How to reach out to the next pot of gold
Channel Planning Director
The rise of ‘Rurban’ consumers
How to reach out to the next pot of gold
“Where will the next level of growth come from?” – This question is what keeps many brand managers awake at night. It is difficult enough to find growth in urban markets; unlocking rural markets in Indonesia is even harder.
Rural consumers might be living on a small daily budget, but they represent a large base. Despite this large consumer base – and rural people’s growing ability to consume – brands continue to spend disproportionately in urban markets.
Indonesia is experiencing a rapid urbanization process that has changed the social and economic status of its people. President Joko “Jokowi” Widodo’s government has plans for 222 “national strategic projects” involving roads, railways, bridges, power stations and much more. This has motivated migration, and the flow is increasing across Indonesia.
During the 2019 National Coordination Meeting for Village Administration in Jakarta, President Jokowi has disbursed more funds for village development.
“Indonesia has 74,900 villages. It means that the Government has built a 600-meter road per village,” President Jokowi said.
This year’s Village Fund allocation was IDR70 trillion (US$4.9 billion), one of the largest in history to improve welfare of the Indonesian people. We can expect more and more migration to provide better job opportunities, as well as a better quality of life.
Looking at the population triangle, we have the truly urban, 23 percent of Indonesians who sit at the top, and the truly rural, 48 percent at the bottom of the pyramid. In between, there’s a new and fast-emerging class of consumers, the “Rur-ban”. Despite living in semi-urban centers, small towns, or villages, they often behave in quite similar ways to their truly urban counterparts.
Decoding the Rurbans:
- High penetration of smartphones
- Majority use phones as their primary way of accessing the internet and information
- They consume data and entertainment on their smartphones, just like urbanites
- They say entertainment and brands’ engagement activities often seem to be “not for them”
- They use unique offline channels, and are strongly influenced by their communities
The rising disposable income of Rurbans means they can afford to consider a wider range of brands and be more demanding than they once were. They want products that offer them better value, and brands that are meaningful to them.
Although their digital usage behaviors are similar to those of urbanites, their mindsets are different – as are their triggers, motivations and the challenges brands face in reaching them.
There is a lack of data and insight into what Rurbans want and need, emotionally, rationally and socially. But we do know that their preferred channels of communication, areas of influence and points of purchase are different to urbanites. The journey for brand engagement is therefore very different.
Here is a three-step strategy for effectively reaching Rurban consumers:
- Market prioritization
Technology and data are making it easier to identify Rurbans across Indonesia. It’s important to understand and analyze their consumption patterns, content usage and behavior right up to the moment they make a purchase. This gives a good indication of the market and category potential, both so important to a brand’s growth. Availability and affordability of products in small towns or villages are crucial factors driving conversion.
Digital and social media aren’t the only way to reach Rurbans. There are so many touchpoints that work well in small towns or villages. For instance, very basic static out-of-home media such as billboards and banners work well to drive awareness. Micro-marketing activities in a local area can be highly effective ways to influence a community, driving education, demonstration and trial. Experiential events and activations that enable interactive engagement with a brand, in a fun, personalized, fast and seamless way, can inspire and drive purchase.
Simple messaging that carries local relevance will make a powerful connection with people’s lives. Brands that strike the right tone with consumers will be able to reach and touch them emotionally, rationally and socially. People feel good and special when they sense that brands are catering to them. Brands should consider catering to people pursuing different lifestyles, in different demographics or living on different budgets.
Last but not least, it is important to measure, evaluate and reflect on campaigns – what has worked well and what to avoid in the future. Data will be meaningful and useful only if we analyze it and apply our learnings to future projects. When a campaign has been successful, we need to understand not only that behavior has shifted, but why.
So, start getting to know the Rurbans, and reach for the pot of gold they represent.