This is according to the findings of a new Nielsen report into changing consumer tastes in the region up to 2020.
The Asia-wide middle-class is on track to comprise 52% of the region’s population by 2020, with the fastest emerging middle-classes hailing from Indonesia, the Philippines, Thailand, Malaysia and Singapore, according to Nielsen.
Out of Asia’s estimated US$5.3tn in new household consumption by 2020, Indonesia is at the forefront of this trend, with a middle-income segment that Nielsen expects to more than double in size by 2020.
While much focus has recently been placed on China and India, Asia’s two biggest growth engines, it looks like the emphasis must now go towards getting better acquainted with what drives and motivates Indonesian shoppers.
“Indonesians are confident about tomorrow, but they are also mindful of their budgets today,” the research company said in a statement.
“Historically, the country’s high consumer confidence scores consistently top Nielsen’s global rankings, and Indonesians typically report household budget flexibility that far exceeds the global average.”
Indonesian shopping baskets are increasingly dominated with premium products, reflecting their rising aspirations. Through analysis of 13 fast-moving consumer goods categories, Nielsen revealed almost half of the products were categorised as premium, 32% were mainstream, and 22% were value-orientated.
Around 60% of the products that make up the super-premium basket are discretionary items in categories such as chocolates, biscuits and moisturising creams, which are dominated by multinational companies.
But going premium is not about spending irresponsibly. The best way to merchandise premium categories to the discriminating Indonesian shopper is to visibly show price tags to aid comparison spending. And image counts and superior packaging are the shelf talkers that speak volumes to these consumers.
Traditional trade from small roadside vendors and food stalls holds 54% of Southeast Asia’s retail landscape, but this share is eroding. By 2020, Nielsen estimates that modern trade (rom sources like big retail chains and supermarkets will take the lead with 53% of the market.
As in almost any country in the world, Indonesian women are the key influencers in both modern and traditional trade stores. But as a newly middle-class female Indonesian consumer becomes better aware of her shopping prowess, she cares about choice, and not just price and promotions.
Smaller pack sizes and daily promotions will appeal to her, as the majority of trip missions are planned and occur daily, Nielsen found.
Winning practices will include good, better and best pricing tiers, pack-sized incentives that meet daily-shopping needs and a differentiated value proposition that sets products apart.