Southeast Asia direct

Indonesia trumps neighbours for brand opportunities, BCG finds

By RJ Whitehead

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags Climate change Food safety Food Halal

Increasingly urbanised and upwardly mobile consumers have made Indonesia a highly attractive base for companies operating in emerging markets, despite slowing growth in most other southeast Asian economies, Boston Consulting Group has found.

A report released by the management consultant singles out Indonesia’s “young professionals​” and “modern housewives​” as being key targets for FMCG companies present in the country. 

Companies need a targeted approach that understands each group in order to apply the right points of influence for their brands​,” said Edwin Utama, a BCG partner and co-author. “Those that try to apply a one-size-fits-all approach will struggle​.” 

Vaishali Rastogi, another co-author, said Indonesia was still expanding even though it had hit some turbulence lately. 

Despite these bumps, Indonesia is still a growth story, with a consumer base that is growing larger and more economically empowered each year​,” Rastogi said. 

But growth will not be straightforward for companies. That makes it even more important to use a targeted approach and to rely on deep insights into the behaviour of shoppers in key demographic segments​. ” 

The report found that young professionals and modern housewives represented 10% of Indonesia's consumer base. In addition to buying products, these groups also strongly influenced the purchasing decisions of their friends and family members, it said. 

It also identified a lack of brand loyalty, with consumers prepared buy a range of brands from a number of food and beverage channels.

Companies that cannot break into the “consideration set​” for a given category will fail, it said. This is also the case for businesses that do not recognise the way online research has been increasingly influencing purchasing decisions, particularly among categories in which consumers like to compare products. 

Middle-class and affluent consumers were more willing to upgrade to “affordable premium​” products, including small indulgences, BCG also found.

The report concluded that Indonesia’s consumer base was growing larger and more economically empowered each year. 

Companies that identified the right demographic segments, understood the shopping habits of those consumers at a deep level, and designed targeted campaigns to win increasingly affluent consumers over would be the ones that best capitalised on this market, it said.

More stories from southeast Asia…

2.5m Filipinos at risk of hunger due to climate change by 2050

Per-capita consumption of cereals could drop by one-third and fruit and vegetables by 13% in the Philippines if climate change is left unchecked, research from the International Food Policy Research Institute predicts.


In a report, the IFPRI estimates that the number of Filipinos at risk of hunger will grow by 1.4m in 2030 and 2.5m by 2050 if measures to curb rising global temperatures fail. 

At the same time, the report estimates that the economic cost of climate change will amount to PHP186bn ($4.3bn) on average per year.

It is critical that the world community works together to develop adaptation policies to ensure that the changing climate does not undermine efforts to reduce hunger and undernutrition​,” said Mark Rosegrant, director of the environment and production technology division at IFPRI.

The large negative effects of climate change on the rest of the Philippines economy include increased international commodity prices that result in terms of trade and real exchange rate losses and reduced growth in industrial and service sectors and consumer welfare.

The study also shows that government policies and investment can dramatically reduce these impacts. Increased investment in agricultural research and irrigation to boost rice and other crop productivity growth shows significant impact in reducing the negative climate effects, it said.

Rosegrant said IFPRI was working closely with the Philippines government to assess the agricultural climate change impact on the economy while examining the impact of climate change on food production, food prices and food security.

Thailand aims to become top-five halal exporter by 2020

Thailand is planning to become one of the world’s top-five exporters of halal foods under the terms of a five-year strategic plan by its National Food Institute.


The department has set aside budget to promote halal exports and will work with SMEs to boost development in Islamic certified foods.

National Food Institute director Yongwutti Saopruek said the country wanted to break into a segment it predicted to be worth US$23tr that included chemicals, household goods, finance and garments, as well as food.

In 2014, Thailand's halal food exports were worth Bt200bn (US$5.6bn), putting the country into the world’s top 10 exporters, Yongwutti said. Over the past five years, the country's halal-food exports have been growing by 8% annually. 

The director predicted that the rapid growth of e-commerce, development of a halal certification system and the government's five-year plan to support and promote halal-food exports would combine to propel Thailand into the world’s top five halal exporters by 2020. 

Vietnam warns of rise in unlicensed food testing kits

Vietnam’s food authorities have warned that increasing numbers of unlicensed testing kits are becoming available to consumers.


The Ministry of Health food safety department said that some quick test kits were found to be fake or exaggerated their usefulness. 

It singled out the SOEKS NUC-091-1 test kit, available from and, which claimed to provide quick results on nitrate residues in fresh fruits and raw meat.

The Russian-made kit, they said, was not licensed in Vietnam, despite labelling that claimed otherwise.

As Vietnamese authorities continue to battle against longstanding levels of poor food safety compliance, consumers have been resorting to off-the-shelf testing kits and ones purchased online.

Officials often publicise cases in which samples of meat, vegetables and seafood are found to fail hygiene and quality standards. They regularly blame overuse of chemical pesticides by farmers, lax officials and a crumbling supply chain for putting consumers’ health at risk.

In a country that loses VND340bn (US$15m) through lost productivity from food poisoning each year, according to WHO estimates, health departments have been working to promote public awareness of produce safety.

Their national food safety strategy aims to see 70% of food producers and traders, 80% of officials and 70% of consumers complying with the food safety regulations by 2020.

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