Understanding Differences between Semarang and Jakarta

Although there are many similarities between the two cities, each of them has its specification and anybody doing business in Indonesia should be aware of these distinctions.

You might be wondering what the major differences between the places, which are located in the same country and even on the same island, can be. In Indonesia, a country of more than 260 million habitats and 17,000 islands, there is nothing such as a single market.

In this article, we will take the general comparison further and share our findings and observations from both markets. In the end, you will get to know the major differences between Semarang and Jakarta, capturing the financial aspects, market development, office space rental, HR resources and popular industries.

Wondering how do the two most famous Indonesian islands Java and Bali differ? Continue reading Know your market – Bali vs. Java.

Economic Growth

Jakarta

According to the Central Statistics Agency, in 2017, Jakarta economy has grown by 6.22% year-on-year, increased from the 5.88% recorded in 2016.

Bank Indonesia also claimed that the economic growth was due to the increasing investments, particularly in infrastructure construction projects. It is apparent that there is no sign of lessening of investment opportunities in Jakarta.

Semarang

Similarly, Central Java and Semarang experienced massive economic growth in the last years. In 2017, Bank Indonesia recorded Central Java’s significant contribution of 11.6% to the national GDP.

This growth was driven by export that increased 12.55% year-on-year. Moreover, the improved infrastructure of Central Java region accelerated growth by nearly 8% compared to the previous year.

Market and Industry Developments

Jakarta

It is the city of Jakarta that always comes to mind of investors when thinking of starting a business in Indonesia.

Jakarta is Indonesia’s capital and largest city, as well as the country’s economic and political centre with well-developed infrastructure. Jakarta also has plenty of job and business opportunities with foreign investments pouring into different sectors and markets.

The economy of the city is largely made up of trading, manufacturing, banking, service sectors and financial services. It is also an attractive hub of chemicals, automotive and electronics for companies.

Semarang

Semarang serves as the main shipping port for Central Java. Compared to Jakarta, this city is relatively new with many small manufacturers producing goods such as furniture, textiles, and foods.

With fewer markets and businesses in this new market, there is also less competition for business owners and investors. The city’s infrastructure is still at its early development and can quickly adapt to newly built places such as Kendal Industrial Park.

Consequently, starting a business might be more challenging in Semarang but this also means more opportunities for investors and entrepreneurs before the market becomes saturated.

Lower wages and operational costs in Semarang compared to Jakarta are another important reason why Indonesian companies are starting to either move some of their departments to Semarangor outsource services such as accounting, human resources or marketing from the Central Java’s capital.

Office Space Rental

Jakarta

In the last decade, Jakarta experienced a massive construction boom <— many office buildings were constructed, and more of them are on the plan. This is mainly due to the growing number of industries and businesses in Jakarta and the extremely high demand for office space, especially in the central business district.

Semarang

On the other hand, due to Semarang’s fairly new markets, office space for rent still lacks in the city.

The government and local authorities are working together to curb the growing demand as well with more investors starting a business in Semarang. Several industrial parks have been built, and office providers offering co-working spaces, virtual or private offices appeared on the market as well.

Human Resources and Talent Pool

Jakarta

Due to its diverse business environment and densely populated nature, human resources, especially in terms of recruitment and headhunting, are sufficient in Jakarta as compared to Semarang.

Even though it is easier to find someone to fill a position with required skills and talent for companies in Jakarta, competitors will try to hire your best employees.

Semarang

Semarang lack of human resources suitable for senior positions might require companies to recruit employees from its surrounding cities or areas.

On the other hand, Semarang is home to several universities with thousands of fresh graduates every year. Companies with a high-quality introduction and education programs can find their suitable candidates with no issues.

Promising Industries

There are many potential industries that investors can consider and explore in Jakarta, the most prominent are:

• consulting and advisory services
• leisure and tourism industry
• telecommunication technology

As for Semarang, investors can dive into sectors such as:

• garments
• furniture
• property
• manufacturing

Conclusion

Semarang and Jakarta are growing cities with great economic potential. However, both of them have to be addressed individually and for different business purposes.

Cekindo has been operating offices in Jakarta, Semarang and Bali. Contact us to get to know more about the markets and our market-entry services.