In the suburbs of Jakarta, now the world’s largest urban area by population, mid-tier housing developments are springing up like mushrooms. And here, in a pattern repeated throughout Indonesia in cities such as Bekasi, Surabaya and the new capital Ibu Kota Nusantara, smart locks, ap-based lighting and CCTV come pre-installed in homes priced for first-time buyers. This is the visible tip of the iceberg of a much larger digital transformation.
Indonesia is one of the largest and fastest-growing digital economies in the world – and the undisputed leader in Southeast Asia. World Bank forecasts see GDP growth projected to hold at 5.0% in 2026, rising to 5.2% in 2027. Digital infrastructure will be a key driver of growth. Aspirational spending and digital adoption are on the rise amongst Indonesian consumers even as the traditional middle class contracts – from 57.33 million people in 2019 to 47.85 million in 2024, per EBC research. In 2025, household consumption accounted for around 54% of GDP, which expanded 5.6% YoY in Q1 2026, driven by resilient domestic demand, early Ramadan spending, and expanded social programs. Smart home adoption is driven by a narrower but higher-earning urban consumer segment along with housing-developer bundling for new properties.
Indonesia’s smart home market is expected to reach US$8.12 billion by 2030, according to a report by researcher Tushmi Dutta for NMSC in April. “Government incentives and increasing awareness of eco-conscious living are driving consumers to adopt smart home solutions,” Dutta writes. “With Indonesians enjoying greater purchasing power and economic optimism, the appeal of innovative and convenient home appliances, including smart home devices, is steadily increasing.” Dutta cites Samsung, Bardi and Schneider Electric as some of the key players in the Indonesian smart home sector.
For brands and investors in the smart home sector, Indonesia’s scale and construction pipeline make it the obvious choice as an entry point into ASEAN. In terms of ecosystems and interoperability, the Matter protocol is a baseline requirement in Indonesia, as it is across south-east Asia. “Local production of sensors and hubs in Jakarta’s manufacturing corridors lowers logistics costs and buffers tariff shocks, improving price competitiveness,” Mordor Itelligence reported in January this year. Also shaping go-to-market strategy in Indonesia are telco bundling programs. Mordor Intelligence cites the example of Telkomsel’s IndiHome bundles, which “shift focus from connectivity ARPU to device attach rates, accelerating market penetration.”
Government-backed housing investment – including the recent swathe of affordable housing units in Jakarta’s satellite cities such as Tangerang and Bekasi, and further afield across Java and elsewhere in the archipelago – are creating a rare opportunity to build in smart from day one en masse, a channel unavailable in more mature markets.
Smart home adoption is not an isolated consumer trend in Indonesia. It is a leading indicator of the country’s broader digital economy maturation, with infrastructure, consumer platforms and housing policy converging even while economic growth remains uneven across income tiers. The opportunities for domestic and overseas companies to build their businesses and contribute to quality of life in this sector are extensive.
