Brands & Digital: So What’s in it for Me?
Today, Indonesia represents 40% of the total value of ASEAN’s digital economy. Therefore, with the DEFA (Digital Economy Framework Agreement), Indonesia’s digital economy is also expected to grow up to US$400 billion in 2030. This is in the context where the ASEAN’s digital economy is predicted to grow to US$330 billion in 2025, up to US$1 trillion in 2030.
The rise of digital channels opens up new opportunities for brands to reach their audience, especially in Indonesia, which is one of the fastest-growing social media users in the world. This is where the potential audience or customers are. Unlike traditional media, consumers have the freedom to choose the information they want. Brands that create a friendly environment where people feel free will provide relevant answers, bringing them closer to the brand.
Investments in digital platforms are increasing significantly and reaching unprecedented levels before the pandemic, without being expensive. Digital touchpoints are much more affordable than other marketing strategies. Since 2021/2022, consumers are spending more time in the digital world, averaging 3.28 hours per day on these platforms.
WhatsApp is the most commonly used chat platform in Indonesia, with nearly 90% of internet users actively using it. It is closely followed by other platforms owned by Meta (formerly known as Facebook). Facebook and Instagram are used by 81-85% of the country’s internet population between the ages of 16-64. Over the past four years, TikTok has seen tremendous growth in Indonesia, with its user base expanding from 35 million to now encompassing more than 44% of the population. The gap between the platforms people use and the ones they prefer is interesting to understand what they expect from brands.
Entertainment and Empathy
In terms of consumer relationships, Indonesian people seek something entertaining because the experience they have on social media helps them escape from their daily lives.
Brands must take this into account when creating their content: the more entertaining it is, the more chances they have of showing empathy with their audience: people want to feel understood in their situation. This does not exclude providing advice or inspiring suggestions, but in a playful manner.
Over time, people have become accustomed to the digital world, browsing through it more quickly, and becoming more demanding and selective. This is especially true when it comes to advertising, which should not be perceived as intrusive but rather as a form of entertainment that introduces something new.
Although inflation is lower in Indonesia compared to other countries, it encourages consumers to be more price-conscious and to consider the added value of products and brands. Advertising, just like content, cannot only be aspirational, urging people to buy more, upgrade from economy to business class, or go from being a regular customer to a priority customer by spending more, etc. Today, it is essential to be cautious in communication because the line between inspiring and making people feel that it is unattainable for them is very thin. Our surveys show that consumers do not want to spend more simply to access a more inspiring universe.
A challenging context
It is an interesting situation for marketers and advertisers, as it requires them to work harder to gain the attention, confidence, and convince consumers to choose a particular brand.
- In societal terms, we have emerged from the pandemic, and people are resuming their usual activities such as going to the cinema and shopping at malls.
- However, financially, the situation is not particularly enjoyable for people at the moment. They are not stingy, but they are more reserved with their spending, especially considering that elections tend to lead to the postponement of certain purchases.
- In terms of market offerings, there is an increasing number of players. In the beauty sector, for example, global brands like L’Oréal, Shiseido, and Maybelline face challenges from local brands offering similar products at a more affordable price point.
- In terms of communication, consumers are becoming better at deciphering brand strategies to encourage them to spend more, and they openly discuss these strategies in social media platforms.
As a result, even if we imagine a positive economic situation after the presidential election and in the coming years, growth will remain gradual but slow. Consumers’ purchasing power will not be expandable, and they will be more demanding in terms of what they choose to spend on. This raises two important questions: we can still spend like before, but do we want to spend like before? When I spend money for a brand, what’s in it for me?
Brands must reconsider their positioning and communication strategies, with two options: either play it safe and go with the flow or do something extreme to stand out by offering something truly remarkable.
This may involve investing in exceptional creativity for advertising campaigns that stand out from the competition. In both cases, marketing should be approached as a new media, considering the changing consumer landscape and expectations.
Sources:
https://asean2023.id/en/news/aseans-digital-economy-to-reach-us2-trillion-by-2030 https://oosga.com/social-media/idn/#:~:text=Indonesia%20is%20a%20major%20player,per%20day%20on%20these%20platforms https://asean2023.id/en/news/aseans-digital-economy-to-reach-us2-trillion-by-2030 https://oosga.com/social-media/idn/#:~:text=Indonesia%20is%20a%20major%20player,per%20day%20on%20 these%20platforms