In Indonesia, like many consumer markets across Asia during the pandemic, everything has changed and nothing has changed.
A cursory look at the top 100 brands in the country, part of Campaign Asia-Pacific's Asia's Top 1000 Brands research, reveals a similar headline to last year’s findings: Korean electronics, led by Samsung and LG at the very top, still dominate along with global brands. Only 20 of the top 100 are local, with only one in the top 20 (BCA at 19th), even though a solid majority of the Indonesian brands listed made gains.
Yet on the other hand, a closer look at the findings and analysis from in-market observers of one of Asia’s hardest-hit markets from the pandemic reflect some distinct shifts in consumer behaviour. Many of these themes are universal. In general, brands associated with products for the home—furnishings and home appliances—as well as activities like cleaning and cooking, have been on the rise.
Ikea jumped 14 spots in the Indonesian rankings to rank 20th overall, its first top-20 ranking in the market. Favourite laundry detergent brand Rinso rose five spots this year to 38th overall. And many of the top-ranked home electronics brands in the top 20 (Samsung, LG, Panasonic, Philips, Sharp) have benefitted from a rejuvenated focus on home appliances, much like we saw in Japan.
“We have seen the world of home appliances come into extreme favour lately with consumers looking for new routines, healthier options and fun experimentations,” says Baba Hazuria, head of strategy at Iris Indonesia. “In particular the air fryer has skyrocketed in sales and usage, but importantly the spreading of airfryer memes. As they say, the hardest thing to avoid coming out of the pandemic is getting a pet, having a baby or buying an air fryer,” he jokes.
Naturally, food brands that lend themselves well to in-home cooking have also benefitted, says Mindshare Indonesia’s partner client lead Vidya Candra, who sees rejuvenation for seasoning brands like Royco, soya sauce brands like Bango as well as sales of fresh meat, fish and vegetables, which are often brand-agnostic.
Noteworthy in our survey this year was the a new food brand category around meat and meat substitutes. This addition led to local brand Golden Fiesta, which sells cooked meat portions for home recipes, surprisingly entering the rankings this year for the first time as high as 32nd, even higher than comfort food favourite IndoMie or even notable brands like GoJek and YouTube. Many of Fiesta's products, however, would not be considered healthy, and the enduring popularity of fast food like Pizza Hut and McDonald's (both in the top 20 in Indonesia) should not be overlooked. Convenience can still sometimes trump a healthy home-cooked meal.
In that regard, food retailers who were unable to pivot online fast enough had a tougher experience. Here, Candra points to the demise of leading supermarket chain Giant, which shut down this summer. Carrefour also suffered in our rankings, dropping 15 spots from 23rd overall in 2020 to 38th in 2021. In contrast, Hypermart, which prominently provides offers groceries via ecommerce sites like Shopee and Tokopedia, or via WhatsApp, rose 15 places to enter the rankings for the first time.
Candra, along with Prami Rachmiadi, partner responsible for growth at Mindshare Indonesia, says the enablers of online activities (telcos, e-retailers, online content and education, e-payments and delivery providers) have all been the biggest brand beneficiaries from new habits during the pandemic. The top-rated mobile service brands in Indonesia were Telkomsel (27th position) and Indosat (78). Visa (13) and Mastercard (25) remain the top payment brands, but online facilitators like Paypal (39) continue to move up. Delivery providers Grab (29), JNE (41) and GoJek (42) all rank in the top 50, while the new food delivery brands have surged even higher this year. Education app Ruangguru and instructional lesson provider Kelas.com have become well-known to Indonesians, while streaming content provider Netflix surged 29 spots this year to enter the top 100 at 92nd.
This does not mean, however, that business or even brand affinity comes easy for these brands. Netflix aside, the above-mentioned brands were given mixed results in our consumer ranking.
Indeed, Hazuria says the internet providers have been a hit or miss. “Our reliance of the internet has always been there but due to the pandemic our reliance on their stability is like never before," he explains. "We have seen some providers take advantage through stability, speed and strong customer support. On the other hand, certain brands missed the boat and have become the topic of many jokes. Switching across the internet brands has becoming more frequent due to the need of speed, stability and camera on signal strength.”
Speaking of all brands, Rachmiadi warns that even those will stable performance may be still very price-sensitive during the pandemic. Customers continue have high expectations. “Hence affordability and just-in-time supply and purchase experiences should be well-managed to gain the most ideal margins,” Rachmiadi says.
What did not change: Samsung and LG stay on top
K-culture, ubiquity and communication appear to the be keys leveraged by both of these brands to stay top-of-mind with Indonesians, according to observers.
With the unwavering rise of K-idol and K-drama culture in recent years in Indonesia, it’s no secret that nearly anything Korean could be a hit or reinforce emotional ties to the brands. Not only do brands like Samsung have full product collaborations with BTS and sponsored events with Blackpink (which can be a double-edged sword), but even more subtle references work.
Marcellyna Citra, business development leader of BrandWorks Jakarta, points to one of the most talked-about gagdets in Indonesia, Samsung’s newly released flip phone, for earning a fair bit of brand recognition: “There was a spike in the Google Trends keywords search of the word ‘flip’ in Indonesia, with ‘Samsung’ as the related keyword. The gadget itself had been launched in Korea a bit earlier and been featured in many K-dramas that invited audience curiosity. Aside from that, Samsung has been constantly working on its brand awareness campaign, be it on billboards or paid digital media ads,” she says.
This brand awareness has also been long in the making. “The strength of those two brands, Samsung and LG, in Indonesia is the result of long-standing communication investment, long before their high-tech product appeared,” adds Janoe Arijanto, senior advisor at Dentsu Indonesia and former CEO of Dentsu One. Their strong ranking for affinity and recognition now runs through nearly their entire robust product lines from lower to top-end products, he adds. “This complete product range makes these Korean products widely known in all segments” and with high-end technology added by Samsung, they’ve added higher value compared to others, Arijanto says.
“Samsung has really been able to hit every aspects of our daily life," adds Hazuria. "We truly are never far from a Samsung product. From the phones we use, the AC that keeps us cool, and importantly the TV to watch those addictive dramas. Samsung has really been able to tap into the everyday consumer journey with delight.”
Adapting to new circumstances is also important. LG has been establishing itself in the area of home air purifiers and sterlisation products. Now, it has also brought forward to Indonesians a mobile mini air purifier worn as a mask.
Just as important as their ubiquity, is the easy accessibility of Samsung and LG products online. “Since pre-pandemic years, Samsung already known for prioritising their online conversion optimisation, and LG soon followed,” says Mindshare’s Rachmiadi. “Both have invested much at top-of-mind awareness, hence today’s pandemic is a low hanging fruit. Consumer trusted the brands, their products are relevant with current needs, and the path to purchase is within reach of the consumers’ hands, accountable, and reliable.”
What did change: Fast fashion brands were winners
If there was clear winning category in the Indonesian brand rankings, it would be the fast-fashion retail brands. The leader is Zara, which rose 27 spots this year to place at 31st, while H&M gained 42 spots to reach 65th position. Even more impressive is online fashion retailer Zalora, which climbed 58 positions to overtake H&M at 61st overall.
“Zalora seems to be perfectly positioned to face the pandemic,” says Bayu Asmara, an independent Jakarta-based brand consultant who leads DKK Consulting. “Besides truly understanding what an online fashion retailer needs to have: product variety, easy returns, discounts; they also carry products from affordably priced yet well-known brands. As the pandemic restricts our chances of going out, many seem to turn to more affordable wear, focusing on comfort, instead of pricey clothing. No one really gets a chance to see our clothes in detail anyway.”
Accessibility and the perception of higher quality kept these retail brands top of mind alongside pandemic pricing, says Rachmiadi.
“These brands not only adapted to stronger online sales presence but also made affordable offers with price package that are familiar with the pandemic period. They also took advantage of all digital assets both on social media and other publicity platforms,” adds Dentsu advisor Arijanto.
What did change: Airlines and sugary brands were losers
To no one’s surprise, airlines suffered the worst fate as consumer brands. Air Asia was still a top 20 brand in Indonesia last year. This year, it plummeted a remarkable 130 positions to land at 149th overall. Budget competitor Lion Air suffered a similar fate, plunging 92 spots to 144th. Only full-service airline Garuda managed to stay in the top 100, dropping only four positions to 50th overall.
More surprising, however, was the fate of another top 20 brand last year, Coca-Cola, which tumbled 76 positions to land at 91st. One observer who is less surprised is Bayu Asmara. In his estimation, Coke never belonged in Indonesia’s top 20 in the first place:
Coca-cola has never truly become a daily drink for Indonesians. Not many people always have Coca-Cola in their fridge. It has mostly been perceived as a drink for special occasions. Parties, eating out. As the pandemic has put serious restrictions on these activities, Coca-Cola has become less relevant. There has also been a rise in the variety of ready-to-drink tea products in the market. Similarly sweet, these products seem to compete directly with Coca-Cola, with less perception of being unhealthy. Many people are turning to these tea-based drinks for their sugar fix.
Many others, however are foregoing their sugar fix altogether, as the pandemic has focused attention on living healthier. Asmara notes the middle and upper-middle class tend to avoid drinks that have long been perceived as the less healthier alternative, like Coca-Cola. But Arijanto points out healthier choices are becoming the norm across all segments, and beverage brands need to continuiously adapt. While the company has diversified into healthier drinks and sugarless variations, its main Coca-Cola brand remains associated with sugar water at a premium price, which Rachmiadi points out makes it a difficult sell during the pandemic. Interestingly enough, Coca-Cola-owned water and healthier beverage brand AdeS also plunged, falling out of the top 100 this year.
In this regard, Nestle is another brand that shares Coke’s challenges. Mindshare’s Candra says Nestle has been focusing on consumer awareness around health and wellness, lowering sugar levels and increasing its ad spending around nutrition and dairy brands. But like Coke, the Nestle name has a sugary legacy, and to many remains synonymous with Kit Kat, Aero, Milo and Koko Krunch. Although Nestle remains Indonesia’s top-ranked F&B brand, it slipped to sixth place from third overall last year.
Similarly, Nutella, another brand known for unhealthy amounts of ingredients like sugar and palm oil, plunged 92 positions, from 35th in 2020 to 127th in 2021. Citra sees products like Nutella facing real challenges from new local alternatives.
“In the past year, we see many new brands from SME’s in Indonesia, offering homemade jams and spread with various different USPs that big brand such as Nutella does not have," Citra says. "Less sugar, natural sweetener, coconut oil instead of palm oil, proudly local made using Bali’s cocoa, and the list goes on."
Moreover, Citra points out, the rise of social media and digital marketing has played a big role in supporting local products, since consumers are presented with the items without having to search for them in a supermarket or in a big online grocery platform, where display space tends to be reserved for the big food conglomerates.
Indeed the quiet gainers this year may be Indonesia’s local products that aren’t on our ranking at all.