Increasing labour costs as opportunity

The DIY culture is more widespread in developed countries than in emerging ones, with neither Indonesia nor Thailand an exception to this rule, Cruz del Barrio discovered. The DIY expert at Euromonitor, a market research company, knows this phenomenon from numerous other similarly structured companies. A key explanation for this is employment status. When there is a large share of self-employed workers in the population, they constitute a pool of contractors that homeowners can use instead of doing home improvement tasks themselves.In Indonesia, most home improvement installations are still carried out via the do-it-for-me (or hiring services) method rather than do-it-yourself (DIY) as the cost of hiring workers is still affordable for most middle-upper-income consumers. Property developers also contribute significant amounts to the sales of home improvement manufacturers, estimated at around 20 to 25 per cent of their revenues. Consumers remain the main target audience as home improvement also caters for the preference of homeowners for decorating their newly built houses or renovating their existing ones. In decorative paint, for example, repainting activity dominates total sales for the majority of decorative paint manufacturers in contrast to new painting.Given that the property market is likely to continue growing over the next five years, home improvement still offers potential for further growth in Indonesia. As the country's economic situation is likely to improve over the long term, consumers' improved disposable incomes will see them become more willing to invest in efforts to smarten up and maintain their homes. With rising disposable incomes, more consumers are expected to spend more on home improvement products, especially floor tiles and home paint, to renovate their homes.The expected rapid expansion of modern home and garden specialist retailers such as Ace Hardware into more cities in Indonesia will also provide consumers with a wider choice of products in more convenient locations. Home improvement has the potential to post a respectable value CAGR of more than 7 per cent at constant 2013 prices over 2013 to 2018 thanks to various factors such as a growing number of households, rapid property development and the expansion of modern retailers.The situation is quite similar in Thailand, where home improvement is not something that people generally do themselves. For more complicated tasks such as plumbing, fitting bathrooms and kitchens or…