June 2, 2016 12:00 pm JST

Indonesians splurge during Ramadan

WATARU SUZUKI, Nikkei staff writer

Indonesian shoppers take advantage of late-night bargains during the holy month of Ramadan.

JAKARTA Despite Ramadan's emphasis on empathizing with the poor, the Islamic holy month of fasting is when most Indonesians spend more on food, clothes and motorbikes than any other time of the year.

During the 30 days of Ramadan, Muslims are forbidden to eat and drink, smoke and have sexual intercourse during daylight hours, and are also told to control anger, among other things. It is a major annual event for Indonesia, which is home to the world's largest Muslim population -- more than 200 million people, or nearly 90% of the country's inhabitants.

Every year, major Islamic organizations gather to determine the beginning of Ramadan according to the Islamic calendar. This year it is expected to fall around June 6. For the following 30 days, Muslims will only take meals before sunrise -- around 3 a.m. to 4 a.m. -- and after sunset -- around 6 p.m. During the day, many of Indonesia's cafes and restaurants close their curtains in consideration for those who are fasting. The majority of Muslims, even those who are not religiously observant during the rest of the year, take part in Ramadan, though children are not expected to strictly observe the fasting requirements.

As soon as the sun goes down, the spending spree begins. Muslims will commonly break their fast by taking sweet snacks, known as takjil, and sweet drinks to get a quick energy boost. This is usually followed by a prayer -- the first of several during the evening -- and a full-course meal. Muslims typically dine with their family at home, but holding gatherings with friends is common, too.

MIDNIGHT MALLS Retailers take this opportunity to hold large-scale sales events that run late into the night. Many Muslims visit malls to shop for new clothes after fasting during the day. In Jakarta, members of the local retailers association organize the Jakarta Great Sale, which generated about 15 trillion rupiah ($1.1 billion) in revenue in 2015. Nearly 80 malls are expected to participate in the citywide sales event this year. Sales during Ramadan make up about 30% of annual revenue for Matahari Department Store, which operates the country's largest department store chain.

With online shopping becoming more popular, particularly among younger consumers, platforms like Lazada and Zalora have joined the festivities with their own special sales events. And Uber, the ride-hailing smartphone app, introduced an on-demand meal delivery service in Jakarta during Ramadan last year.

Demand for clothing commonly spikes ahead of Idul Fitri. The two-day holiday marks the end of Ramadan and is traditionally an occasion for local Muslims to don new clothes.

Sales of motorbikes and other items also go up around this time, as tens of millions of Muslims return to their hometowns for the holiday. For many of those making the trip home, the country's poor infrastructure poses a major challenge. Traffic jams clog major toll roads, and car accidents are not uncommon. Running a business during this period can also be difficult; in general, the government requires companies to give its employees around one week of holidays to celebrate Idul Fitri.

Analysts and economists closely monitor Ramadan spending, as it is considered an important indicator of consumer sentiment. Household consumption, which accounts for more than half of Indonesia's gross domestic product, showed signs of a cooldown in 2015, with sales of cars and motorbikes sliding, and inventory levels at retailers rising.

Falling oil prices and a stable rupiah are expected to improve economic conditions this year, but recovery has been slow so far. The annual GDP growth rate of 4.92% for January-March was below most economists' expectations.

Nikkei staff writer Erwida Maulia contributed to this story.

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