The factors that make Indonesia a unique market

We asked in-market experts for their insights into Indonesian consumers.

In 2017, what distinguishes the Indonesian consumer market from others? 

Much like almost all of Southeast Asia and, for that matter, Asia as a whole, the consumer market in Indonesia is its own blend of the past and the present, the modern and the traditional, the urge to break away from traditions and the longing to clutch on to them.

Explains Pradipta Roy, chief strategy officer, Bates Indonesia: “It is its own potpourri of a society that is lenient in the mind, yet rigid in its habits. As a people, Indonesia is very optimistic. From a brand point of view, they are ever willing to ‘giving it a try’.” At the same time, she continues, Indonesians – particularly the older generation – can be ritualistic and tend to avoid breaking routines. Attitudes are evolving fast, however. “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. As a nation, Indonesia is very young in age when it comes to population skew. 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.”

One thing that remains common to young and the 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, KraftHeinz ABC. “The idea of progress is rooted in taking people along. This cultural nuance is more prominent than other counties that are affiliative in nature too.” As with their kin, Indonesians are fiercely loyal towards brands too. They tend to remain faithful to brands that they like, local or foreign, in spite of the extremely fickle, price-driven nature of the consumer market.

Indonesia is a “bite sized dynamo” in this respect, explains Amin. “Given that this is a consumption-driven economy, people’s desire to purchase is eternally high but their ability to purchase tends to be limited. They get around this through “bite sized” portions; pack sizes that give them access to products and brands they desire, without burning a hole in their pockets.  It is a unique behavior that drives the market.”

Adds Yasir Riaz, managing director, Starcom MediaVest Group, “Indonesian consumers will follow what is preferred by the larger group and is more popular. Most of the times people will place higher weightage on the recommendation of a friend or a relative over any other information channel.”

What cultural issues to foreign brands need to be aware of when marketing in Indonesia?

The overwhelming pluralistic nature of people in Indonesia ensures there are not many limitations to what brands can say or cannot, as long as they observe a level of ‘decency’, a sign of respect for the culture of the nation. Anne Ridwan, CEO, O&M Indonesia cautions that this includes being sensitive to religion. “Brands need to be acutely aware of certain nuances and props that may be offensive to the people. Mocking or stereotyping a certain ethnic group in communication is not always acceptable. Making fun of older people is also not well-received as Indonesians are taught to respect people who are older in age, especially parents and grandparents.”

That doesn’t mean prevailing beliefs and habits cannot be challenged. The degree of provocation is dependent on what a brand stands for, or wishes to, in the minds of the consumer – progress is what the society seeks as a whole.

Adds Ridwan, “Despite the recent events indicating the rise of the hard-core Islam, most Indonesians want to live in harmony and are tolerant with each other. They are also open and even aspire to buy global brands that don’t necessarily come from Muslim countries.”

What do advertisers need to avoid if they are to build strong brands?

Sameness and playing it safe. There is still a tendency amongst advertisers to stick to a “time-tested formulae” even though consumers have moved on from this. "Advertisers often fall into the trap of believing that Indonesia is a “literal” market. The popular notion that prescriptive advertising works is only half true," says Amin. "Indonesian consumers react to nuances – cultural, emotional and behavioral.  Brands can use this to their advantage to create memorable, effective communication.”

Sumit Dutta, country manager and chief executive, HSBC Indonesia, adds: “Avoid condescension. Do not assume that global practices can automatically be applied to Indonesia. This is a country in which the people make up their own minds on which brands are valued and which are not – just because a brand has succeeded in the West does not mean success in this market is guaranteed.”

Thinking that Jakarta represents Indonesia is the gravest mistake marketers can make. There is a huge gap in the degree of progressiveness between Jakarta and even the second, third tier cities, let alone the rural geographies. With this in mind, says Ridwan, marketers cannot ditch traditional channels completely despite the rise of digital channels. Infrastructure is not always well built in many parts of the country, and thus for mass awareness, TV is still the main medium.