1. ENGAGING
INDONESIA’S
EMERGENT
MIDDLE
CLASS
ASIA NEXT

2. ASIA NEXT
A typical Indonesian mini-mart
franchise displaying promotions.
Photo: Distro42
According to a recent report by Nielsen, Indo-
nesians are predicted to earn, on average, $3,000
USD per capita by 2020, which means many global
companies have started “eyeing” the potential
expansion of their businesses in Indonesia. So, how can we reach the
Indonesian middle class? remain the highest in terms of spending outlets,
The continuous economic growth in Indonesia followed by supermarkets, with traditional
translates into the growing number of the middle- Given the many opportunities in the marketplace, retailers retaining relevance for fresh food and
class citizens. According to the World Bank, there how can retailers, manufacturers, marketers the convenience in location they offer.
are about 50 million people entering the middle- and media companies connect with Indonesia’s
income bracket with increasingly disposable middle-class consumer? Who’s Doing it Right?
incomes (from $2 in 2003 to $20 per in 2010).
Indonesia’s gross domestic product per capita is Nielsen’s report discovered that innovation has In a recent article by NYTimes.com, the mush-
now more than $3,600, exceeding that of India, proven to be the growth engine in a number of rooming trend of 7-Eleven as new hangout place
the second-largest consumer market in Asia consumer goods categories and the key to most for Indonesian consumers is an interesting
after China. middle-class spending. With an additionally case study of the changing trends in young
strong focus on value, wide opportunities for brands Indonesians and how they socialize offline. The
The majority of the Indonesian population lives to explore new innovations have been created. article found that Indonesia’s rapid economic
in the islands of Java (57.5%) and Sumatra. The growth also brought about social change as just
majority are Muslims (86%) and 71 percent of Convenience has also become an important ten short years ago, young people in Indonesia
the population is under the age of 40. Indonesia connection point for the middle class, as they gathered at street-side food stalls called warungs
boasts the 4th largest population in the world tend to visit mini-markets closest to their home to hang out and gossip.
at 248 million, making the region a promising and participate in in-store promotions. Many of
market for countless retail products targeting them are looking for attractive and interesting Currently, modern retailers such as 7-Eleven have
younger generations. promotions. In terms of shopping, mini-markets successfully changed the way young Indonesians

3. ASIA NEXT
hang out, especially in the evening. An alternative
to “warung-style” and offering better quality food
and beverages, 7-Eleven quickly brought about
a trend of fast growing retailers in Indonesia
with outlets in almost every corner of the city.
Their strategy of blending a small supermarket
with inexpensive ready-made food and seating
successfully attracted customers in a city
desperately seeking outdoor recreation space
while waiting for the mobility-restricting traffic
jams to ease.
With many of its customers under the age of thirty,
7-Eleven tapped into what Indonesians love to do
most: engage in social networking platforms. With
57,000 Twitter followers and more than 44,000
Facebook fans, 7-Eleven successfully grabbed the
attention of those who love to engage online by
providing free Wi-Fi in their outlets. For added
entertainment, the store will occasionally host
local bands with the hopes that its customers will
update their social networking statuses to help
draw bigger crowds.
Indonesians’ rising disposable incomes and strong
interest in “affordable luxury” have also made
7-Eleven stores attractive enough to draw crowds
A music group performs outside a typical 7-Eleven
from both the middle-class and nouveau riche. franchise, which has adapted to Indonesian culture
The “trendy café” is being leveraged by brand by modeling the warung.
partnerships. Apple introduced the new iPhone Photo: bigWOWO
5 to the Indonesia market in one of the 7-Eleven

4. ASIA NEXT
outlets in the suburbs. They invited people consumers. There is also an interesting trend of With all of the gadgets gaining market entry, the
through what was dubbed a “digital buzzer” to a growing awareness of political and social issues main Indonesian source for information remains
come to a designated location and witness the (unthinkable during Soeharto’s regime). This is television, with nearly all middle-class homes
introduction of the product. ever present in Millennials, who are more vocal owning a TV and 96 percent watching programs
and receptive of what’s going on with society daily. Radio and newspapers are still popular
7-Eleven is proof of how innovation has helped and government. traditional media as well, but are increasingly
create new on and offline ways for consumers being engaged via online. Advertising still plays
to connect, offering convenience and value. The Mobile penetration is already high, and purchase an important role to Indonesians in general with
retailer successfully changed the way young intent for smartphones is strong. Internet some unique TV ad approaches using “powerful
Indonesians spend their leisure time and capture usage and mobile phone ownership are surging Indonesian” slang and catchy phrases that can
their attention. at a fast pace. Smartphone devices are quickly be repeated by people on the streets and nearly
becoming the primary platform for a variety of everywhere. On example is the recent fad of “Kasih
activities, including watching videos, accessing tau ngga yaaa…” (Would I tell you… this translation
Go Online
the Internet and connecting to social networks, in is not as fun as the Indonesia version though)
Nearly a quarter of middle-class consumers turn opening channels for marketers and content
have Internet access and spend 1.5 hours a providers to focus their efforts to include mobile Therefore, the best way to engage the rising
day accessing the Internet to connect to social devices in their content distribution. Indonesian middle-class consumer is through a
network sites, with Facebook dominating their more holistic marketing mix approach including
time spent online. The potential attraction to public relations, advertising and activation
the middle-class via the digital world has been But Don’t Forget About Offline program in modern trade with a focus on value,
widespread among producers and adopted by convenience and innovation. We also need to take
nearly all brands in Indonesia. From shampoo, With the habit of visiting modern trade for their into consideration on digital approach, which
to deodorant to the ever-growing Blackberry monthly shopping, it has become very common includes social media platforms and interesting
(Edelman client) - various gimmicks, prizes for brands to conduct consumer-reaching mobile apps.
and perks draw consumers via online platforms activities in these locations. The activities can
including Facebook, Twitter and the brand/ vary from product sampling, demonstration and
company ’s owned content. With a more even games to engage the consumer in product
Sources:
demanding, time-starved, informed, and trial and point-of-sale. For example, Carrefour
choice-saturated consumer, a brand presence trained “brand representatives” also known http://blog.nielsen.com/nielsenwire/consumer/reaching-indone-
sias-middle-class/
in the digital world has been attracting more as Sales Person Girl (SPG) or Sales Person Boy
http://www.nytimes.com/2012/05/29/business/global/29i-
consumers to engage with their favorite brands. (SPB) to line up and offer various products for ht-stores29.html?pagewanted=all
consumers to sample and offer special bundle http://blog.euromonitor.com/2012/07/indonesias-rising-mid-
This approach has given brands the advan- prices for the product. This is becoming a dle-class-to-transform-the-countrys-consumer-market.html
tage of gaining insights directly from their common practice in Indonesia’s marketing mix. http://www.trendwatching.com/trends/servilebrands/