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  • 1. Intelligence Applied Emerging markets Intelligence AppliedShare this Over 17,500 islands scattered across the Indian Ocean, a young and literate workforce and one of the fastest growing middle-class populations in the world: it’s not hard to see what has earned Indonesia’s status as one of the MINT countries to watch. Disposable income has been steadily rising over the last ten years, with Indonesians feeling more optimistic than ever about their financial futures. Hand in hand with rising income levels is the demand for an ever-widening pool of products, from instant coffee and smartphones, to the latest health and beauty products. One mistake that many brands make coming into Indonesia for the first time is failing to look beyond the big cities. While it’s Jakarta and Surabaya that might be seeing people spending on iPads and flashy cars, consumers in smaller towns are still hungry for new products, particularly in CPG categories. As new entrants flood into the market, the ability of brands to adapt their identities to the changing tastes, needs and aspirations of the Indonesian consumer is what will give competitive edge. So what are the most important lessons to take on board in this rich and diverse region? The reality of two working parents means families have far less time to prepare meals from scratch, instead opting to go out or to buy ready-made meals on their way home. Brands that can meet the need for ease, convenience and instant gratification will therefore find a willing audience. The fast food category is growing, with Philippine chain Jollibee Foods recently announcing plans to expand in Indonesia. The convenience culture is also booming with the popularity of hawker stalls – food vendors lining the street – while mini-marts like 7-Eleven have tapped into this by creating a blend of a supermarket with inexpensive ready-made food and seating. Youngsters will spend hours there - chatting, surfing the Internet and drinking coffee. This setting also appeals to Indonesians who are desperately lacking recreation space and looking for an alternative to the street stalls that may have been their first choice a few years ago. Women in Indonesia play a highly influential role both at home and at work. By 2025 over 70% of the female population will be employed and in control of their own incomes, creating a major opportunity for brands that can tap into this spending power and offer women their own moment of indulgence. Luxury department store, Galeries Lafayette, opened its doors to the Matriarchs, mini-marts and mobile: lessons for brands in Indonesia
  • 2. Intelligence AppliedShare this Matriarchs, mini-marts and mobile: lessons for brands in Indonesia About TNS TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and stakeholder management, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world. TNS is part of Kantar, the data investment management division of WPP and one of the world’s largest insight, information and consultancy groups. Please visit www.tnsglobal.com for more information. Indonesian market in May last year, carrying new designer labels such as Stella McCartney, Giambattista Valli and Christian Lacroix. Another department store, Lotte Shopping Avenue, with its own haul of international designers, also recently opened its first store in Jakarta. These aspirational choices don’t stop at fashion. New foreign cuisines are also making their mark, with the quality and range of French restaurants in Jakarta noticeably improving in recent years. Yet despite these Western tastes, almost 90% of Indonesia’s population is Muslim, meaning marketers must be sensitive to their dietary requirements. As in other Muslim countries, domestic consumption of alcohol is also relatively low. Some areas forbid sales of drinks with over 5% ABV, making beer by far the most popular choice among locals. When it comes to media consumption, most Indonesians are keen TV fans, with 95% of middle class households owning their own set. Yet as in other markets, smartphones are rapidly becoming the first choice for browsing the Internet or using social networks. There is already near-universal mobile penetration, while one in three new phones purchased is a smartphone. Other traditional media – including radio and newspapers – are still used, although less, and remain shadowed to some extent by the days of state- controlled media. With over 60% of Indonesia’s population being under the age of 30, many brands should be channeling a large chunk of their budgets into mobile marketing. With its rich natural resources, young population and booming middle class, Indonesia will continue to appeal to the international players. However, it is those that can identify the opportunities beyond the big cities and tap into the growing pool of cash- rich, time-poor consumers that will build the brand loyalty that supports long-term growth. If you would like to talk to us about this report, please get in touch via enquiries@tnsglobal.com or on Twitter @tns_global About the authors Nilanjan Majumdar is the Head of Qualitative, TNS Indonesia. With more than 17 years of research experience, across the Indian subcontinent, Middle East, North Africa and South East Asia, Nilanjan has worked across diverse categories and markets. He is a mathematics graduate and has an MBA in Marketing from Kolkata, India. Suresh Subramanian is Deputy Managing Director of TNS Indonesia with more than 19 years of marketing experience of which he has worked for more than 13 years in Indonesia. Suresh has substantial experience in segmentation, brand positioning, portfolio management, communication research and advanced analytics applications in consumer research.