2024 年印度尼西亚快速消费品展望的

IndonesiaFMCG

Outlook2024

Unveilingthetrendsand

theforecastforgrowth

Welcometo

IndonesiaFMCG

Outlook2024

01

Theshapeof

Indonesia’sFMCG

landscape

Anticipatingthetrendandaligning

brands’growthstrategy

Astablemacroeconomicsituation

Indonesiahaspostedsteadyyear-on-yearGDP

growthofaround5%overthepastfive

quarters,whileinflationhasbeencomingdown

andsettlingat2-3%.Theeconomyisshowing

resilience,makinggradualprogressratherthan

anysignificantimprovement.Theconsumer

confidenceindexhasslightlyimprovedoverthe

pastyear,stabilisingataround120.

However,theincreasingcostoflivingpost-

pandemicischallengingconsumers’purchasing

power.Tomanagetheirhouseholdbudgetthey

areprioritisingprimaryneedssuchastransport

andutilities,andholdingbackspendon

secondaryneedsliketravel,fashion,and

durablegoods.Thistrendissimilaracrossall

consumergroups,fromupperclasstolower

class.

Householdscontinuetoallocatemostoftheir

overallbudgettoFMCGandfreshfood,but

withinthattheyareadjustingtheirspending

differentlyfromoneindividualsectortoanother.

Therationalisingofspend

ZoomingintoFMCGspending,consumer

behaviourvariesfromonesectortoanother.

Forin-homepurchases,downsizingand

downtradingarethekeytrendsintheHomeCareandPersonalCaresectors,butshoppersarewillingtospendmoreintheBeautysectorwhichbringsanopportunityfor

premiumisation.Whenitcomestothepantryessentialsthatmeetshoppers’basicneeds,

valuegrowthisonlycomingfromprice

increasesasshopperscopewithinflation.IntheBabyCaresectorthereisatrendforupsizing,

asshoppersbalancehigherpricesby

purchasingabiggerpacksizetomaintainvalueformoney.

AsconsumersrationalisetheirspendingbymanagingprioritieswithinFMCGcategories,brandsneedtodevelopamoreappropriatestrategytowinshareofwallet.Brandsthatimproveaffordabilitymightbenefitfromthesituation,butacheaperpriceisnottheonly

waytowinshoppers.Thosethatcommunicateaclearjustification,deliverproductquality,andofferoptimalusagebenefitscanearnamore

premiumprice.

Inaddition,shoppersarenowbeingchallengedwithanoverwhelmingchoiceofavailable

optionsfornewproducts.Innovationisonewaytogrow,butit’svitaltoaccommodate

consumers'needsandwants.Brandsthat

deliverrelevantinnovationsarelikelytogrow

theirbuyerbasefasterthanothers.Forexample,

abeautybrandcanridethetrendofhigher

demandforsunscreenandofferextended

benefitsofprotectingandmoisturising.

Forout-of-home(OOH)purchases,volume

growthisbeingdrivenbybothsnacksand

beverages,mainlynon-dairybeverages.Thisis

likelytobeduetohigherpost-pandemic

mobilityandschoolactivity.Torecruitshoppers

forOOHoccasions,productsneedtofinda

goodfit.Somebrandsachievethisbylaunching

relevantinnovationsthatofferbothaffordability

andpracticality.Aboveall,highavailabilityis

themostcrucialfactor,giventheimpulse

purchasebehaviourexhibitedbyconsumers.

EmbracingNext-Genshoppers

AlthoughpopulationgrowthinIndonesiais

slowing,Next-Gen(millennialsandGenZ)

consumersaregainingimportanceasdecision-makerswithinhouseholds.Theyaredriving

FMCGgrowthbeyondthepriceincreasewhichcanalsogrowvolume,andtheybehave

differentlyfromtheoldergenerations.Theyare

moreopentonoveltyandwillingtotrynew

products,whichcanbeagreatopportunityforbrandstopromotetheirinnovations.Kantar

Insights’studyonGeneration360foundthatGenZconsumersarestrivingforabetter

qualityoflife,andaround78%ofthemwanttospendtimewiththeirfamily,whichsuggestsa

willingnesstospendmoreonhighqualityproductsthatsupportthisgoal.

Toreachthisgroupofshoppers,brandsand

manufacturersshouldbeabletoaccommodatedifferentneedsindifferentregions.Next-Gen

shoppersinkeycitiesmightdemandmore

convenienceandstrongavailabilityacross

channels,includingonlineandspecialty

channels.Meanwhile,shoppersinruralareas

mightbemoreopentoproductinnovations.

Forinstance,inthePantryEssentialssector,

shoppersinruralareashavemoreCookingAids

categoriesintheirshoppingbaskets,showing

theirwillingnesstoexperiment.

Inaddition,Next-Genshoppersaremore

digitallysavvythantheoldergenerations.

Reachingthemthroughdigitalmediahas

becomefundamental.Makingrelevantnoisein

digitalmediaisimportant,butoptimisingthe

righttouchpointstorecruitnewbuyersis

anotherchallenge.Almost90%ofNext-Gen

shoppersuseYouTubeastheirmaindigital

touchpoint,andmorethanhalfofFMCG

shoppersfromthisgroupuseTikTok.Finding

therightbalancetoreachtargetgroupsand

converttheirawarenesstosalesisnowthe

mainhomeworkforbrandsandmanufacturers.

FMCGoutlookfor2024

Withtheupcomingelectionin2024,

Indonesia’smacroeconomicsituationwill

becomepivotaltoconsumerspending.Sincethelastelectionyearin2019,thegovernmenthasmaintainedtheinflationrateandGDP

growthtokeepthemacroeconomicscenariosteady.Theexcitementsurroundingthe

election,combinedwithgreaterpolitical

stability,mightdrivehouseholdstofeelmoreoptimisticabouttheeconomyandoverallcostofliving,andincreaseconsumerconfidence.

Overall,weprojectamodest5%valuegrowthforIndonesia’sFMCGindustrythisyear

comparedto2023,inalignmentwiththe

expectedGDPincrease–assumingstatusquointhemarket’seconomiccondition.Growth

acrosssectorsislikelytobeslowerin2024–inparticularPantryEssentials–exceptforBabyCare,whichisprojectedtofareslightlybetter.

Whatstrategiesshouldbrandsandmanufacturersadoptfor2024?

Providevalueformoney

Duetoeconomicpressuresacrossallcohorts,shoppersneedtorationalisetheirspending.Thismeansmanufacturersmustemphasisethevalueformoneyoftheirproductstobettercompeteintoday’smarket,whichincludesofferingaffordability,orjustifyingtheprice

throughstrongpropositions.

Leveragethemobilitycomeback

Forout-of-homeconsumption,theopportunityliesinthereturnofmobilityfollowingthepandemic,andthehigherneedforpracticalityandavailability.Consumersareexhibitingimpulsepurchasebehaviour,makingitimportantforbrandstobepresentmentallyinthemoment,andphysicallyinthestore.

EngagewithNext-Genshoppers

Theyoungergenerationsholdstronggrowthpotentialintoday’smarket,duetotheirdesiretoexplorenewpurchasesthatwillhelpthemachieveabetterqualityoflifef