Gary Scattergood
May 3, 2016

Indonesia: Can brands and creatives keep pace with mobile-first nation?

ON THE GROUND - INDONESIA: In the latest of our On The Ground series, we speak to brands and agencies in Indonesia as the country looks to bounce back from slower economic growth in 2015.

Indonesia: Can brands and creatives keep pace with mobile-first nation?

When taking a long-term economic view, Indonesia has enjoyed considerable successes since the Asian financial crisis of the late 1990s.

The world’s fourth most populous nation has the world’s 10th largest economy in terms of purchasing power parity, according to The World Bank.

The country’s gross national income per capita has steadily risen, from $560 in the year 2000 to $3,630 in 2014, and the poverty rate has halved since 1999, to 11.2 percent in 2015.

But in more recent years, weaker demand for commodities has seen Indonesia’s GDP slowing since 2012. Last year the figure was 4.79 percent, the lowest growth since the global financial crisis. Analysts expect it to nudge over 5 percent in 2016.

In terms of media consumption, Indonesia is another of the region’s “mobile-first” nations, likely boosted by the fact that half of the country’s 250 million people are under the age of 30 and early technology adopters. More than 80 million people are using the internet, and there are 79 million active social-media users, according to We Are Social’s Digital in 2016 report.

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This is only roughly one-third of the country’s population, suggesting there is plenty of room for growth.

Indonesia also has one of the highest Facebook penetration rates in Southeast Asia, with 78 million users this year, according to eMarketer, and Jakarta has become known as Twitter’s unofficial capital city.

Throughout this week, we’ll be taking a close look at brands, consumer trends and creativity across the country.

Our in-depth look at brands and agencies paints a picture of challenger and disrupter brands such as taxi firm Grab and courier service Go-Jek making significant inroads.

“Powered by mobile, the Indonesian market is witnessing various innovations," said Eka Sugiarto, country media head with Unilever Indonesia. "While the traditional business model remains big, their share in the future may need to be secured with the right strategy.”

The pressure is also on media and creative partners to keep up with consumer and business changes.

“The dry ice and velvet curtain ‘grand reveal’ of a traditional advertising agency is starting to look hilariously outdated,” said Rajat Basra, CEO at Omnicom Media Group Indonesia.

On Wednesday we will look at how the chaotic pace of life and consumer impatience is driving big changes, especially in Jakarta.

According to VML Indonesia’s head of digital, Piotr Jakubowski, there are growing consumer expectations around brand responses to problems and customer service. “Especially when problems or complaints arise, brands can no longer wait to provide responses, and many have beefed up their social strategies to address these issues,” he said.

Telkomsel, for example, prides itself on having built the world’s fastest Twitter customer-service team, with a response time within minutes instead of hours, he added.

“Patience is now the virtue of the dead,” stated Pradeep Harikrishnan, technical advisor at IPG Mediabrands Indonesia. A truer description for urban upper-middle-class millennials, he said, is “a generation that seeks instant gratification and is in a tearing hurry to accomplish something, be it success at work or acquiring a new gadget launched by Apple”. 

These consumers tend to shop online and avoid the pain of going out to the stores since traffic and pollution are unavoidable. “Time is a precious commodity for this generation,” Harikrishnan added.

On Thursday we will look at creativity in the country, which industry experts believe is still struggling to find its own voice.

According to Vishal Mehta, managing director at McCann Indonesia, despite having a unique and rich culture to draw on, outstanding creative work that reflects the country is “few and far between”.

“India has Bollywood," he said. "Thailand has a distinct style and the culture shows, but for some reason Indonesia’s voice hasn’t been depicted so far. The mainstream industries are also young and a bit shy of experimentation. There are traditional forms but they haven’t evolved enough to be noteworthy. And this impacts the work in advertising because advertising is part of the creative ecosystem.”

In the PR sphere, which we will look at on Friday, most agencies report healthy levels of business, even if many brands do not yet fully understand the potential of the discipline.

Ong Hock Chuan, co-founder and partner at Jakarta-based Maverick, which works with brands including Sennheiser, Dyson, Netflix, Heineken, Airbus Group and Nissan, said the PR industry in Indonesia remains lucrative and busy but adds that the sector is not necessarily progressing.

"Clients tend to be the same ones already using PR but upgrading to better firms," Chuan said. "Like most other parts of the world, there is a shift away from brands using mainstream media as a channel to get messages across to target audiences."

This has resulted in increased key-opinion-leader and community engagement, but he believes that most efforts are still stuck in using social to promote brands, with few companies understanding the dynamics between paid, earned, shared and owned media.

Don’t miss our in-depth features on Indonesia, which will run all week.


Campaign Asia

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