With a rapidly expanding economy, Indonesia has emerged as one of the fastest-growing nations in Southeast Asia. Boasting a rich cultural tapestry and a substantial population, it has captured the attention of businesses seeking to expand their reach. As one of the largest markets in the region, Indonesia presents significant opportunities for growth and expansion. With that said, Indonesian consumers are pragmatic buyers with a strong collective mindset. Marketing strategies that work in the West may not work in Indonesia unless they provide local customers a tangible benefit.
Prior to the pandemic, Indonesia already had a relatively young and digitally-savvy population with one of the world’s highest number of active Internet and social media users. The pandemic only resulted in a rapid acceleration of E-Commerce adoption and increase in the overall digital readiness. However, despite being in the digital era, the importance of traditions, trust to community and emphasis on status continue to dominate for Indonesian consumers.
If you are expanding your business in Indonesia and looking for effective ways to generate leads there you may consider contacting our team at “Lead Gen and CRM” for we have supported numerous clients with their lead generation campaigns providing them with powerful solutions, in countries such as Indonesia, Malaysia and Thailand.
Let’s take a closer look at each characteristic of the Indonesian consumer behaviour below:
1. Collective Mindset
Indonesians often prioritise collective needs and preferences over individual desires and their decision-making is based on the consensus principle. Indonesians especially often rely on recommendations from friends or family and will look at the similar buying choices of their community members. Decision making is made with the entire family’s preferences and well-being in mind. Recognising it may influence your design of the customer journey and the marketing channels you are using to influence decisions.
2. Preference to Local Products
Indonesian consumers show strong preference to Indonesian local products. According to an Ipsos Global Trends survey, 87% of Indonesian consumers are more likely to choose to buy local products than global ones. At the same time more than half of Indonesian consumers disagree that global brands make better products than local brands. This opens up an opportunity for international companies to create brands with local images and appealing Indonesian value propositions.
3. Price Sensitive
Majority of Indonesian consumers are price-conscious and often compare prices on the internet before making a purchase. They seek value for money by searching for discounts, promotions, and deals. Research on the efficiency of membership card programs has shown that Indonesian users are very price-sensitive and this impacts brand loyalty negatively as these consumers are ready to switch retailers if other alternatives provide greater benefits. Therefore, it is crucial to meticulously customise your pricing strategy by considering competitor pricing levels and implementing impactful promotional campaigns.
4. Respect for Traditions and Religion
Indonesian consumers have a deep respect for their cultural traditions and religion. Considering that Indonesia is the fourth most populated country in the world and its immensely ethnically diverse, the consumer base demonstrates multiple purchasing behaviours based on traditions: e.g., taste preferences, eating habits, important events.
Islamic religion and traditions are the most widespread as Indonesia has the largest Muslim population in the world. Therefore, Halal certification and adherence to Islamic principles are important factors for many consumers when choosing products or services.
Read more on how you can automate communication with your partners and clients during the traditional and religious holidays in Indonesia.
5. Aspirational Mindset
Indonesian consumers aspire to improve their quality of life and social status. They are increasingly seeking products and services that align with their social aspirations and provide a sense of status of financial achievement. This applies to every income group: in spite of purchasing power the need to look successful is very strong. Therefore, brands need to consider the right messaging in campaigns to resonate with each consumer group’s aspirations.
Designing the most effective communication way for your potential customers starts with building the right landing page. “Lead Gen and CRM” has a special module designed for a smooth landing page building experience with features to automatically adjust the content and style for the specific target audience, especially when you want to emphasise unique selling points.
6. Rising Online Shopping and Social Media Influence
Offline shopping channels have always been popular among Indonesian consumers. However, the coronavirus pandemic shifted the distribution channel toward online shopping that is increasing its popularity. Additionally, Indonesians are active users of social media platforms and often rely on influencers’ recommendations and reviews when making purchasing decisions. As influencers are often perceived as close friends and collective mindsets, it has a significant power of influence in Indonesia. In fact, influencer marketing may become one of the most effective channels to reach your audience in this specific country.
To Conclude,
Understanding the unique characteristics of consumer behaviour is essential to thrive in Indonesia. With a collective mindset, preference for local products, price sensitivity, respect for traditions and religion, and an aspirational mindset, Indonesian consumers have distinct priorities and values. By tailoring marketing strategies to align with these preferences and leveraging influencer marketing and impactful pricing strategies, businesses can effectively generate leads and succeed in this dynamic market. Partner with “Lead Gen and CRM” to navigate the intricacies of Indonesian consumer behaviour and unlock the potential for growth and success in this thriving market.
What's next for you?
This blog post is from our recent series of posts where we analyse consumer behaviour in South East Asian countries. Read more about customers in Malaysia, purchasing behaviour in Singapore and discover Vietnamese shoppers traits – for a deeper understanding of the target audiences in SEA countries.
