The 2018 BrandZ Top 50 Most Valuable Indonesian Brands paints a revealing picture of the country’s rapidly changing brand landscape. The environment is evolving fast because the number of brands on offer is exploding as global businesses compete with local entrants.
As a result, Indonesians are becoming more discerning in the brand choices they make. These developments mean that category penetration is no longer a surefire route to growth, especially for fast-moving consumer goods (FMCG) brands in a crowded marketplace. Successful brands are the ones that provide a compelling reason to be chosen over the competition - they must be meaningfully different. They need to meet consumer needs more effectively and offer something different that will set them apart from the competition.
But what kinds of needs do consumers want brands to fulfill? The priorities of Indonesian consumers are shifting from accumulating belongings to a new focus on seeking and sharing experiences. This is having major implications for how Indonesian consumers are spending their money. Spending on FMCG is flat as consumers instead choose to invest in experiences such as travel, eating out and entertainment. They then share their experiences, largely through mobile.
In this context, many FMCG businesses are struggling to sustain the levels of growth delivered in previous years. In 2018, the total value of the BrandZ Top 50 Most Valuable Indonesian Brands is just under $81 billion USD, representing a 13% rise compared with 2017. However, the average growth of FMCG brands in the Top 50 is only 2%. Brands in retail, banking, and telecommunications that are more naturally defined by the experiences they provide are thriving in Indonesia’s new Experience Economy. To keep pace, FMCG brands need to disrupt traditional approaches and engineer new opportunities for growth.
For FMCG brands to stay relevant, they need to provide holistic consumer experiences across multiple touchpoints. Unilever’s Bango, a local brand of kecap or sweet soy sauce, is guided by a mission to inspire consumers to discover Indonesian dishes. Large-scale events and activities, such as the Jajanan Bango food festival, help consumers to experience the brand mission in a sensorial way.
And Bango uses its online presence to help audiences to experiment with new Indonesian dishes. TV advertising supports this by romanticizing the product and the experience it delivers. This multi-touchpoint approach has fueled a 19% rise in BrandZ value in the last three years.
FMCG brands can also draw inspiration from service and lifestyle brands that proactively seek out partnerships with other businesses to elevate the customer experience. Alfamart is a fantastic example of this approach, building strategic alliances with businesses such as Go-Jek, Tokopedia and Shell. The partnership with GO-JEK, for example, allows customers to top-up their Go-Pay or exchange their Go-Points in Alfamart stores. Alfamart is building an ecosystem of services that deliver a powerful customer experience, fueling an impressive BrandZ value growth of 42% since 2015.
Indonesia’s digital unicorns Go-Jek, Traveloka, Tokopedia and Bukalapak – who entered the BrandZ Indonesia Top 50 for the first time this year with a combined value of $3.9 billion USD – follow a similar strategy to Alfamart, diversifying their services to build their role in daily life and make customers’ lives easier in the process.
Ultimately, Indonesian brands will increasingly be defined by the experiences that they deliver. The results of this year’s BrandZ report show how FMCG brands, in particular, will need to re-focus priorities to stay relevant, placing the brand experience at the heart of the marketing strategy and leveraging multiple touch-points to bring that experience to life.
Key implications for Indonesian brand builders
1) Develop a clear articulation that defines your brand experience and align all business partners behind it.
2) Place the brand experience at the heart of the marketing strategy and ensure that every consumer touch point is fully leveraged to bring this brand experience to life.
3) Create products that deliver an immediate experience – either with an instant proof of benefit or with experiential consumption and usage rituals.
4) Proactively seek out partnerships with other brands and businesses that can help to elevate the experience for your customers.
Richard McLeod, is the chief commercial officer for the insights division at Kantar Indonesia