Indonesian Jamu Industry Strong in Culture but Weak in Economic Impact, 2026 Study Reveals
Indonesia’s traditional herbal medicine industry, known as jamu, maintains strong consumer loyalty but contributes only marginally to the national economy. This finding emerges from a 2026 study titled The Strategic Role of the Jamu Industry in the National Economy 2025 by Agus Rizal, Yudhie Haryono, Firdaus Syamsu, Yaya Sunaryo, Dedi Setiadi, Riskal Arief, Asy’ari Muchtar, and Heri Susanto of the Badan Rempah dan Herbal Indonesia. Published in the Internasional Journal of Integrative Sciences (IJIS), the research highlights a paradox: jamu remains culturally influential and widely consumed, yet its economic productivity, industrial scale, and fiscal contribution remain limited. The findings matter as Indonesia seeks to develop local resource-based industries to strengthen health resilience and economic sovereignty.
Cultural Heritage Meets Modern Economic Challenges
Jamu has long been embedded in Indonesia’s cultural identity and daily health practices. Built on biodiversity, traditional knowledge, and community-based production, the herbal medicine sector intersects with agriculture, health, and small-scale manufacturing.
Despite this cultural strength, the industry faces structural challenges. Data from Indonesia’s Central Statistics Agency cited in the study shows the jamu subsector contributes less than 0.3 percent to the traditional medicine industry’s GDP. The gap between cultural prominence and economic value has become increasingly visible amid competition from modern pharmaceuticals and global health products.
Researchers from the Badan Rempah dan Herbal Indonesia argue that the core issue is not a lack of market demand but limited innovation, fragmented supply chains, and weak policy integration.
Mixed-Method Research Design
The study applied a mixed-method explanatory sequential design. Researchers first conducted a quantitative survey involving 138 respondents, including jamu producers and consumers who had used herbal medicine within the previous six months. The survey measured consumer preferences, price perceptions, distribution patterns, gender dynamics, and market potential.
This quantitative phase was followed by qualitative interviews with 25 stakeholders, including producers, distributors, traders, and consumers across the value chain. The interviews provided deeper insight into structural barriers affecting productivity, innovation, and business expansion.
By combining statistical analysis and thematic interpretation, the research offers a comprehensive picture of the industry’s economic and socio-cultural dynamics.
Key Findings: Stable Market, Structural Stagnation
The study identifies several major patterns shaping the jamu industry:
1. Dominance of Micro-Scale Enterprises
a. 86 percent of businesses employ only one to five workers.
b. 73 percent produce fewer than 500 units per month.
c. Most businesses have operated for over a year but show limited growth in output or revenue.
This structure indicates maturity in experience but stagnation in productivity and scaling.
2. Stable Demand Without Expansion
Consumer loyalty remains high:
a. 64 percent of consumers prefer local traditional jamu.
b. Liquid (49 percent) and powdered (41 percent) forms dominate consumption.
However, customer growth remains largely stable, suggesting a mature market lacking innovation-driven expansion.
3. Limited Income and Welfare Gains
a. 70 percent of entrepreneurs earn between IDR 2–10 million monthly.
b. 28 percent report declining personal income.
c. Wage growth among workers is minimal, with most salaries stagnant or decreasing.
These trends reflect a productivity–wage trap typical of subsistence-oriented sectors.
4. Shallow Fiscal Contribution
a. 53 percent of business actors pay less than IDR 100,000 in taxes.
b. More than half report no increase in tax payments.
The sector’s large number of actors contrasts with its limited fiscal impact.
5. Innovation Potential but High RiskWhile 54 percent of respondents acknowledge the possibility of using goat’s milk as a jamu ingredient, only 5 percent view it as a viable market opportunity. Supply uncertainty and demand risk remain major barriers.
Structural Barriers Behind the Paradox
The research highlights several structural challenges:
According to the authors, these factors prevent the jamu sector from transforming cultural capital into economic power.
Implications for Industry and Policy
The findings carry significant implications:
1. Economic DevelopmentStrengthening the jamu value chain could generate broader multiplier effects across agriculture, processing industries, and local distribution networks.
2. Public Health StrategyJamu plays a preventive role in health maintenance. Integrating standardized herbal medicine into national health systems could reduce long-term healthcare costs.
3. Industrial PolicyThe study calls for mission-oriented policies, including regulatory differentiation between herbal and chemical medicines, innovation support, and financing schemes tailored to small producers.
4. Export PotentialWith proper standardization and branding, jamu could become a global health commodity rooted in Indonesia’s biodiversity and cultural identity.
Academic Insight
Lead author Agus Rizal and colleagues from the Badan Rempah dan Herbal Indonesia emphasize that the industry’s primary challenge lies in structural transformation rather than market demand. The researchers note that jamu is “large culturally and numerically but small economically,” underscoring the need for integrated policy, innovation, and value chain development to unlock its national potential.
Author Profile
Source
Journal: Internasional Journal of Integrative Sciences (IJIS)
Year: 2026
DOI: https://doi.org/10.55927/ijis.v5i2.6
Official URL : https://journalijis.my.id/index.php/ijis/index
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