Marketing to Indonesia’s sweet, innocent consumers
Mar 6, 2013 11:20am by Ben Bland
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Roll up, roll up. Come and flog your wares to Indonesia’s fast growing mass of “young and upcoming but sweet and innocent” middle-class consumers, which will expand from 74m people today to 140m by 2020.
That is the message from Boston Consulting Group, the latest management consultancy to issue a bullish report on the potential of Indonesia’s new consumers.
While consumers in other major emerging markets such as China and India have become more sceptical about advertising, Indonesians remain “very trusting – a bit too trusting,” according to Dean Tong, a BCG partner based in Singapore.
That naivety, and the rising tide of wealth, represents a big opportunity for investors if they can work out the particular dynamics of the Indonesian market.
“Everyone knows Indonesia will be big,” said Vaishali Rastogi, another BCG partner. But the challenge is working out how to serve the new middle class, who are rising on the back of Indonesia’s booming economy.
BCG’s survey of nearly 4,000 Indonesians showed the typical middle-class consumer, in addition to being somewhat credulous, is a socially-connected bargain hunter who watches a lot of TV and enjoys shopping.
Relative to their peers in China, Indonesian middle-class consumers are more likely to spend their income on functional purchases for their family like a washing machine or air conditioner, rather than big ticket status markers for themselves like iPhones and designer handbags.
This focus on the family explains why multi-personnel vehicles like the Toyota Avanza and Daihatsu Xenia dominate the car market in Indonesia.
But to succeed in the country, multinationals and local consumer companies need to do more than simply come up with products and marketing campaigns that appeal to the middle class.
Much of the expansion in the middle class will come in second and third-tier cities away from the traditional economic engine of Jakarta and the rest of the island of Java.
The number of Indonesian cities with more than 1m middle-class consumers will rise from 12 today to 22 by 2020, according to BCG, including the likes of Batam, Makassar, Semarang and Pekanbaru.
So if companies want to maintain their market reach over the next eight years, they will need to double their regional presence across this archipelago of thousands of islands.
That will require investment in supply chains and people, strategic thinking and, as more multinationals and local companies enter the consumer market despite burdensome government regulation, increasingly sharp elbows.
Roll up, roll up. Come and flog your wares to Indonesia’s fast growing mass of “young and upcoming but sweet and innocent” middle-class consumers, which will expand from 74m people today to 140m by 2020.
That is the message from Boston Consulting Group, the latest management consultancy to issue a bullish report on the potential of Indonesia’s new consumers.
While consumers in other major emerging markets such as China and India have become more sceptical about advertising, Indonesians remain “very trusting – a bit too trusting,” according to Dean Tong, a BCG partner based in Singapore.
That naivety, and the rising tide of wealth, represents a big opportunity for investors if they can work out the particular dynamics of the Indonesian market.
“Everyone knows Indonesia will be big,” said Vaishali Rastogi, another BCG partner. But the challenge is working out how to serve the new middle class, who are rising on the back of Indonesia’s booming economy.
BCG’s survey of nearly 4,000 Indonesians showed the typical middle-class consumer, in addition to being somewhat credulous, is a socially-connected bargain hunter who watches a lot of TV and enjoys shopping.
Relative to their peers in China, Indonesian middle-class consumers are more likely to spend their income on functional purchases for their family like a washing machine or air conditioner, rather than big ticket status markers for themselves like iPhones and designer handbags.
This focus on the family explains why multi-personnel vehicles like the Toyota Avanza and Daihatsu Xenia dominate the car market in Indonesia.
But to succeed in the country, multinationals and local consumer companies need to do more than simply come up with products and marketing campaigns that appeal to the middle class.
Much of the expansion in the middle class will come in second and third-tier cities away from the traditional economic engine of Jakarta and the rest of the island of Java.
The number of Indonesian cities with more than 1m middle-class consumers will rise from 12 today to 22 by 2020, according to BCG, including the likes of Batam, Makassar, Semarang and Pekanbaru.
So if companies want to maintain their market reach over the next eight years, they will need to double their regional presence across this archipelago of thousands of islands.
That will require investment in supply chains and people, strategic thinking and, as more multinationals and local companies enter the consumer market despite burdensome government regulation, increasingly sharp elbows.
Motivation for choosing this article:
ReplyDeleteI choose this article because it's about Indonesia consumer segment, especially middle-class consumer. I think the contents of this article are useful to divide consumer market segment and select target consumer segment. Although this article does not give the actual BCG matrix, there are some useful information of Indonesian consumer analyzed by BCG matrix.
It is not related to culinary cuisine but in the perspective of marketing only it's helpful to project.
Opinion of this article:
In my personal opinion this article is good. I also think the middle class is important. And this segment will be increasing more and more. Therefore when making plan or marketing communication strategy to sell cookbook in Indonesia these information is very useful and had to be considerable.