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Key Takeaways


Shopping baskets are changing

Consumers are hitting the shops less frequently than they used to, opting for bigger packs to see them through to their next shop, and are spending their money in different ways. Fresh food sales are growing, and packaged goods sales are shrinking as health becomes a greater focus. People are also eating out more often, so they need less food for in-home dining. And, rather than spend everything they have each week or month, increasingly affluent Indonesians are finding they can save a greater proportion of their disposable income.

Growth is coming from the grassroots

Consumers across the income spectrum are spending more money now than they were a year or two ago, but the pace of growth among the lower classes is double that among middle and upper-class consumers, with spending per buyer up 11 percent a year. These consumers are also expanding the number of categories they shop in, while this appears to be stable now among more affluent households. Lower-income households have different priorities when choosing products and brands, and are opting for those that they feel give them access to something that feels new and plentiful.

Look beyond the big cities

Jakarta and the other major centers of population might be where the bulk of Indonesia’s wealth lies, but the highest volume growth is being achieved in most categories in smaller towns and the more remote islands. This is partly due to the growth of the modern trade, meaning many families are switching to supermarkets, where there’s more to buy, and partly it’s a function of growing wealth. For food and drink brands in particular, it’s important to note that consumers in smaller and more remote towns tend to place a higher priority on their health, and are more likely than residents of big cities to weigh up the health impact of each item they consider buying.

Little luxuries prove attractive

Products in categories that are seen as “nice to have” or “indulgences” are growing at faster rates than essentials. While spending on items that consumers see as functional has actually declined slightly, sales of snacks, for instance, are up by 16 percent, and spending on items that relate to appearance are rising at close to 20 percent.

Shoppers’ tastes grow more sophisticated

The way products are made is becoming an increasing point of importance for consumers, who are looking to artisanal goods to provide both higher standards of quality and a point of difference that mass-produced goods can’t offer. At the same time, there’s been a rise in the use of specialty stores, which are being visited 30 percent more frequently than a year ago. Specialty stores are the fastest-growing retail format in the country when it comes to spending levels, attracting 13 percent more of shoppers’ money than a year ago.

Moments really matter

There are many opportunities for brands to find a way into people’s lives, even if an individual already has a favored brand in their category, by focusing on distinct moments of consumption. In the coffee category, for example, a household might opt for a brand that broadly meets the needs of everyone in the house for their breakfast coffee. But for a mid-morning pick-me-up or drink in the office, individuals might consider something that meets their own unique preferences, and when sharing a coffee with friends, there could be yet another brand of choice. Brands need to choose their moments.

There’s a new world of celebrity

Stars of music and television have always been closely linked to brand communication; in fact, the presence of celebrities in advertising has traditionally been higher in Indonesia than in most other countries in the world. Their continued prominence comes down to one reason – they have a significant influence on what consumers buy. But now there are new circles of influence, led by self-made stars of social media. Local beauty bloggers Nanda Arsyinta and Indira Kalistha, for instance, regularly attract over 200 million views for their videos. The right celebrity match for a brand is never a matter of simply choosing the person with the biggest following, but online stars’ pulling power is not to be underestimated.  

Emphasize value for money

Shoppers from all socio-economic groups are in search of a good deal; they want to make smart decisions. That doesn’t always mean taking the cheapest option, but it does mean brands must deliver good value for money – a quality product for a reasonable and justifiable price. Sometimes the best value comes about by allowing people to customize and, in doing so, choose what they feel is worth spending on. Think here of budget airlines, and the option to pay for seat selection or other “extras”.  In other categories, such as packaged goods, getting pack sizing right is a key element of value. If a pack is too small, it’s obviously not suitable, but if it’s too big, it’s wasteful and therefore poor value.

People are thinking long-term

There’s a gradual shift away from a “live for today” mindset and growing focus on working towards long-term goals. Indonesians are saving more and taking out fewer loans, they’re investing in their children’s education, and buying financial services products such as insurance and investment funds in ever-greater numbers. They’re also investing in themselves – spending money to improve and protect their health.


Connectivity rising, usage evolving

The number of Indonesians with internet access is rising fast and is now approaching half the population. While penetration rates differ significantly between the biggest cities, smaller cities and rural locations, with rural access at less than half the rate the biggest cities, what’s consistent is the level of usage. Once people get online, they tend to spend around 2.6 hours per day connected, regardless of where they live. What differs is what they do online: city-dwellers and people who live on Java tend to spend more time-consuming entertainment, while on other islands and in rural areas, the focus is more functional, with news, research and instant messaging among the main reasons to log on.

Social media channels play different roles

While Indonesians spend more time on social media than the average for the region, they use fewer platforms, having slimmed down their selection to an average of just four per user. And they’re using each platform for different functions. YouTube has become a go-to source of news and information, while Instagram is emerging as a destination selected more often for entertainment and self-expression.

It’s getting harder to cut through ad clutter

But the rewards are bigger for those that are able to create a big impact. The rising challenge for advertisers is a function of the increasing number of brands competing for attention – and growing advertising budgets. This means that the average ad in Indonesia now needs 33 percent more money behind it to achieve the same level of cut-through as in 2013. The solution: Don’t be average! There’s still nothing like a big idea to make an impression, and Kantar research shows that campaigns with a strong central idea give purchase intent a 50 percent bigger lift than those without.

TV-centric campaigns are losing their impact

If a short TV campaign is effective, then a longer one must be even better, right? Wrong! In fact, the longer they run, the more TV campaigns lose their impact. What supercharges a TV campaign is a simultaneous digital campaign – with enough common elements to reinforce a message, but with content tailored to the strengths of each platform. The mantra here is: layer and integrate, moving from a TV-centric approach to a multi-touchpoint plan. While TV plays a powerful role in helping a brand spring to mind when a consumer thinks of a category, digital can have a deeper effect on the associations that brand has for people. Switching a small portion of TV spend to digital has been found to provide the same reach for significantly less money.

Brands are underinvesting online

It’s hard to believe, given the attention that the mobile internet gets in this country, but growth in digital adspend is starting to slow, and that’s partly due to a marketer preference for sticking with what they know – television. But it’s clear that connected consumers spend more money than those without an internet connection; more than twice as much per person, in fact. Facebook alone is often the second-highest driver of reach in Indonesia, and can reach close to two-thirds of a target audience.

But the answer is not just ‘more digital’

Bombarding consumers with digital messages on every platform they use might achieve fast, widespread reach, but it will also drive people crazy and probably backfire on the brand. Campaigns need to be timed right for the individual, and offer content that is relevant to them. The right time, place, and content are different for everyone but there are some broad rules. It’s clear, for instance, that younger people tend to be resistant to many forms of advertising, though less so for newer formats such as sponsored lenses and native ads.

Timing matters as much as content

Your ad might be brilliant, and highly appealing to your target audience, but if they’re just too busy to pay it any attention, it will be wasted. Timing, therefore, can be everything. The majority of consumers are most receptive to advertising between 6pm and 9pm, but outside that time, patterns vary considerably. In general, younger consumers are open to advertising just before 9am, when they’re waiting for classes to begin. Older people in work tend to have a spike in interest around lunchtime and on their evening commute home.

Tickle their funny bone

Men, women, young and old enjoy a good laugh, and humor has the biggest positive impact on people’s response to advertising of all attributes Kantar measures. It beats visual appeal and the presence of new information for ad receptivity, and having someone or something funny in a campaign is even more effective than the presence of a person or character that the consumer is interested in, or something intriguing in a storyline. Humor in this market tends to be light, or self-deprecating. Making fun of other people is not seen as particularly funny.

Put consumers in control

Around three-quarters of Indonesians say they feel negatively towards online advertising formats that don’t allow them to skip or that pop up without their permission. Women, in particular, are looking for an element of control. While mobile app pop-ups are liked by only a quarter of men, they’re enjoyed even less by women (18 percent say they feel positively about them). Non-skippable pre-roll video ads rate about the same for popularity, while auto-play videos in ad banners and on social media platforms are seen as less intrusive, but again rate more negatively among women.

Make it snappy
There’s a strong preference in this market for video ads that make their point fast, and then leave consumers alone. That applies even when people are enjoying ads! Asked about ads that they find relevant to them, consumers here say they prefer those that last fewer than 10 seconds. Those 10-20 seconds long are next in line, and longer ones are liked less. This general preference for shorter interruptions is a global trend, but it is felt particularly keenly in Indonesia, and is especially strong among female consumers.

Get it wrong and pay the price

There’s very low tolerance of bad ads in Indonesia; in fact, over half of people here say they skip ads whenever they can, even if it’s just by looking away or doing something else. If they’re online, they’re hovering over the “skip” button in far greater numbers than the global average, and rates of ad blocker installation are also high: 62 percent of men and 51 percent of women with internet access have blockers or have changed their settings to avoid ads, compared to 53 and 43 percent globally. When watching TV, they’re slightly more tolerant of ads, but only just. Over half say they change the channel when the ads come on, over a third use the time to do something else, and a quarter have a conversation with someone during the commercial break. Be relevant and be brief!