Indonesia’s economy presents a compelling mix of resilience and optimism. Even amidst global uncertainties, the confidence of Indonesian consumers stands out, offering potential opportunities for businesses. The 2024 IRIS Global Confidence Study, conducted in partnership with Illuminate Asia, sheds light on consumer behaviours and sentiments, providing insights into navigating this unique market.
Optimism Shapes the Market
More than half of Indonesians believe their country is on the right track. In 2024, 55% of respondents expressed optimism about the nation’s direction, far exceeding the global average of 32%. While global markets face uncertainty, only 27% of Indonesians feel the country is already in a recession—a stark contrast to gloomier global perceptions.
This confidence could be deeply rooted in cultural tendencies. Traditional values like “nerimo” (acceptance) and a strong sense of community help Indonesians see challenges as temporary. This optimism bias fosters a readiness to embrace opportunities, even in uncertain times.
For businesses, this presents an opportunity to connect with consumers through messages of growth, resilience, and shared aspirations. Illuminate Asia’s expertise in consumer research helps brands craft positive narratives that resonate with this cultural mindset, building stronger engagement.
Balancing Optimism and Financial Caution
While optimism is prevalent, financial challenges remain. Half of households report difficulties in making ends meet. Spending reductions are evident in areas such as dining out, clothing, and housing, reflecting cautious financial behaviour. However, essentials like cooking ingredients show a positive sentiment of 18%, indicating a focus on home-based solutions.
This duality requires businesses to strike a balance. Illuminate Asia’s consumer insights highlight the need for brands to offer affordable yet aspirational products. Value-for-money messaging, combined with quality assurance, will be key to gaining trust and loyalty in this market.
Digital Adoption Accelerates
Indonesia’s embrace of digital solutions continues to grow. Digital banking has seen significant adoption, with a net sentiment of +37%, reflecting increasing reliance on technology-driven financial tools. While online subscriptions face challenges, the appetite for innovation and convenience remains strong.
Businesses must prioritise digital transformation. Whether through fintech integration or enhanced e-commerce experiences, aligning with consumer digital habits is no longer optional. Companies that invest in digital-first strategies are likely to remain competitive.
Lifestyle and Health Spending Shifts
Spending priorities are shifting. Categories like dining out (-17%) and entertainment (-13%) show reduced consumer enthusiasm. At the same time, there is a growing interest in higher-quality gadgets, with 76% of respondents purchasing smartphones in 2024.
In health, reductions in spending on hospital visits and over-the-counter medication highlight changing priorities. However, preventive health services and supplements show growth potential, signalling a shift toward proactive health management.
Key Strategies for Businesses
- Leverage cultural optimism in messaging - Develop campaigns that align with the pervasive optimism bias, focusing on growth, resilience, and shared national pride. Highlight positive changes and opportunities for personal and community advancement. Engage with consumer culture experts in Illuminate Asia to understand how to explore the cultural narratives among Southeast Asian consumers.
- Offer affordable solutions with value - Address financial caution by creating affordable yet high-quality offerings, particularly in categories like FMCG essentials and personal care products.
- Tap into digital banking growth - Capitalise on the rapid adoption of digital banking by integrating fintech options into payment systems and offering rewards for digital transactions.
- Focus on home-based consumption - With reduced spending on dining out, innovate in cooking ingredients and home-based meal solutions to align with the shift toward domestic consumption.
- Promote proactive health offerings - Develop and market preventive health services, supplements, and wellness products to cater to a growing interest in proactive health management.
- Enhance quality in tech products - Emphasise durability and better features in gadgets and electronics to appeal to consumers who prioritise quality over frequent upgrades.
- Localise digital services - For struggling categories like online subscriptions, tailor offerings to local tastes and preferences, potentially bundling services with more popular options to enhance value.
Conclusion
Indonesia offers a dynamic market shaped by a mix of optimism and pragmatism. Cultural tendencies toward optimism bias, coupled with resilience and adaptability, create a rich environment for growth. For businesses, understanding these sentiments and aligning strategies to meet both emotional and practical needs is essential. The 2024 IRIS Global Confidence Study, conducted in collaboration with Illuminate Asia, provides invaluable guidance for tapping into Indonesia’s potential. By aligning with cultural values, addressing financial realities, and innovating within key growth areas, brands can thrive in this market.
About the Study
The 2024 IRIS Global Confidence Study is a comprehensive multi-country research effort designed to capture public sentiment on critical global issues, including economic outlook, healthcare confidence, and perception on climate change. Conducted across 21 countries with over 14,000 respondents, the study includes a nationally representative sample of 500 Indonesians surveyed online conducted by Illuminate Asia. This Illuminate Asia report delves into Indonesia-specific insights, comparing them with global trends and highlighting cultural nuances. The findings offer businesses actionable knowledge to navigate the complexities of the Indonesian market.
To purchase the full report or to discuss with us how we can help your business uncover insights to help support your business growth, please contact: [email protected]