Should You Source from Indonesia? What I've Learned Working with Indonesian Factories
Indonesia is Southeast Asia's largest economy and a growing manufacturing destination, particularly for furniture, footwear, textiles, rubber products, and building materials. If you have a product in one of these categories and you are exploring alternatives to China, Indonesia deserves a serious look.
I'm Jim Kennemer, founder of Cosmo Sourcing. We have sourced products from Indonesia for clients alongside our primary operations in Vietnam, China, and Mexico. This guide covers what Indonesia does well, where it falls short, and how to approach the market as a buyer who needs to get a product made.
Updated February 23, 2026
Quick Overview: Indonesia as a Sourcing Destination
Indonesia's manufacturing sector contributed roughly 19% of the country's GDP in 2024, making it the single largest sector of the economy. The country has the world's fourth-largest labor force, with minimum wages that vary significantly by province (from around $130/month in Central Java to $330/month in Jakarta as of 2025). For labor-intensive production like furniture, footwear, and garments, the cost savings compared to China are real.
Indonesia is also a member of RCEP and ASEAN, which means reduced tariffs when trading with other member countries. Tariff rates to your specific market will depend on your importing country's trade agreements with Indonesia, so always check the latest rates before making cost projections.
What Can Be Manufactured in Indonesia?
Indonesia is not a one-stop shop like China. It excels in specific categories, and knowing which ones matter before you start reaching out to suppliers.
Footwear
This is one of Indonesia's strongest sectors. The country is the world's fourth-largest producer and exporter of shoes, manufacturing over a billion pairs annually. Major brands like Nike, Adidas, and Puma all produce significant volumes in Indonesia, particularly in West Java and Central Java. Production hubs around Tangerang, Serang, and Bandung have deep expertise in athletic footwear, casual shoes, and sandals.
If footwear is what you are looking for, we have a detailed guide on finding shoe manufacturers in Indonesia that covers specific factories, regions, and what to expect during the process.
Nike alone sources roughly 20% of its global footwear from Indonesian factories, as we documented in our breakdown of Nike's manufacturing map. That gives you a sense of the scale and capability available.
Furniture and Rattan Products
Indonesia is known for solid wood furniture (especially teak and mahogany), rattan furniture, and handcrafted home decor. Jepara in Central Java is the traditional hub for wood furniture, while Cirebon is strong in rattan. If you are sourcing outdoor furniture, custom wood pieces, or woven home goods, Indonesia has a deep bench of experienced manufacturers.
One thing I have noticed is that Indonesian furniture manufacturers tend to be smaller, more artisan-focused operations compared to the large factory complexes you find in Vietnam or China. This can be an advantage for custom and handmade products, but it means scaling to very large orders sometimes requires working with multiple factories.
Textiles and Apparel
Indonesia's textile sector is one of the largest in Southeast Asia, with established production in garments, woven fabrics, and batik. Bandung and Solo are key production centers. The country does well with basic to mid-range apparel, workwear, and uniforms. For highly technical performance fabrics or fast-fashion turnarounds, Vietnam and Bangladesh tend to have the edge.
Rubber Products
As one of the world's top natural rubber producers, Indonesia has a built-in supply chain advantage for rubber-based products: tires, gaskets, rubber mats, industrial rubber components, and footwear soles. This vertical integration (from raw materials to finished products within one country) can simplify your supply chain and reduce costs.
Building Materials and Ceramics
Indonesia produces quality ceramic tiles, sanitary ware, natural stone, and cement products. If you are sourcing for construction or home renovation projects, Indonesia's building materials sector is worth exploring, particularly for products where proximity to raw materials drives cost advantages.
Handicrafts and Artisanal Goods
Bali and Java are well known for handcrafted jewelry, wood carvings, pottery, woven baskets, and decorative items. If your business involves unique, handmade products, Indonesia's artisan community is one of the richest in Southeast Asia. Keep in mind that artisanal production does not always scale easily, so set expectations around lead times and minimum order quantities accordingly.
What Indonesia Does Not Do Well
Being honest about limitations saves buyers time and money. In my experience, these are the areas where Indonesia is not the strongest option.
Electronics and High-Tech Components
While Indonesia assembles some consumer electronics domestically, it is not a strong destination for custom electronics sourcing at the level most of our clients need. If you need PCB assemblies, consumer electronics, or precision electronic components, China, Vietnam, or Taiwan will serve you better.
Complex Supply Chains Requiring Speed
Indonesia's logistics infrastructure, while improving, is more challenging than Vietnam's or China's. The country spans over 17,000 islands, and moving goods between production hubs can involve multiple transportation modes. Port congestion in Jakarta (Tanjung Priok handles roughly half of the country's trade) is a recurring issue, especially for products with tight turnaround times and complex, multi-component supply chains; factor in additional lead time.
Private Label and Low-MOQ Orders
Compared to China, where thousands of factories compete for small- and medium-sized orders, Indonesia's export-oriented manufacturing base is more focused on larger buyers and established brands. Finding factories willing to take on small private-label runs can require more effort. This is an area where working with a sourcing company makes a significant difference, because we can open doors that cold outreach typically cannot.
Challenges Buyers Should Expect
Communication and Language
English proficiency among Indonesian factory staff varies widely. In export-oriented factories around Jakarta and West Java, you will generally find capable English speakers. In more rural manufacturing areas, particularly for furniture and handicrafts, communication can be a real challenge. Having someone who speaks Bahasa Indonesia, or working through a sourcing partner, makes a measurable difference in how smoothly things run.
Infrastructure Across the Archipelago
Indonesia's geography is its biggest logistical challenge. Manufacturing is concentrated on Java, which has the best infrastructure, but if your product category requires suppliers in Kalimantan, Sulawesi, or Sumatra, expect longer lead times and less predictable shipping schedules. Stick to Java-based suppliers when possible if shipping reliability is a priority.
Quality Consistency
This comes up often with newer buyers. Indonesia has excellent manufacturers, but the quality range is wider than you would find in mature Chinese supply chains. Third-party quality control inspections are not optional here. Build inspection costs into your budget from the start, and never skip a pre-shipment inspection, especially on your first order with a new supplier.
Regulatory Navigation
Indonesia's business regulations and import/export procedures can be complex, and they change frequently. Requirements around product certifications, labeling, and export documentation vary by product category. Working with someone who understands the local regulatory environment saves time and prevents costly mistakes.
How to Find Suppliers in Indonesia
Finding Indonesian manufacturers is harder than finding Chinese ones. That is the reality. The online infrastructure for supplier discovery is thin, and many of the best factories do not appear in English-language searches. Here is what actually works.
Online Platforms (With Realistic Expectations)
Alibaba lists a small number of Indonesian suppliers, but the platform was built for China. Response rates from Indonesian listings tend to be low, and many profiles are outdated. Global Sources is slightly better for vetted suppliers. IndoTrading and Made-in-Indonesia.com are local platforms worth checking for initial research, though the listings vary in quality.
Online directories are a starting point, not the finish line. Treat them as a way to identify potential suppliers, then verify everything through direct communication and factory visits.
Trade Shows
Trade Expo Indonesia (TEI), held annually in Jakarta, is the country's largest export-oriented trade show, featuring exhibitors across multiple sectors. IFEX (Indonesia International Furniture Expo) is valuable if you are specifically sourcing furniture. Manufacturing Indonesia covers industrial equipment and components. These events let you meet factory representatives, see products firsthand, and start building relationships in person, which matters in Indonesian business culture.
Industry Associations
Organizations like ASMINDO (furniture and handicrafts), Aprisindo (footwear), API (textiles), and KADIN (the national chamber of commerce) can provide referrals and introductions to manufacturers. Foreign buyers underutilize these associations but can connect you with established producers who do not actively market themselves online.
Working with a Sourcing Company
I will be direct: if you have never sourced from Indonesia before, working with a sourcing company will save you significant time and reduce your risk. The supplier landscape is fragmented, communication barriers are real, and the best factories are not always the ones with the best websites. A sourcing partner with on-the-ground experience can identify factories that meet your product specifications, negotiate in the local language, and manage quality control throughout production.
This is exactly what we do at Cosmo Sourcing. We identify and vet factories, get you original quotes from multiple manufacturers, and provide direct introductions so you own the relationship. If you want to compare how this works across different countries, our Mexico sourcing guide and Vietnam vs. China comparison offer useful context for evaluating your options.
Factory Visits
If you are serious about a supplier, visit the factory before placing a large order. Indonesian business culture values face-to-face relationships, and a visit gives you insight into production capabilities, quality control systems, and working conditions that no amount of email exchange can replace. We help clients plan and execute factory visits across Southeast Asia, including Indonesia.
Indonesia Compared to Other Sourcing Destinations
Indonesia occupies a specific niche. It is not trying to be China, nor is it a direct substitute for Vietnam. Here is how I think about it when advising clients:
Choose Indonesia when your product involves furniture (especially teak, rattan, or handcrafted wood), footwear, rubber products, or artisanal goods where Indonesia's raw materials and craftsmanship give it a natural advantage.
Consider Vietnam when you need textiles, apparel, electronics assembly, or products where a more developed export infrastructure and faster turnarounds are important.
Look at Mexico when proximity to the US market, short lead times, or USMCA duty benefits outweigh unit cost considerations.
Stay with China when you need complex, multi-component products at scale with the fastest possible turnaround, or when no other country has the specific supply chain your product requires.
Most of our clients who source from Indonesia do so for a specific product category where the country has clear strengths, not as a wholesale replacement for their Chinese supply chain.
Ready to Source from Indonesia?
At Cosmo Sourcing, we help buyers find the right manufacturers in Indonesia, Vietnam, China, Mexico, and beyond. Our flat-fee pricing model means you get original factory quotes with no hidden markups. We typically provide quotes from 2 to 6 factories per project, along with direct introductions, so you own the supplier relationship long-term. We have been doing this since 2012, and our team has sourced thousands of products for clients across every major product category.
If you are considering Indonesia for your next product, reach out and tell us what you are looking for. We will give you an honest assessment of whether Indonesia is the right fit or if another country makes more sense.
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