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Cross Category Trends


1 The digital opportunity is still expanding

With smartphone ownership at 96 percent among some sections of the Indonesian consumer market, you might think a digital saturation point has been reached. But look at what people are doing on their phones, and the number of people yet to get online, and the opportunity that remains becomes clear. Half of adults in the country are still yet to get online – that’s millions of people yet to post their first selfie, share their first review and make their first online purchase. And those who are already connected and shopping online are spending an average of just $89 a year on e-commerce. That leaves considerable scope for growth. To tap into this opportunity, look at breaking down some of the barriers that stand in the way of people buying online or spending more: consumers want free delivery, they want to be able to find what they want more easily, and they want assurances about product quality.

2 Annual growth is no longer a given

One of the benefits of operating in a fast-developing market from a low base of consumer affordability is that annual growth in revenue tends to be big, and consistently so. In Indonesia, however, brands are finding this is no longer necessarily the case. Continued sales growth cannot simply be expected – it must be engineered. This is especially the case for fast-moving consumer goods brands, which have enjoyed years of growth and are now seeing the pace slackening off. A key driver of engineered growth is meaningful innovation; brands that are challenging conventions in a meaningful way are the brands that are succeeding. They must be brave enough to innovate, agile enough to evolve, and be focused on both serving existing customers and identifying new opportunities.

3 Spirits are high

Economic stability, low unemployment and steady inflation bolstering consumer confidence and putting more money in their pockets. The time is right to claim a share of that extra disposable income, whether that’s with premium goods, reasons to buy more frequently, or something that is only available when people have a little extra cash to spare, such as insurance, savings or investment products. As incomes rise, so too do aspirations, so it’s worth building a reputation with people who can’t yet afford what you’re offering. When their fortunes further improve, the brands they’re already familiar with and that have built up trust will be the ones they turn to.

4 ‘Stuff’ is making way for experience

Consumers’ priorities are shifting, and as they start to earn more money and have their daily essentials, they’re putting that little extra money available into experiences rather than accumulating more physical goods. So, spending on fast-moving consumer goods is flat, while there’s a boom in interest in travel, eating out and entertainment. Travel has never been more affordable or easier to organize; international passenger flights from Indonesia were up 12 percent last year, and 25 percent of housewives say their families are eating out more than before. The trend does not apply just to the most wealthy – lower-income earners might be spending less on experiences than richer households, but they are still spending more on these things than they used to.

5 Campaign integration adds value

Take no notice of those who say new technology spells the demise of traditional media; it’s simply not true. The connected world is building upon traditional ways of marketing,

not killing them. Smart brands strike the right balance between online and offline activity, and integrate the two to create a multiplier effect. Successful communications require a comprehensive view of the consumer to understand where they are and what they’re doing, in order to reach them in the right way with the right message. Brands can cut through the considerable advertising clutter by delivering perfectly timed, highly relevant content.


Valuable lessons for marketers


The following six cultural values are not uniquely Indonesian, but they combine in such a way as to make this a unique market in which to operate. Overlook them at your peril.


·       There’s unity in diversity. Culture and religion are important, but differences are embraced.

·       Belonging is important. Affiliation and democracy matter.

·       Family is sacred. Women can be confident and independent, but their role in the home is prized.

·       There’s optimism about being in a land of plenty, rich in natural resources and with a young population.

·       Indonesians are proud of their country and feel protective of its cultural heritage.

·       At the same time, they are keen to embrace new technology and trends.