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Key takeaways

Cash is no longer king

Just a few years ago, daily transactions here all happened in cash. But the meteoric rise of smartphones has led many consumers to skip plastic credit and debit cards entirely, and move straight to electronic banking and e-money. Established banks and new financial tech companies are encouraging this, and understanding of financial services is rising as a result, opening up fresh opportunities for savings, investment and insurance services. The National Survey on Financial Literacy and Inclusion shows levels of financial understanding have risen 19 percent in the past two years.


Something funny going on?

The fact that Indonesia is a religious country that is seen as quite conservative means brands are often reluctant to use humor in their communications, but respect for traditional values doesn’t mean people don’t like a good laugh. In fact, it’s a great way to stand out in a crowded marketplace. Bukalapak’s tongue-in-cheek ad about its big sale event went viral when it gave a mock apology to employers whose workers had been distracted by such appealing discounts. And ice-cream maker Indoeskrim made consumers laugh with deliberately bad computer special effects in its ads.


Look beyond the big smoke

Brands naturally focus their distribution and communications efforts on the national capital, as the greatest concentration of consumers and spending power. But it’s important to remember that Jakarta is home to less than four percent of Indonesia’s population. Yes, it’s probably the most affluent four percent, but it’s still a tiny proportion. Broaden your horizons, tailor messaging to regional and local preferences, which – especially when it comes to food – can vary considerably. And don’t imagine people on small islands aren’t online; if anything, the more remote they are, the more precious their internet connection.


Let data do the work

Programmatic media buying allows brands to target their messages and adapt them in real time according to other factors besides the brand that might affect their willingness to buy. Pond’s, for instance, created dynamic creative for its Moist Skin campaign that was adjusted depending on whether someone was in heavy traffic or not, while Sunsilk ran a weather-dependent campaign inviting consumers to swipe right to see the effect of Sunsilk products on a woman’s hair in the sun or the rain, depending on local conditions.


Family values changing

Reverence for family bonds still pervades Indonesian culture, but the traditional view in advertising of a jolly family around the dinner table is gradually shifting to reflect evolving family roles. No longer is the mother seen only as the cook and carer; men are starting to feature more often in ads as fathers as well as providers, and children are being given a greater voice.


'Tis the season

If you’ve heard of China’s Singles Day on 11.11 each year, then get ready for Indonesia’s equivalent: Harbolnas, a relatively new but hugely popular online shopping day. Launched in 2012 and held on 12.12 each year, Harbolnas is an online shopping frenzy fueled by deep discounts and other offers, such as free delivery. In 2017, it generated IDR4.7 trillion, quadrupling sales made the same day a year earlier. Like Singles Day, it’s something brands need to be part of, while also being wary of training shoppers to delay shopping and wait for discounts.


Not just a pretty face

The beauty segment is enjoying strong growth, perhaps as a result of the selfie phenomenon; more people want to look their best more often. In fact, with 18 percent growth over two years in the value of the beauty segment, Indonesia is the fastest-growing in the region in this sector. Nail polish sales have doubled in a year, and lipsticks and masks are up by over 60 percent, fueled by local brands, often owned by music or TV stars. But there’s a new view of beauty, and being attractive is about more than just looking good. Smart brands are linking themselves to strength and ambition as well as pretty faces.


Stand on the shoulders of giants

The rise of local tech brands – in addition to the long-standing success of selected Indonesian FMCG brands – gives other brands a springboard for international acceptance by consumers, particularly in tech-related fields. Traveloka, Tokopedia and the like have paved the way; follow their path. International investors have their eyes open to Indonesian businesses and are looking for growth; investment in startups hit $3 billion last year, most of it from China.


Make it snappy

As people’s lives get busier – with longer commutes, more women working outside the home, and a desire to spend more time doing fun things – demand for convenience is soaring. Products that can help make life easier and save a bit of time are flying off shelves; ready-to-eat and ready-to-heat meals are a popular supermarket fixture, and ready-to-drink beverage sales for drinking on the go are rising by 10 percent a year. Sales of time-saving products like wet wipes, often used for babies, rocketed 31 percent in 2017. Help people either save time or save themselves a headache.


Mobile is everything (almost)

This is one of the most mobile-oriented markets in the world, with 94 percent of the time spent online happening via a mobile handset (compared to 49 percent in China and 37 percent in the US). The average Indonesian spends 3.6 hours a day on their device. This is a medium that brands overlook at their peril. However, traditional media such as TV still play a big part in people’s lives. Over a third of the total time people spend consuming media is spent watching TV or listening to the radio.


Be more sociable

Indonesians are among the heaviest users of social media on the planet, spending an average of 1.9 hours each day on it, compared to a global average of 1.5 hours. While they spend more time on it, they’re more focused than consumers in many markets on the platforms they like (they tend to use about five platforms a week, compared to an average of 10 in emerging Asian markets, and eight globally). Facebook, WhatsApp, BBM, YouTube, Instagram, Line and Facebook Messenger are the most popular. The more platforms a person is using, the more fragmented spend may have to be, but the greater the opportunity to create relevant content tailored to different platforms.


Don’t take access for granted

The use of ad blockers by internet users in Indonesia is low by world standards – just 2 percent of people have installed them on their phone or computer here, compared to 21 percent globally. Make sure your brand helps keep ad blockers at bay by being a considerate communicator. Repeated contact, irrelevant messages and contact at inappropriate times all feels like intrusion and gets people searching for ways to block all advertising.


The playing field is now level

While international brands used to have a certain cache with Indonesian consumers – and command a certain premium – this is no longer the case. Strong local brands are proving that the quality, safety and reliability that used to be synonymous with global brands can be found here at home, and there’s pride in supporting Indonesian businesses. Being foreign or being local doesn’t provide any advantage; being great at what you do, and being locally relevant is what’s important.


Be a safe haven

As more and more aspects of people’s lives move online, consumers have become increasingly aware that they are sharing significant amounts of personal information with the companies they interact with. They’re also growing wary of how that data is being used; 22 percent of Indonesians say they’re concerned about the amount of personal data companies know about them. This is lower than the global average (40 percent), but is still many millions of people. Brands that handle data respectfully and provide something beneficial in return to consumers can make this a point of meaningful difference from others in their category.


Loyalty has a local flavor

If you think a customer is loyal to your brand because they’re part of your loyalty program, think again. This is a market where it’s not uncommon for mobile users to have three SIM cards, and they use the one that’s best suited to what they’re doing right now. It’s likely that your customers are carrying not just your loyalty card, but the card for each of your competitors, too. Online loyalty schemes, linking digital payment with points earned when shopping with a range of retail and leisure partners, are taking off in Indonesia, but again they don’t necessarily mean someone’s sticking with partner brands. Savvy shoppers will pull out the card or app that suits them in a given moment.

Let robots do the talking

The highly mobile-focused Indonesian consumer is more open than most to the idea of automated services that make their life easier. Now that brands can use artificial intelligence-powered bots to make their customer service more efficient, this is great news. But beware: 15 percent of people already feel they spend too much time on their phones, and 18 percent object to the idea of a device monitoring their activity, even if it helps make their life easier. Bring in the bots, but remember the value of the human touch, give people the choice, and given them reason to trust you.


Ensure the price is right

Indonesia still has among the most frequent shoppers in the region, but consumers here are now shopping less often – instead, they’re stocking up in fewer trips, as a result of their busy lifestyles, smaller households, and the rise of the modern supermarket trade. This is not just a blip; it’s the new normal, so brands need to work harder at getting into the shopping basket, as it’s likely to be a week, rather than a day or two, until they get another chance. This makes it crucial to have the right pricing strategy.


Address middle-class concerns

Corporate social responsibility is still nascent in this market, but consumer concerns about the environment and fair business practices are growing, particularly among higher income earners. This presents brands with an opportunity to be seen as an early mover on issues that matter to them, although it remains a “nice to have” luxury for brands with a more mainstream target audience. Go-Jek’s provision of a stable and secure income for its drivers is a strong example of a social mission that resonates with consumers.


Healthy people, healthy brands

Consumers are seeking out healthier food options when they shop, as they – and the government – seek ways to improve the health of a nation suffering from rising obesity rates and the associated “lifestyle” diseases such as diabetes. Lower-sugar options are particularly hot now, and while flavored ready-to-drink beverages are stagnating, sales of bottled water are on the rise. It’s not just FMCG; universal state healthcare is being developed, so brands that are aligned with health and wellness stand to gain.


Go forth and adapt

As the region and the wider world becomes more open to “Made in Indonesia” products, services and brands, there’s never been a better time to look for opportunities beyond national boundaries. But, just as many international brands fail to take into account uniquely Indonesian cultural nuances when they arrive here, local brands need to be aware that simply doing what they do at home might not work so well elsewhere. Take a leaf out of Traveloka’s book, adapting services to the needs of consumers in new markets, while staying true to what made it such a hit at home.