INDONESIA'S TOP LOCAL BRANDS
Consumer confidence in Indonesia is significantly higher than in APAC as a whole, at 125 points in Q1 2019 compared to the APAC average of 117, finds Nielsen’s Global Consumer Confidence Survey. But are the country’s spenders loyal to local brands?
Overwhelmingly, the answer seems to be yes. Of the 12 local brands that appear in the top 50 of Indonesian consumers’ favourite companies, nine have risen up the ranks to take a higher position in the 2019 list than they earned in 2018, a much more positive picture than for the international brands in the market.
Some brands made just small gains. National airline Garuda Indonesia rose one rung to 43rd position — it was nominated the brand Indonesians would be most proud to work for, in a recent survey by YouGov BrandIndex; wireless firm Telkomsel rose three spots to 25 (the company is joining forces with Huawei to advance the company’s ‘Digital Indonesia’ initiative more quickly); and Bank Central Asia (BCA), the 62-year-old Indonesian bank that recently launched mobile banking and was named the country’s ‘most valuable’ brand in the latest BrandZ study by KantarMillwardBrown, climbed six places to 21, making it the highest-ranked local brand this year.
Others made more impressive leaps. Alfamart, the convenience store chain, achieved the biggest jump, rising 67 places in the list of Indonesia’s favourite brands to 23rd position, just behind BCA. “Alfamart is one of the first modern retail brands that shaped the purchasing behavior in Indonesia,” says Retna Murti, head of planning at Wunderman Thompson Indonesia. Murti cites Alfamart’s large range of products, store locations and opening hours as a contributor to its success, and says its new innovations — it was the first minimarket to offer online shopping and click-and-collect services in Indonesia — have set it apart from global rivals such as 7-Eleven and Circle K, which have largely failed to encroach on its share of the market.
Car sharing goliath Grab also moved swiftly up the charts, rising 31 places to 27th position. This may be an early reflection of the millions of dollars the company has pledged to sink into expansion in Indonesia, where revenue doubled in 2018. Plans include increasing the size of the company’s GrabFood and GrabExpress offerings.
The airline and hotel booking website Traveloka managed to hold onto the same position (31) it earnt in 2018. It has seen rapid growth since its 2013 launch, says Murti, and has recently expanded to provide lifestyle products and services such as tickets to attractions, activities, car rental and restaurant vouchers — but it will need to continue brand building in order not to fall. “The e-commerce market grows tremendously, creating fiercer competition,” says Murti. “Online travel is also growing with competition mostly from local [companies].” The “most ambitious and fierce” competitor, she says, is tiket.com, a subsidiary of another e-commerce/ market place own by Djarum Group, one of the biggest corporations in Indonesia.
Other rising local brands include Pertamina (up five places to 25), Go-Jek (up 11 places to 30), and courier firm JNE (up 12 places to 35). JNE is currently the market leader in courier services and benefits from partnerships with e-commerce giants like Shopee and Tokopedia, points out Murti - but it may face competition from Go-Jek, the 2010-founder transportation service that is now expanding to deliveries. Go-Jek’s policy of “continually experimenting across media touch points with various stories to ensure they dominate the mind space”, as Sony Nichani, managing director of FCB Jakarta, puts it, may see them soar up the list in years to come.
Familiarity partly explains these local brands continuing and increasing appeal to local people, says Nichani. “The omni-presence of these brands makes them extremely accessible across the SES in Indonesia. To their credit, though, these brands also have earned their trust by providing a consistent experience which generates a sort of virtuous cycle for them.”
Nichani says their future is unlikely to be threatened by encroaching global players. “As long as they invest in building the brand and don’t take their success for granted, it would be very difficult for a competitor to hurt these goliaths.”