Despite global economic headwinds, Indonesia’s manufacturing sector continues to attract multinational investment—especially in labor-intensive industries like footwear. Nike Inc.’s latest export of Converse shoes from Central Java underscores the resilience and competitiveness of Indonesia’s industrial ecosystem. This milestone signals broader opportunities for inclusive growth, job creation, and global market expansion.
Key Facts & Background
- Nike’s Export Milestone:
On August 21, 2025, Indonesia’s Minister of Industry, Agus Gumiwang Kartasasmita, officiated the export of Converse shoes produced by PT Yih Quan in Batang, Central Java. The shipment included USD 100,000 worth of footwear to the United States and USD 60,000 to Australia. - Strategic Partnerships:
Nike Inc., a long-term investor in Indonesia, collaborates with 50 factories nationwide—20 of which specialize in footwear. In 2024, Nike exported over 200 million pairs of Nike, Converse, and Jordan shoes globally, with nearly half of Indonesia’s footwear exports to the U.S. market. - Sector Growth & Investment:
The leather and footwear industry grew 8.31% year-on-year in Q2 2025, outpacing national economic growth of 5.12%. By February 2025, the sector employed 921,000 workers—a 35% increase from the previous year. - Capital Inflows & Capacity Expansion:
Between January and August 2025, 18 large-scale footwear manufacturers invested Rp10 trillion, adding production capacity for 73.4 million pairs of shoes and nearly 250 million components. This expansion created over 100,000 new jobs. - Export Performance:
Footwear exports reached USD 3.77 billion in the first half of 2025, growing 13.6% year-on-year. Indonesia ranks 6th globally in footwear exports, holding nearly 4% of the global market share. - Tariff Reductions & Market Access:
The Indonesian government successfully reduced reciprocal export tariffs to the U.S. from 32% to 19%—the lowest among ASEAN peers. Negotiations are ongoing with the EU and Peru to further open markets for labor-intensive sectors.
Strategic Insights
Indonesia’s footwear industry is emerging as a cornerstone of its industrial and export strategy, offering a compelling case study in how targeted investment, policy support, and global partnerships can drive inclusive economic growth. The Converse export from Batang is more than a commercial transaction—it’s a symbol of Indonesia’s evolving role in global supply chains and its ability to deliver high-quality, scalable production for multinational brands.
The sector’s rapid expansion reflects a broader trend: Indonesia is positioning itself as a manufacturing hub for value-added consumer goods, not just raw materials. The influx of Rp10 trillion in investment and the creation of 100,000 new jobs signal confidence in Indonesia’s labor force, infrastructure, and regulatory environment. This is particularly relevant as global brands seek to diversify sourcing away from traditional hubs like China, making Indonesia a strategic alternative.
Tariff diplomacy has also played a critical role. The reduction of U.S. export tariffs enhances Indonesia’s price competitiveness, especially in a market that accounts for nearly half of its footwear exports. This move not only boosts margins for producers but also incentivizes further foreign direct investment. Ongoing negotiations with the EU and Peru suggest a proactive trade agenda aimed at unlocking new markets and reducing non-tariff barriers.
From a socioeconomic perspective, the footwear industry’s growth contributes to job creation, especially in rural and semi-urban areas. With nearly a million workers employed and rising, the sector supports livelihoods, strengthens social inclusion, and promotes gender equity—given the high participation of women in manufacturing roles.
Sustainability and compliance will be key to long-term success. As global buyers increasingly demand ESG-aligned sourcing, Indonesia must continue improving labor standards, environmental practices, and supply chain transparency. Nike’s enduring partnership offers a blueprint for how global brands and local manufacturers can co-create resilient, responsible production ecosystems.
In the long run, Indonesia’s footwear industry could serve as a model for other labor-intensive sectors—such as textiles, furniture, and electronics—seeking to scale exports while delivering domestic impact. The Batang export moment is not just a headline—it’s a signal of strategic transformation.