Deloitte Consumer Insights
Intercepting consumer behaviour shifts in Indonesia
Indonesia, with its 247 million inhabitants, is the fourth most populous country in the world and the largest consumer market in Southeast Asia. With strong economic growth averaging 5.4% per annum over the past 13 years, and equally promising projections of continued growth over the next five years, Indonesia is expected to emerge amongst the top five largest economies by 2030. Its middle class alone is expected to grow in size by 80-90 million in the next 15 years, chalking up almost USD 1 trillion in consumption – a market that companies cannot afford to ignore.
Understanding the Indonesian consumer, their needs and preferences – now and in the foreseeable future – will be imperative to harness the opportunities in the market. In this publication, we present insights on Indonesian consumer attitudes and behaviours, leveraging on the results of Deloitte’s survey that covered 2,000 households across five major cities across the country, perspectives and analysis of Deloitte’s consumer business specialists, and our experiences working with clients in Indonesia. Our insights focus on the Indonesian consumer’s consumption patterns across income levels and consumer product categories, including the shift in spending from basic essentials to affordable luxuries, drivers of buying decisions and expectations of Local brands relative to that of Foreign brands and Private Labels.
We also share our point of view on areas that companies must consider whilst planning ahead in this evolving marketplace. Crucially, there is a need for a clear strategy to capture the increasing level of sophistication of the Indonesian consumer, whilst tailoring a product mix to cater to the varying needs and preferences of the burgeoning Lower Income and Middle Income consumers. Specific product-channel propositions must be executed to ensure that the right product reaches its target consumer. Traditional Trade will continue to play an integral role in serving the Indonesian consumer, but smaller Modern Trade formats such as Minimarkets will also feature prominently as key sales channels. These structural changes are forcing companies to reorganise and build capability internally – as well as engage closely with the trade – to drive sales growth.
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