Srivijaya, like Funan, became very rich because of its strategic location on the Indian Ocean trade route. The city was an entrepot, meaning that it was a place where merchants from different areas came together to trade. The government actually built very big warehouses to store all of the goods, such as silk and pottery from China, perfume and glass perfume jars from Persia, Frankincense from the Middle East, and many more types of products.

The leader of Srivijaya charged money for merchants to travel through the Strait of Malacca. This is how the kingdom became so rich and powerful. Furthermore, Srivijaya had their own natural resources, which they sold to foreign merchants. These included camphor, resins, and sandalwood, which were used for making medicines and for their pleasant odors.

Srivijayan cities were multicultural. This means that people who lived or stayed there for long periods of time had many different cultural backgrounds. The main ethnic group living here were the Malay, and the old Malay language was used primarily among common people. However, merchants from India, Arabia, and China, in addition to native Malays, could all be found in Srivijayan cities interacting together. Merchants, in fact, often had no choice but to stay in cities like Palembang for long periods of time because of something called trade winds.

Trade winds are seasonal winds that blow in different directions during different parts of the year in this part of the world. They blow in one direction from May to August, and in another direction from November to April. Since sailors used the winds to power their ships, merchants needed to wait for the winds to change in a favorable (the correct) direction. So they often had to wait for long periods of time in Srivijayan cities.