A young demographic profile, growing middle class and rising income levels are set to drive robust consumption growth in Indonesia.

A report released on Thursday by trade agency IE Singapore said the rise of new urban hubs and modern retailing formats is creating opportunities in the country's consumer sector that Singapore companies - particularly those in the food and beverage (F&B) and retail sectors - should not overlook.

By 2017, almost 80 per cent of Indonesian households will have combined annual earnings of more than US$5,000 (S$6,250).

The country's consuming middle class, now at 45 million, will triple to 135 million by 2030, to become the world's third largest middle class after China and India.

Competition in Indonesia for a slice of the consumer spending pie is intensifying, said IE Singapore's report.

It suggested Singapore companies should consider partnering strong Indonesian companies with the resources, capability and right market connections to help them quickly scale up and capture market share in Indonesia.