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Brands anticipate increased spending for Ramadan, despite inflation

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By Preethi Ravi, Journalist

March 20, 2023 | 9 min read

Brands and marketers are anticipating a surge in consumer spending during Ramadan this year, as the lifting of COVID restrictions brings renewed optimism to the market.

Consumers shopping during Ramadan

Brands anticipate a surge in consumer spending during Ramadan this year / Pexels

With Indonesia and Malaysia both boasting significant Muslim populations, the month of Ramadan it is an important time for Southeast Asia. This year, despite growing economic uncertainty and inflation, consumer shopping behaviour remains strong across the region.

Two-thirds (68%) of Indonesians plan to increase their budgets this Ramadan, with 60% of consumers planning to spend at least IDR 3 million - a significant increase on the previous year when just 28% planned to invest more than IDR 3 million

The figures, from InMobi’s Ramadan 2023 At A Glance Report also reveal that women will be the big-spenders during this period, as 1 in 3 women will spend more than IDR 5 million this year.

Consumers will be spending on gifts, clothing, groceries, travel tickets, and iftar, with travel peaking on the last week of Ramadan and just before Eid. Unsurprisingly, the report reveals shopping malls, clothing stores, and restaurants are the most visited areas during Ramadan.

The findings were confirmed by data from Criteo, which found that online sales in Southeast Asia increased 19% in early April 2022 compared to the last two weeks of March 2022. Sales figures continued rising during Ramadan until approximately one week before Eid across markets in the region.

Indonesia experienced the sharpest increase at 74% followed by Malaysia. Singapore consumers continued with their usual shopping habits, suggesting that their retail habits remained largely unchanged even during Ramadan.

Apparel and accessories were the top-performing product category and saw a 30% increase in sales during Ramadan. Other product categories that performed well were health & beauty, home & garden and electronics which all saw an 18% increase in retail sales right before Eid. Additionally, travel sales saw a general increase and peaked (+44%) 4 days before Eid celebrations.

Mobile phones remain the most popular platform with consumers, nearly all (98%) of Indonesian respondents use mobile to explore deals, products, and brands for Ramadan.

Rishi Bedi, managing director for Asia Pacific at InMobi, says, “Brands should consider mobile advertising, apps, and especially stores to further establish their digital presence. 56% of Indonesians have shared that in-app shopping is their most preferred mobile shopping method, primarily because of app-only discounts, ease of payments, and even free shipping.”

“While our report focuses on Indonesia, the findings are indicative of Muslim habits and preferences in Southeast Asia, making it essential for brands to consider these findings to engage with their customers effectively during Ramadan,” adds Bedi.

The Drum asked marketers how brands can leverage their activity to connect and engage with consumers during Ramadan.

Jennie Johnson, head of marketing at GrabAds

Brands can take advantage of the culturally significant practices and timings around Ramadan to better engage their brand with their customers. For example, during Sahur, families are more likely to order food in the early morning between 1-4am, just before fasting commences. According to GrabFood orders across the region grew by 201% in the time period just before Sahur during Ramadan last year. Brands can consider dayparting in order to reach fasting consumers more effectively during these demand peaks.

The month of Ramadan also marks a time of connection and get-togethers between families and friends. A recent Grab in-app survey conducted in 2022 found that 91% of respondents across Southeast Asia use online delivery services for their Ramadan food and beverage needs, with a majority noting that they do so for group orders. With Sahur or Iftar generally a communal affair, this is a prime opportunity for brands to boost sales by offering festive sets or large sharing bundles that cater to 5 pax and above.

Festive sets that include desserts like ice cream, brownies, and donuts tend to fare better during the Ramadan period. In fact, more than 500 orders of desserts were made every hour during Eid last year, according to Food and Grocery Trends 2022 report. Fried chicken, surprisingly, has cemented its place on dining tables of consumers, with our internal data recording a 23% increase in fried chicken orders in the last week of Ramadan 2022 compared to the first. It’s clear that foods representing festivity and celebration of consumers during this time, particularly as the fasting month draws to a close.

Ultimately, leveraging first-party insights is critical for brands as they build their marketing strategies for Ramadan. This will help them reach consumers at the right time and the right mindset to purchase.

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Ajay Tawde, head of Ogilvy Experience, Indonesia

Indonesia has the biggest Muslim population in the world, which means it also has the biggest Ramadan in the world. However, the pandemic has led to two big shifts in consumer relationships with brands in e-commerce.

The first shift, from channel to touchpoint, has seen e-commerce leveraged to tell elaborate brand stories and to build meaningfulness during Ramadan. In the last two years, Indomie created eCommerce-led special edition packaging targeting Ramadan.

To capitalize on this shift, brands should integrate their eCommerce touchpoints to build their brand campaign during Ramadan. Leveraging their products, packaging, official store, influencers and technology to be more meaningful to their audience’s journey during this time.

The second shift, from shopper to consumer, is reflected in the popularity of live shopping on Shopee, Lazada, Tokopedia and TikTok which has shown an ongoing re-orientation of a transactional shopper to a more involved “consumer”. Live shopping is not just about getting discounts and deals. Consumers want to show their appreciation to hosts and as well as seek expertise and advice from their hosts.

This Ramadan, brands can leverage the moments that happen within Sahur, Nggabuburit, Bukapuasa, Takjil and Tarawih to tailor your live shopping experience, types of hosts, packages and bundles.

Taranjeet Singh, managing director, South APAC at Criteo

Commerce media is now positioned as the 4th wave of digital advertising with the power to reach and engage consumers where they’re actively browsing and buying. According to Criteo’s Rise of Savvy Shopper Study, 71% of global shoppers are spending more time online searching for the best offers and values before making a purchase.

As shoppable moments can happen in nearly any environment, emerging environments such as retail media will continue gaining traction in 2023. Savvy retailers know that they will need to continue expanding their media offerings to own their end-to-end customer journey, and marketers will keep investing in retail media because it works.

Incorporating quality and loyalty programs - Despite saving money being top of mind, consumers believe that deals should not come at the expense of quality and price of well-made products. They also value the alignment with brand values and loyalty programs. Inflationary pressures are driving consumers to hunt for shopping rewards programs to cut costs in any way they can.

Blackbox-ANDA’s survey states that one of the key drivers for 44% of SEA consumers is the availability of loyalty programs that makes them prefer online shopping over traditional shopping. Retailers can tap into this by ensuring that their products are top-notch and creating loyalty programs that motivate consumers to continue purchasing from them.

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