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Indonesia 2016 | Highlights | Start-ups in shake-up

Online brands disrupting brand-building landscape 

To say that online shopping has taken off in Indonesia would be to understate the impact that e-commerce is having on consumers’ lives and on the entire landscape for brands.
 
The value of e-commerce is expected to hit US$24 billion in 2016 – that’s double the value of online shopping from just two years ago. E-commerce only accounts for a tiny proportion of all retailing – just 0.8 percent – but is expected to rise to 8 percent within 10 years.
 
Consumer concerns about online security, delivery and receiving the goods they’ve actually ordered have gradually been ebbing away, and research shows that 87 percent of smartphone users have made a purchase online.
 
There has been an explosion in the number of digital commerce brands in the past two years, and many are causing severe disruption in their categories. These e-commerce brands do not feature in the BrandZ™ Top 50 Most Valuable Indonesian Brands because they don’t yet meet its’ requirement that they are owned by an enterprise listed on the national stock exchange. But they are brands to be nurtured and brands to be noticed, not least by their offline or cross-platform competitors.
 
In the travel agent sector, online brands led by market leader Traveloka have disrupted the category and are making a sizeable investment in brand-building. Online travel agents now hold 88 per cent of the Brand Power in the travel agent category, leaving just 12 per cent for analogue players. Traveloka accounts for two-thirds of the Brand Power in this sector, and is now the 10th-biggest spender on television advertising in Indonesia.
 
Similarly, long-standing taxi company Blue Bird, which ranks 28 in the Top 50 brands this year, is being shaken up by innovative, web-first newcomers such as Go-Jek. Go-Jek already commands 20 percent of Brand Power in the transport sector and is seen as the most differentiated brand in the business.
 
It is not just online travel brands that are disrupting the retail sector, in fact, research in 2015 found that only 14 percent of people buying online had bought flights or train tickets from an e-vendor. By comparison, 72 percent have bought fashion online, 32 percent have bought a mobile phone or phone accessories, and 28 percent cosmetics.


 

Ways to Win

Being heard in a noisy market
Many of the most disruptive digital brands have been spending huge sums on advertising as they compete for share of consumer attention, transforming not just the business landscape but the advertising environment as well. In such a busy marketing environment, it is becoming increasingly difficult for brands to make their voices heard, and unsustainable to simply attempt to outspend the competition.
 
Technology brands need to focus now on building Meaning in addition to awareness, to broaden their appeal, become more memorable and have a deeper emotional bond with consumers. Some of the biggest tech brands are already outperforming the national average on the Meaning scale (the average of all brands is 100) but there is clear scope to grow.
 


Marketers should ask themselves two questions: First, how does their brand improve consumers’ lives, even in small ways? And second, how do they deliver a positive brand experience that lives up to or exceeds expectations created by marketing communications?
 
China is some way ahead in technology brand development, with eight tech brands in the BrandZ™ Top 50 Most Valuable Chinese Brands, and three in the Top 10. Tencent has developed its Meaning to consumers not just through its communications but also by developing its offering through its “Connection” strategy. What began as a messaging service now stretches to anything users want to experience online – and much offline as well – including shopping, socialising, gaming, payment, music and taxi services. Tencent now ranks 11th in the BrandZ™ Top 100 Most Valuable Global Brands 2016, worth US$84.9 billion.
 
Theory in Action
In Indonesia, the e-commerce brand Bukalapak manages to stand out from the crowd, not by outspending them on advertising but by making its communications more Meaningful and memorable. Its humorous takes on everyday situations that many people can identify with mean its ads well outperform the category average on Millward Brown/TNS measures of enjoyment and involvement. This has helped Bukalapak close the gap on some of its bigger rivals, Tokopedia and Lazada, in how frequently it appears in Google searches.