2020 Consumer-insights-2020.pdf

Deloitte Consumer Insights

Dawn of the digital age in Indonesia

January 2020

Foreword 03

Dawn of the digital age 04

Deloitte Consumer Insights 06

1. Overall consumer sentiment 08

2. Spending patterns 11

2. Brand preferences and buying behaviours 13

Foreword

Over the last ve editions of the Deloitte Consumer Insights, we have observed the evolution of the Indonesian

consumer as they become more discerning about product attributes, and increasingly moved towards greater

adoption of Modern Trade and e-commerce channels.

In this sixth edition of the Deloitte Consumer Insights, we explore some of the latest consumer behaviour patterns

emerging from the results of our survey conducted during the rst quarter of 2019 across 1,500 households

through face-to-face interviews in ve major cities: Bandung, Jakarta, Makassar, Medan, and Surabaya.

We will begin by examining the overall consumer sentiment and plan for future expenditure, and observe how

they vary between the various cities. One interesting nding was that consumer sentiment and plan for future

In terms of buying channels, we observed that survey respondents utilised a diverse mix of retail channels across

the entire spectrum from Modern Trade to Traditional Trade, with Warungs maintaining their dominance as

the most preferred retail channel. Although survey respondents continue to rely on traditional media as their

preferred communication channel, we are also witnessing the growing importance of online reviews, especially for

online marketplace platforms.

Finally, we examine the e-commerce landscape in Indonesia in the context of its rising digital economy. Home to

many of Southeast Asia’s unicorns, Indonesia’s vibrant and dynamic technology start-up scene has introduced

a number of new business models to the e-commerce market, which have in turn fundamentally changed the

expectations and behaviours of the Indonesian consumer.

We hope that this report will provide you with some insights into the evolution of the Indonesia consumer, and the

As the fourth most populous economy in the world after China, India, and US, Indonesia has an estimated

population of 267 million, with this gure expected to reach 300 million by 2033

1

. The majority of this population

are also young: more than 40% of Indonesia’s population are under the age of 24, and 85% are under the age of

55 (see Figure 1)

2

For consumer companies, this demographic composition – unlike the ageing populations of many other

transactions whenever, and wherever. With Indonesia now home to ve out of nine Southeast Asian unicorn

start-ups – Bukalapak, Go-Jek, Ovo, Tokopedia, and Traveloka – we are also witnessing the development of a

vibrant technology start-up scene, and accompanying higher consumer expectations for digital journeys with the

proliferation of mobile application solutions designed to enrich every step of a digital customer journey.

1 "Inter-census Population Survey 2015”. Central Bureau of Statistics. https://www.bps.go.id

2 "Inter-census Population Survey 2015”. Central Bureau of Statistics. https://www.bps.go.id

65 and above

0-14

15-24

25-54

55-64

By 2020, urban consumers will account for about 57% of Indonesia’s total population

3

. These consumers are likely

instance, they tend to be more digitally savvy, and have higher expectations for customer and service levels. They

are also likely to spend more on necessities as well as discretionary items, such as travel, welfare, and leisure

items on a per capita basis, and prioritise convenience, with a greater reliance on Modern Trade outlets and

However, with greater urbanisation and migration to urban centres, several urban-specic challenges are also

beginning to pose challenges for many consumer companies. These include the need to cope with frequent

trac congestion and oods in a megacity context, such as Jakarta, with more resilient logistics and operation

Increased focus on health and wellness

Indonesian consumers are also increasingly conscious about the way the food that they consume is produced,

opportunity has not escaped the attention of players across a variety of dierent industries: for instance, the

Indonesian ride-hailing giant, Go-Jek, has begun to oer tness classes through its mobile application platform.

Indeed, consumers are leveraging the use of technology for their health and wellness needs. App-based health

care services, for instance, are gaining widespread adoption on the back of the growth in smartphone and mobile

Internet penetration rates. In 2019 alone, Indonesian health care start-up Halodoc raised USD 100 million in

6

, while its competitor, Alodokter, raised USD 33 million

3 "Urban Population by Province”. 2010-2035. Central Bureau of Statistics. https://www.bps.go.id/statictable/2014/02/18/1276/persentase-penduduk-daerah-perkotaan-

Source: Ministry of Home Aairs