AR & VR - Indonesia

Indonesia

In Indonesia, revenue in the AR & VR market market is projected to reach US$397.7m in 2024.
This revenue is expected to demonstrate an annual growth rate (CAGR 2024-2029) of 9.78%, leading to a projected market volume of US$634.2m by 2029.
The largest market within this market is AR Software, which is anticipated to have a market volume of US$123.8m in 2024.
Although the United States generates the majority of revenue with a projected market volume of US$10,900.0m in 2024, in Indonesia is also poised to grow in this sector.
In the AR & VR market market, the number of users in Indonesia is expected to reach 145.0m users by 2029.
User penetration in Indonesia will be 47.0% in 2024, and it is expected to rise to 50.0% by 2029.
Additionally, the average revenue per user (ARPU) in Indonesia is expected to amount to US$3.0.
Indonesia's burgeoning tech ecosystem is fostering innovative applications of AR and VR, particularly in education and tourism sectors, enhancing user engagement significantly.

Definition:

Augmented reality (AR) and virtual reality (VR) make it possible to combine the real and virtual worlds. AR is generally accessed via mobile phones and primarily relies on lenses. AR effects can be created by using lenses in social media apps, for example. AR is also used for displaying digital 3D objects in our surroundings, e.g., in gaming or eCommerce apps. Meanwhile, VR technology allows users to dive into the virtual world, and, unlike AR technology, it requires a headset device which enables the creation of virtual worlds.

Structure:

The AR & VR market consists of six different markets: AR Advertising, AR Hardware, AR Software, VR Advertising, VR Hardware, and VR Software. AR Advertising covers mobile advertising that is displayed in the most prominent social media apps. AR Hardware comprises AR headsets and glasses. AR Software is divided into three different application types, namely social media, gaming, and eCommerce applications, which can be accessed via the most prominent app stores. VR Advertising covers in-game advertising as well as advertising in VR videos. VR Hardware comprises both tethered head-mounted displays (HMDs) and stand-alone HMD headsets. Lastly, VR Software covers VR games and VR videos, which require headsets.

Additional information:

The market comprises revenues, users, average revenue per user, and penetration rates. Revenues are generated through in-app purchases, advertising spending, and consumer spending on apps, games, and hardware such as headsets or glasses. Sales channel data shows both online and offline revenues, which include VAT. The market only displays B2C revenues and users for the above-mentioned markets and markets; B2B and B2G revenues are not included. Additional definitions for each market can be found on the respective market pages.
Market numbers for VR headsets are also featured in the Consumer Market Insights, namely in the Gaming Equipment market of the Consumer Electronics market. Unlike the VR Hardware market in the Advertising & Media Outlook, the Gaming Equipment market also covers smartphone VR devices.
Key players in the market include companies such as Meta (Oculus VR), Microsoft (HoloLens), Snap Inc. with different lenses, and Nvidia, which offers computing hardware components.
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Analyst Opinion

The AR & VR market in Indonesia has been experiencing significant growth in recent years.

Customer preferences: Indonesian consumers are increasingly interested in immersive and interactive experiences, which has fueled the demand for AR & VR technologies. The younger generation, in particular, is driving this trend as they are more tech-savvy and open to adopting new technologies. Additionally, the COVID-19 pandemic has accelerated the adoption of AR & VR in various industries, such as education, entertainment, and retail, as businesses seek alternative ways to engage with customers remotely.

Trends in the market: One of the key trends in the AR & VR market in Indonesia is the growing popularity of virtual reality gaming. With the rise of e-sports and the increasing availability of VR gaming devices, more Indonesians are embracing this form of entertainment. Virtual reality gaming provides a more immersive and realistic experience, attracting gamers who are looking for a new level of engagement. Another trend is the integration of AR & VR technologies in the education sector. As schools and universities adapt to online learning during the pandemic, educators are exploring innovative ways to deliver lessons and engage students. AR & VR technologies offer interactive and immersive learning experiences, allowing students to visualize complex concepts and explore virtual environments. This trend is expected to continue even after the pandemic, as it enhances the learning process and improves student engagement.

Local special circumstances: Indonesia is a country with a large population and diverse culture. This presents both opportunities and challenges for the AR & VR market. On one hand, the large consumer base provides a vast market for AR & VR products and services. On the other hand, the diverse cultural landscape requires localization and customization of AR & VR content to cater to different preferences and languages. Companies operating in the Indonesian market need to understand and adapt to the local culture in order to succeed.

Underlying macroeconomic factors: The economic growth in Indonesia has contributed to the development of the AR & VR market. As the middle class expands and disposable incomes rise, more consumers have the purchasing power to invest in AR & VR devices and experiences. Additionally, the government's focus on digital transformation and innovation has created a favorable environment for the growth of the AR & VR industry. Initiatives such as the "Making Indonesia 4. 0" program and the development of digital infrastructure have attracted investments and supported the expansion of AR & VR technologies in the country. In conclusion, the AR & VR market in Indonesia is thriving due to customer preferences for immersive experiences, the adoption of AR & VR in various industries, and the favorable macroeconomic factors. The market is expected to continue growing as more consumers embrace AR & VR technologies and businesses recognize the value of these technologies in enhancing customer engagement and driving innovation.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on the AR & VR market. AR and VR enable consumers to experience a new dimension, using either a headset or installed units, as they combine the real and virtual worlds. Consumer revenue figures refer to revenues relating to AR hardware, AR software, VR hardware, VR software, and spending on AR and VR advertising. Both digital and non-digital revenues are included.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on specific predefined factors for each market market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, as well as third-party studies and reports. In addition, we use relevant key market indicators and data from country-specific associations, such as consumer spending, internet penetration, 4G coverage, and historical developments. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are level of digitalization, adoption of technology, GDP per capita, and internet penetration.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).