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Indonesia 2015: Thought Leadership

Give me more – the rise of the demanding Indonesian consumer, and why brands need to specialize
      Suresh Subramanian
Managing Director
TNS Indonesia
Suresh.Subramanian@tnsglobal.com 

The economic winds of change through their impact on both the demand side and the supply side, have led to a fundamental transformation of consumer behavior in Indonesia.

There are more consumers in a position to be more demanding than ever before of the products and brands they choose. Rising affluence fuelled by rising incomes means consumers can afford to consider a greater range of brands, and be more demanding when they do. They want products that offer more, and brands that make them feel special.

The growth of new markets within Indonesia is also expanding the ranks of the consumer class. Residents of urban centres in Sumatra, Kalimantan, Sulawesi, and in burgeoning small towns in Java, are now in a better position than ever to buy. The increasing number of women in the workforce, in part due to the new business opportunities the internet offers, is giving women greater individual spending and decision-making power, and boosting overall household incomes. There is a rise in both drive and personal ambition, particularly among the millennials and the Generation Y – people born from the 1980s onwards. They want to achieve more, be it at work or through rising entrepreneurial ambitions.

While consumers’ list of wants has been growing and changing, the supply side of the consumer equation has been too.

The rise of mini-markets across the country means many more people have access to a greater range of goods, and for manufacturers, it is becoming easier to achieve national distribution. As more people live within reach of self-service mini-markets, there is a new pressure to contend with: the agony of choice. People now have to stand in front of an aisle or wall of goods and decide what they want to buy. This is becoming a bigger issue for consumers by the day, as the appeal of Indonesia’s lucrative market attracts new companies with new brands and there are more new product launches. In the food and beverage category in particular, the explosion of choice in recent years has been tremendous. Further, increasing internet access provides greater access to a whole new world of opportunities.

So, consumers want more, and there are more ways for them to get it. But they don’t just want more of the same. With plentiful choice and heightened demands, here are three ways brands can help consumers find what they really, really want.

  1. Celebrate difference. People want to feel special, and are drawn to products and brands they feel are specifically targeting them. Specialization can cater for people in different demographics, people pursuing different lifestyles, for men and women, or for consumers with differing budgets. The power of specialization is already evident in rising sales of milk powder developed specifically for children, at the expense of standard milk sales. Likewise, there has been growth in personal care products marketed specifically at men, and there is a rise in price tiering across categories.
  2. Excel in specialized needs. Good for everything will become good for nothing. More need-specialized brands will be the order of the day as consumers become more informed and bored of the old. By focusing on sensitive teeth, Sensodyne is making inroads into a mature category. The SIM card brand 3, from Hutch, has focused almost exclusively on its data advantage, and this single-mindedness has enabled the brand to outgrow others in a highly competitive category.
  3. Target occasions. Consumers are already shopping across a range of brands and price bands within a category, using different brands for different consumption occasions, particularly in the food and beverage category. Occasion-focused marketing is a way to inspire more frequent consumption and drive growth.

The macro-economic winds of change have already caused significant differences in the behavior of Indonesian consumers. These winds of change are only going to get stronger. Specialization is imperative in this environment if brands are not to get left behind.


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