Haughton's Lancashire team-mate Michael Edge put up a gritty display but went out 17-14, 15-5 against the Commonwealth champion and No 9 seed, Wong Choong Han.
The top Indonesians got off to a flying start on the opening day. The men's third seed, Budi Santoso, swept past Canada's Michael Beres 15-7, 15-5, Hendrawan beat Finland's Alexander Book 15-7, 15-12 and Indra Wijaya beat the Norwegian Jim Ronny Andersen 17-16, 15-5.
In the absence of some top names from China, Denmark and Malaysia, Indonesia appear to have a fighting chance of winning the men's singles title for the first time since 1994.
The tournament, celebrating its centenary year, suffered a succession of blows earlier in the week after withdrawals through injury or illness, which included the defending champion and favourite Sun Jun of China, the world champion Peter Rasmussen of Denmark and the leading Malaysians Ong Ewe Hock and Yong Hock Kin.
The Commonwealth champion, Kelly Morgan of Cardiff, had a walkover into the second round of the women's event along with Ireland's Sonya McGinn and Yorkshire's Justine Willmott.