Indonesia Marketing Strategy

As the fourth most populous nation in the world, with a population of 263 million, Indonesia offers a compelling opportunity for Australian brands.

5 things to consider when marketing in Indonesia

The marketing opportunity in Indonesia strengthened by a rapidly growing economy and rising middle class. According to the World Bank, 20% of Indonesians are now considered middle class, accounting for 43% of total household spending. An additional 45% of the population an aspiring group who are no longer vulnerable to poverty.

However, while the opportunity is strong, marketers will recognise that the Indonesian experience is vastly different from the Australian experience. With that in mind, here are five factors to consider when designing a marketing strategy for Indonesia.

So here are five factors that should be considered when designing a marketing campaign in Indonesia.

1. Indonesian Demographics

Consider:

Impact on positioning, messaging and targeting.

Unlike Australia and other aging nations in the Asia Pacific region, Indonesia has a young population, with nearly 60% under 30. The country is also rapidly urbanising, with more than 70% of the population expected to live in urban areas by 2030. McKinsey expects Indonesia’s consuming class to number 86 million by 2020. This urbanisation and industrialisation are expected to push Indonesia to the ranks of middle income countries.

Since the late 1960s there has been a trend toward smaller families, with the two-child family seen as typical. Only about 50% of women work, with an estimated 86% of women of working age not working outside of the home. Where both parents do work, children are frequently left in the care of grandparents. While arranged marriages are no longer the norm, families continue to play a major role in spouse selection, however divorce rates are rising.

2. Indonesian Culture and Language

Consider:

Impact on content creation or translation.

Impact on messaging, and media.

The majority of Indonesians speak the official language Bahasa Indonesia. English is not as commonly spoken in Indonesia as it is in some other South East Asian countries. In fact, only 10% of Indonesians on Facebook use English. The Indonesian education curriculum has little emphasis on English.

Indonesia is archipelago of more than 17,000 islands, with hundreds of distinct cultures, however is united by a sense of “Indonesianness”. Social hierarchy, based on age and position, is important with Indonesians showing respect to those higher in the hierarchy through their body language and word selection. As with other Asian nations, “face” is an important concept and therefore being indirect can be seen as more polite. Most activities are done in the company of others and it is common to strike up a conversation with strangers. Business is frequently conducted through social interaction rather than email or telephone communication and time is seen as “elastic” so lateness is a common occurrence.

3. Indonesian Use of Media

Consider: Impact on media plan, sales funnel and customer experience.

While there are 150 million internet users in Indonesia, this represents only 56% of the population. Most access the internet via smartphone – overwhelmingly Android - and spend an average of 8 hours 36 minutes per day online, with 3hrs 26 minutes of this spent on social media.

The most active social media platforms in Indonesia are YouTube, Facebook, WhatsApp, Instagram, and LINE. Indonesians rate as some of the highest users of these apps worldwide.

Despite this, television still remains important in Indonesia. With 97% of adults watching, television still attracts the bulk of advertising spend. However, 98% also watch video online.

Indonesia internet users are increasingly customising their experience, with 63% using adblockers. Voice search is becoming increasingly important as a consideration, as it is currently used by 48% of internet users.

4. Indonesian Buyer Behaviour

Consider:

Impact on buyer journey and user experience.

e-commerce has taken off in Indonesia, with 90% of internet users having visited an online store and 86% made a purchase online. Again mobile is dominant, with 76% of purchases being made on a phone. Lazada, Bukalapak and Tokopedia are among the most popular e-commerce sites and social e-commerce on Instagram, Facebook and WeChat is also popular.

As in other parts of Asia, social proof is important when considering a purchase, with 40% of Facebook users seeking product reviews. Instagram is an important source of inspiration for shoppers and WhatsApp for Business is being increasingly used to manage customer queries.

A Think With Google study found that there was little difference in how age or gender behaved when it came to online shopping. Most importance was the relevance of the product to the consumer.

McKinsey predicts Indonesia’s e-commerce and social commerce markets will reach $US65 million by 2020.

5. Indonesian Payment Systems

Consider:

Impact on buyer journey, user experience and customer retention.

Indonesia remains a country with a large unbanked population, with 66% do not have a bank account. Additionally, fewer than 40% of smartphone users have used a banking app. A KPMG study in 2017 found that 90% of transactions were made in cash.

Lack of online banking has not hampered the rise of e-commerce, with over 45% of women and around 30% of men buying everyday necessities such as food and groceries online.

e-wallets, which let users store money and tap electronically to make transactions, are a fiercely competitive market, with Go-Pay and Ovo leading the charge. Many users have multiple e-wallets to take advantage of cashback offers.