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Spotlight Indonesia: route to win in disruptive times

13/08/2018

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Discover the ways FMCG players can win in the market with new shopping occasions and new buyers

Discover the ways FMCG players can win in the market with new shopping occasions and new buyers

There are a number of paths a brand can take as well as major forces a brand needs to drive in order to gain new category buyers. While there is an opportunity to capitalise on the optimism amongst the consumers and their spending, FMCG players must push harder to stand out and win in order to grow their business.

On the rise

Indonesia has shown favourable performance throughout 2017, with stable inflation, improved export rates and increased funding allocated to infrastructure spending. Altogether this boosted consumers' optimism towards their savings and ability to spend, as shown in the improved consumer confidence index. Price increase continues to be one of the drivers of FMCG growth; consumers are also shopping less often for their in-home purchases. This situation means that FMCG players need to adapt to win every shopping occasion and attract new buyers to grow their business.

Consequently, building relevance becomes essential in this challenging time to engage with the consumers' necessity that drives trial to the category. Brands should be able to have a good understanding of the buyers' needs in addition to finding the best way to communicate in order to address their needs. To support recruiting new category buyers, brands need to drive three major forces:

  1. Prevalence of emerging mega trends: health & wellness, convenience and indulgence. Does that relate to the products' delivery?
  2. Push innovation within category to keep up with the evolving consumer needs. In order to survive, adaptability and agility to spot the right needs are crucial to fit into the rapidly accelerating consumer needs.
  3. Maintain affordability to cater consumers' desire to seek products that are relevant for them. Communication should be directed towards the brand's value for money proposition, and the same applies for premium products in order to justify the premium positioning.

Five pivotal paths to be the ultimate disruptor

Building meaningful brand propositions becomes more critical in this disruptive time in order to win new shoppers. That said, a number of brands have been able to gain new buyers in this disruptive situation. Kantar Worldpanel home purchase panel has identified five pivotal paths to gain new buyers:

  1. Winning middle class consumers. Middle class purchasing power is rising and it represents the biggest chunk in FMCG spending. To unlock the potential within the middle class consumers, FMCG players need to manage affordability and invest in distribution.
  2. Evolve in retail landscape. South East Asian consumers have shown dynamism when it comes to shopping. Sales through online channels managed to grow by 60% within the past five years, while traditional trade still contributes to almost half of total FMCG spend. Maximise all distribution opportunities through both conventional and new route-to-market.
  3. Getting more connected. Internet penetration in Indonesia varies between the cities and the rural areas. Also, time spent online. Along with the rapid development of connection infrastructure, internet will become more accessible and consumers will become more connected.
  4. New consumption pattern. FMCG and fresh food still dominate the consumers' share of wallet. On top of this, Indonesian shoppers also shift their household expenditure to obtain shopping experience. This is shown by the increase of expenditures for travelling, eating out and investment.
  5. Expanding experimentation. With the streams of social media exposure, Indonesian received many different information of various products and innovations. They are keen to try and love to experiment.

Click on the right side link to discover more with Kantar Worldpanel’s latest issue of Spotlight of Indonesia.

Get in touch

Venu Madhav
General Manager Indonesia

Visit the Indonesian website and download the Spotlight report

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