Merchants in Indonesia's bustling Tanah Abang textile market are facing significant challenges this Ramadan, as many shops have closed due to fierce competition from online commerce and a struggling economy. The market, known as the largest textile hub in Southeast Asia, had high hopes for increased sales during this sacred month, but the reality has proven quite different.
According to a report by AFP, the economic gloom has hit retailers hard, with many unable to keep their doors open. Toni Sar, a 49-year-old merchant who distributes clothing by mail across 27 provinces, expressed his frustration, stating, "There are many who are no longer strong enough. They can't take it anymore." His shop, like many others, has displayed notices of temporary closure due to unpaid rent.
Typically, Indonesians are known for spending freely during Ramadan and the subsequent Eid al-Fitr celebrations. However, this year, many merchants report that their cash registers are ringing empty, a stark contrast to previous years. Toni Sar revealed that his turnover has plummeted by 50% compared to last year, a sentiment echoed by fellow merchant Ardino Putra, 33, who has seen his sales drop by 20%, from 2.5 billion rupiah (approximately 139,000 euros) in 2025 to 2 billion rupiah this year.
Putra attributed the decline to economic factors and the growing influence of online shops. He noted, "We need to reduce the rent and charges. Our monthly expenses remain the same, but our sales are low." The situation is exacerbated by the Indonesian government’s recent economic policies, which have led to uncertainty among business owners.
Since taking office in October 2024, President Prabowo Subianto has promised to boost Indonesia's economic growth from 5% to 8%. However, the outlook remains bleak, with the central bank forced to cut interest rates in January 2025 to stimulate growth, and the rupiah weakening against foreign currencies. The government's financial commitments, such as providing free meals for schoolchildren, have raised concerns about public finances, prompting budget cuts that worry many citizens.
As traditional merchants grapple with these challenges, online commerce continues to thrive. The U.S. International Trade Administration projects that online shopping in Indonesia will surge from nearly 53 billion dollars (49 billion euros) in 2023 to 87 billion dollars (80 billion euros) by 2028. Yaya Azmi, a 22-year-old student who has come from Malaysia to source affordable Islamic clothing, exemplifies this trend. She plans to launch a live selling event on TikTok from Tanah Abang, and claims her income has increased fivefold during Ramadan due to orders placed via TikTok and Telegram.
In light of the increasing competition from e-commerce platforms, many traditional retailers, including 37-year-old Ria Angrenni, are calling on the government to impose higher taxes on online businesses. Angrenni lamented, "We face unfair competition, and in addition to our rent, we have to pay a service fee of one million rupiah (56 euros) per month." This sentiment reflects a broader frustration among brick-and-mortar merchants who feel they are being squeezed out of the market.
Despite the difficulties, some merchants remain optimistic. Toni Sar, determined to persevere, stated, "I have to hold on. Where else can I go?" This resilience is a common thread among traditional retailers in Tanah Abang, who are now faced with the necessity of adapting to a rapidly changing commercial landscape.
Shinta Kamdani, president of the Indonesian Employers Association, emphasized the need for adaptation in the face of this evolving market. She noted, "It's not surprising that traditional merchants are struggling with low sales performance. Today, millennials and Generation Z make up the largest customer base in Indonesia. They are more attracted to modern shopping methods." As consumer preferences shift, the challenge for traditional merchants will be to find ways to compete effectively.
The intersection of tradition and modernity in Indonesia's retail landscape is starkly visible in Tanah Abang. While some shops close their doors, the rise of online commerce presents both a challenge and an opportunity. As Ramadan progresses, the fate of many traditional merchants hangs in the balance, prompting questions about the future of retail in a country increasingly dominated by digital platforms.
As the month of fasting continues, the hope remains that the final days leading up to Eid will bring a surge in sales for those who have held out through these trying times. However, the ongoing economic uncertainties and the relentless rise of online shopping indicate that the road ahead may still be fraught with challenges.
