubs.
At Glodok, Taman Sari in West Jakarta – long known as the city's largest electronics market – traders say business activity has dropped noticeably in recent weeks, with fewer buyers and rising prices forcing some shops to scale back inventory.
A number of stores were seen closed during a recent visit, while others reduced stock to limit losses amid uncertain market conditions. Thousands of traders in the area depend on electronics sales for their livelihoods, but many now say they are waiting for demand to recover as household purchasing power weakens.
One trader, Herman, said the decline in sales has been significant and closely tied to the rupiah's depreciation, which has pushed up costs for imported components and dollar-based transactions.
"Prices are definitely going up. Things are difficult right now. Customers are no longer focusing on buying electronics, they're prioritizing food," he said on Wednesday.
He added that consumers have become more cautious in spending as inflationary pressures build, with electronics no longer seen as a priority purchase.
"Sales have dropped very sharply. Hopefully, things will improve going forward," Herman said.
He said the downturn has been felt for nearly a month, coinciding with the rupiah's continued weakening against the US dollar, with the impact quickly transmitted to retail prices.
"It's already been about a month. The impact is immediate," he said.
Despite the slowdown, Herman said most traders have not shut down operations but are instead limiting new stock purchases to avoid excess inventory in a softening market.
Weak currency forces price adjustments
Indonesia's electronics industry is warning that sustained rupiah weakness is pushing up production costs and retail prices, with businesses increasingly passing higher import expenses on to consumers as demand shows signs of softening.
The Indonesian Electronics Commodity Entrepreneurs Association (Apkonik) said the rupiah, which has weakened to around Rp 17,600 per US dollar and recently touched Rp 17,700, is adding pressure on manufacturers that rely heavily on imported components.
"Going forward, the industry hopes exchange rate stability can be better maintained so that household purchasing power and business certainty in the electronics sector remain conducive," Apkonik chairman Deny Irawan said on Thursday.
He said the rupiah's fluctuations have increased the cost of raw materials and components, forcing companies to adjust retail prices. Products with higher import content are seeing faster price increases than those with greater local content.
Key components affected include semiconductors, integrated circuits (ICs), chipsets, display panels, sensors, lithium batteries, memory modules, and power supply units, most of which are priced in US dollars.
Apkonik said electronics prices have risen by around 5% to 15%, depending on the level of imported content, with some firms passing higher costs directly to consumers.
Deny warned that prolonged rupiah weakness could weigh on consumer purchasing power and slow sales across the sector.
He also urged the government to strengthen Indonesia's domestic electronics component industry to reduce reliance on imports and improve resilience against currency shocks.
"Momentum like this is an important reminder of the need to strengthen the domestic component industry so dependence on imports can be gradually reduced," he said.
Industry players say companies producing goods with higher imported content are more exposed to exchange-rate volatility because most procurement transactions are conducted in US dollars.