Aspirational Indonesia forges ahead

Local brands take on their global rivals in this year's ranking of Indonesia's top 100 brands, evidence of a rapidly developing market.

The country most often touted as Asia’s next big emerging market boasts the highest real GDP growth of the ASEAN countries, and its economy is predicted to grow at a rate of 5.3 percent this year, above the regional average.

A population of 260 million, expanding by a further 2.9 million people every year, represents a massive opportunity for brands. That 61 percent are under 34 years old (compared to 53 percent in Asia as a whole) means attitudes are evolving fast.

“The younger-in-mindset generation is constantly seeking to experiment, to be seen, be noticed, be heard, breaking away from the leash of societal moorings, yet reining in to ensure cultural values are not maligned,” says Pradipta Roy, chief strategy officer for Bates Indonesia. “It’s an interesting tussle of ‘New Order’ versus ‘Old Order’; it is a society in a paradox of embracing change versus conforming to age-old beliefs and habits.”

Yet one thing that remains common to both young and old is an inherent spirit of ‘collectiveness’. “Indonesians believe strongly in the concept of a family — or friends — unit,” says Dhiren Amin, head of marketing, Southeast Asia, Kraft Heinz ABC. “The idea of progress is rooted in taking people along. This cultural nuance is more prominent than in other countries that are affiliative in nature too.”
Indonesian’s loyalty extends towards brands, too, whether local or foreign, in spite of the fickle, price-driven nature of the consumer market.

Big international names dominate Indonesia’s top 10 brands list in 2017, as in previous years. Samsung and Nestlé retain their first and second spots, while Apple has unseated Sony to gain third place following major efforts to meet the government’s ‘Made in Indonesia’ requirements. “In automative and tech-related categories, the preference is skewed towards foreign brands as they are synonymous with excellent quality,” says Pradeep Harikrishnan, technical advisor, IPG Mediabrands Indonesia.

Indonesian consumers are highly aspirational, confirms Jo Semidang, senior director of corporate marketing and online business, Samsung Indonesia: “Indonesian consumers aspire to become better off, financially and in terms of status. This is true for every income group; the purchasing power may differ but the need to look successful is very strong.”

In categories such as home, personal care and food and beverages, Indonesian consumers prefer and trust local to global brands, says Harikrishnan. They take pride in using them and believe that local companies truly understand Indonesian consumers and therefore provide better value for money. No surprise then that brands such as Bank Central Asia (20), airline Garuda (32) and oil and gas company Pertamina (27) are competing head-to-head with global behemoths in the top 100. The Indonesian tech start-up Traveloka is a particular local success story, entering the top 100 list for the first time in 29th position, one above Facebook.

An advantage local brands retain over global competitors is their ‘second-nature’ knowledge of Indonesian consumers. That includes acknowledging the gap in wealth and development between the capital Jakarta and much of the rest of the country, where infrastructure can be patchy and TV, rather than digital, is still a dominant platform. Another advantage is an awareness of the innate cultural environment — with 85 percent of the country identifying as Muslim, religion can be a sensitive issue, says Anne Ridwan, CEO, O&M Indonesia. “Brands need to be acutely aware of certain nuances and props that may be offensive to the people.”

This doesn’t mean that prevailing beliefs and habits cannot be challenged, and evidence suggests that advertisers should avoid playing it too safe in Indonesia. The popular notion that prescriptive advertising works is only half true, according to Amin: “Indonesian consumers react to nuances — cultural, emotional and behavioural.”

This is a uniquely valuable market, says Veronica Utami, head of marketing, Google Indonesia (13). “We are seeing the country in an unprecedented phase of growth: it is one of the fastest growing internet markets in the world —19 per cent YoY versus global average — which presents the opportunity for brands to achieve more touchpoints both to influence and to convert consumers.”

In brief

• Pizza Hut makes Indonesia's top 10 in ninth position
• Gucci (17) ranks 21 places above Indonesia's next luxury favourite, Calvin Kein
• Grab (41) is more popular than Uber (48) 
• Local tea brands SariWangi (54) amd Sasro (55) far outrank Asia's favourite tea, Lipton (248)
• Ecommerce sites Lazada (65) and native BliBli (61) trump Amazon (196)