Indonesia’s Wellness Industry: Navigating a Rapidly Growing Consumer Market
Authors
A. Indonesia's Wellness Economy: A Market on the Rise
Indonesian consumers no longer treat wellness as a luxury. Post-pandemic, health and wellbeing have become an everyday spending category, and the shift is structural: a young, urbanising population, rising disposable income, and social-media-driven fitness and beauty culture have pushed wellness spending well beyond healthcare into food and beverage, beauty, hospitality, sports, and digital services.
This growth also created licensing challenges. As wellness businesses expand across these adjacent sectors, they move across Indonesia's risk-based business licensing regime under Government Regulation No. 5 of 2021 concerning the Implementation of Risk-Based Business Licensing ("GR 5/2021"),[1] administered through the Online Single Submission system ("OSS"). Licensing outcomes under the OSS depend on the Indonesian Standard Classification of Business Fields (Klasifikasi Baku Lapangan Usaha Indonesia — "KBLI"), which is assigned to each business line. The KBLI itself has recently undergone an overhaul.
B. Growth Segments of the Wellness Industry
Indonesia's wellness industry today encompasses a broad ecosystem of interconnected consumer sectors extending beyond conventional healthcare. Fitness, sports and recreation, healthy food and beverages, beauty and personal care, preventive healthcare, wellness tourism, mental wellbeing, and digital health services have increasingly converged into a single consumer-driven wellness economy. This broader definition is also consistent with the approach adopted by the Global Wellness Institute ("GWI"), which regards wellness as a multi-sector economy encompassing industries that enable consumers to actively pursue healthier lifestyles. Globally, the wellness economy reached approximately US$6.8 trillion in 2024, having grown 7.9% year-on-year and more than doubled since 2013.[2] Indonesia has likewise emerged as one of the world's twenty largest wellness markets and the largest wellness economy in Southeast Asia, valued at approximately US$55.77 billion.[3]
Key Growth Segments Driving Indonesia's Wellness Industry
Within Indonesia, wellness consumption has increasingly shifted from traditional health and beauty products towards experience-driven lifestyle services. Urban consumers are increasingly seeking integrated wellness concepts combining fitness, recreation, nutrition, beauty, and social experiences. This has contributed to the emergence and expansion of new business models, including:
- Padel and racket-sports facilities. Padel has gone from a curiosity to arguably Indonesia's fastest-growing sports real estate category. The number of padel courts nationwide grew from just 15 in 2021 to 947 by 2025, and is projected to exceed 2,500 in 2026, with Jakarta alone recording 397 courts as of February 2026, concentrated in South, West, and North Jakarta.[4]
- Pilates and boutique studios. Reformer and mat pilates studios have proliferated across residential and office districts, with an estimated 545 studios operating nationwide as of September 2025, roughly a third of them in Jakarta alone.[5]
- Functional training and HYROX-style fitness. Competition-format functional fitness built around branded races and dedicated training clubs has emerged as one of the strongest formats in the market, with Indonesia's HYROX community reportedly growing more than 200% over the past two years and race registrations selling out within weeks. Industry data also points to Indonesia's premium fitness and wellness segment growing 12-15% annually, and the number of commercial gyms in Jakarta expanding more than 27% since 2022, with growth concentrated in boutique and functional-training formats rather than traditional full-service gyms.[6]
- Sports and recreation more broadly. Indonesia's aggregate sports economy, spanning apparel, equipment, event tickets, travel, and training-venue rental, reached approximately Rp39.45 trillion in 2024, an increase of roughly 5.8% from 2023, according to Indonesia's Ministry of Youth and Sports. Recreational running, cycling, pilates, and gym-based fitness programs have become especially visible in Jakarta, Bandung, and Surabaya.[7]
- Indonesia's beauty and personal care industry remains one of the largest and fastest-growing markets in Southeast Asia. According to Statista Market Insights, overall beauty and personal care revenue in Indonesia is estimated at approximately US$10.55 billion in 2026, projected to grow at a compound annual rate of 5.52% through 2031,[8] supported by strong social media engagement, halal cosmetics demand, and increasing consumer awareness of personal wellbeing.
C. Foreign Investment Limitations
Indonesia's foreign investment regime is generally favourable for investments in the wellness sector. Following the implementation of Presidential Regulation No. 10 of 2021, as amended, (the "Positive Investment List"), business fields are generally open to 100% foreign ownership unless they are expressly listed as closed, reserved for micro, small and medium enterprises ("MSMEs")/cooperatives, or subject to a specific foreign-ownership cap or condition in the Annexes to the regulation. Most wellness-related activities such as fitness centres, cafés, sports facilities, beauty clinics, and a wide range of retail and service activities, fall outside those Annexes altogether and are therefore open to full foreign ownership as a matter of course.[9]
That said, the applicable investment regime ultimately depends on the relevant KBLI code. Certain wellness-related business fields remain subject to specific restrictions. Spa (KBLI 96122), for instance, has historically been treated as a distinct line item in successive investment lists, with its own foreign-shareholding parameters that can differ from the fully open default applicable to businesses such as a café or a gym, so the allocation between local and foreign shareholders should always be checked against the specific KBLI and business scope.
At the other end of the spectrum, certain small-scale, technology-light activities are reserved outright for MSMEs and cooperatives, traditional, home-scale massage and reflexology services being a familiar example, while some manufacturing activities close to the wellness space, such as traditional herbal medicine (jamu) production for human use, are also reserved for domestic investment.[10]
Nevertheless, the position is not uniform across the industry. Certain activities remain subject to specific foreign ownership restrictions or are reserved for MSMEs, while others require additional sectoral approvals depending on the nature of the services provided.
D. A Market That No Longer Fits One Regulatory Box
Unlike many traditional industries, the wellness sector is not regulated under a single legal framework or supervised by one central government authority. Rather, it comprises a broad spectrum of business activities depending on the products/services it offers. For example, a medical spa will be under the supervision of the Ministry of Health; sports facilities will be under the regional government and Ministry of Tourism; sports/wellness retail businesses will be under the Ministry of Trade (and, for the products themselves, BPOM); and a digital wellness or telehealth platform will additionally need to register as an electronic system operator with the Ministry of Communication and Digital Affairs.
From a regulatory perspective, these integrated wellness business models such as a club that combines a gym floor, a café, a spa corner, and a small retail shelf of supplements under one roof, for example, are not one licensing exercise but several running in parallel, each with its own KBLI code, its own risk classification, and its own supervising authority. Some of those component activities may also be fully open to foreign investment while others, such as a small-scale massage counter operated as a stand-alone MSME-reserved line item, are not, meaning the corporate structure must be designed around the licence map, not the other way around. Businesses should not assume that a single Business Identification Number (Nomor Induk Berusaha or "NIB") or principal business classification will be sufficient to cover all commercial activities undertaken.
Accordingly, businesses planning to establish or expand wellness operations in Indonesia should carefully assess their intended business model at the outset to ensure that the selected KBLI classifications, licensing strategy, and operational activities remain aligned.
E. KBLI 2025 and Its Implications for the Wellness Industry
While the wellness industry encompasses a broad range of business models, most wellness-related businesses are regulated under Indonesia's risk-based licensing regime implemented through the OSS system. Licensing requirements largely depend on the relevant KBLI, as well as the risk profile of the business activity.
Following the issuance of BPS Regulation No. 7 of 2025, enacted on 18 December 2025 and effective immediately, Indonesia has formally adopted KBLI 2025, replacing the previous KBLI 2020 classification. In April 2026, the Minister of Investment and Downstreaming/Head of BKPM, the Minister of Law, and the Head of BPS jointly issued a Circular Letter setting out the technical mechanism for migrating existing KBLI codes within the OSS system, the Ministry of Law's AHU system, and other integrated government platforms. Importantly, the government has confirmed that the transition does not, by itself, require businesses to re-apply for new licences: business licences already issued, verified, or approved before the KBLI 2025 conversion remain valid, and the adjustment is intended to occur through a data update in OSS rather than a fresh application.
For wellness operators, the practical implication is less about needing new paperwork and more about accuracy. KBLI 2025 has split, merged, or reclassified a number of codes relevant to the sector, which can shift a business's risk classification and, with it, the certificates or approvals it needs. A wellness business that has been operating for several years under a KBLI code that no longer precisely matches its activities should use this transition as an opportunity to review and, where necessary, realign its classification, rather than waiting for a licensing renewal or a due diligence exercise to surface the mismatch.
F. One Sector, Several Licensing Regimes
The table below illustrates how differently the licensing map can look across wellness business models that, to a customer, feel like variations on the same theme. A boutique gym, a beauty clinic, and a spa may all sit comfortably under the "wellness" umbrella commercially, but each answers to a different supervising authority, a different certification body, and a different set of ongoing reporting obligations, which is why a single NIB, or a single KBLI, is rarely the end of the licensing conversation for an integrated wellness concept.
| Wellness Sector | High-Level Compliance Requirements |
|---|---|
| Fitness Centres / Gym | Standard Certificate from an accredited body (LSPr, for PMA companies); Healthy Facility Certificate; self-assessment against business standards. |
| Sports & Recreational Communities | Compliance with regulations of the Ministry of Education, Culture, Research and Technology. |
| Beauty Clinic | Clinic registration; Electronic Medical Records; Ministry of Health data systems (ASPAK/INM); clinic accreditation. |
| Mental Wellness & Self-Care Services | Sector-specific social welfare licensing, dependent on the nature of services provided. |
| Digital Health & Wellness Platforms | PSE (electronic system operator) registration; consumer protection, data retention, and reporting obligations. |
Note: The regulatory requirements above are illustrative only. The licensing requirements applicable to a particular wellness business will depend on its specific business model, products, services, operational activities, and risk classification under Indonesia's risk-based licensing regime. Certain businesses may require multiple KBLI classifications, sector-specific licences, certifications, registrations, or approvals from the relevant government authorities.
G. M&A/Transaction Due Diligence Angle
Indonesia's expanding wellness market has attracted growing interest from both strategic investors and private equity funds seeking exposure to consumer-focused businesses. Depending on their commercial objectives, investment timeline, available resources, and desired level of operational control, investors generally enter the market through one of three principal approaches: establishing a new business (greenfield investment), forming a joint venture with a local partner, or acquiring an existing business.
(i) Establishing New Entity
A greenfield investment provides investors with greater flexibility in determining the company's business model, corporate governance structure, branding strategy, operational standards, and licensing framework from the outset. However, establishing a business from scratch typically requires a longer market entry period, as investors must complete the incorporation process, obtain the relevant licences and approvals, recruit personnel, establish operational facilities, and build market recognition.
(ii) Joint Venture with Domestic Partner
By contrast, a joint venture enables investors to leverage the local partner's market knowledge, commercial relationships, and operational experience. This approach may facilitate faster market penetration, particularly in businesses where local networks, vendor and consumer trust, or industry expertise are important. However, the success of a joint venture depends heavily on a well-structured underlying agreement that clearly allocates governance rights, reserved matters, exit mechanisms, deadlock resolution procedures, and each party's respective rights and obligations.
(iii) Acquiring Existing Business
For investors seeking immediate market access, acquisitions often provide the fastest route to establishing a presence in Indonesia. Through the acquisition of an existing business, investors may benefit from an established customer base, experienced management team, existing operational infrastructure, contractual relationships, and licences that have already been obtained by the target company. However, acquisitions also require careful assessment of the target's legal and regulatory compliance before the transaction proceeds.
H. Legal Due Diligence in Wellness Businesses: Key Considerations for Investors
For investors pursuing acquisitions, legal due diligence plays a critical role in assessing whether the target business has been operating in compliance with Indonesia's regulatory framework. In the wellness sector, the review typically extends beyond conventional corporate matters to include regulatory and operational compliance, particularly given that businesses often operate across multiple regulated sectors. Key areas commonly reviewed include the following:
- Licences (KBLI classification, sector-specific licences, regional permits/licenses);
- Zoning and location permit;
- Product registrations (if selling products);
- IP ownership;
- Commercial arrangements with third parties;
- Etc.
Where regulatory gaps or compliance issues are identified, investors will typically seek to address such risks through transaction documentation, including conditions precedent, indemnities, or post-completion undertakings, depending on the nature and materiality of the findings.
Indonesia's wellness economy is, in the end, a story told in small, physical details: a padel court finished every seven hours, a new pilates class added to a booking app every few days, a skincare shelf restocked faster than the one beside it. Multiply those details across a market of nearly 290 million increasingly health-conscious consumers, and the aggregate opportunity becomes hard to ignore. But the same fragmentation that makes the sector exciting, fitness regulated one way, spas another, supplements another again, is exactly what trips up investors who assume "wellness" is a single licence away from being open for business.
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Footnotes
Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.
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