Social commerce in Southeast Asia: Indonesia
Indonesia is becoming an increasingly important market for companies, not just regionally but globally.
There are two main reasons for this. First off, the country's population has grown significantly in the past few decades and is projected to keep growing. As recently as the start of this century, it was estimated that Indonesia's population was around 200 million people. At its current growth rate, though, the country will have 300 million citizens by 2035.
Secondly, Indonesian wealth is growing by leaps and bounds. In 2008, only 10 million households had income over US$10k per annum. Now, in 2020, that figure is estimated to be over 30 million and growing at 5% per year.
So how can brands enter this attractive new market? One way is through leveraging social media.
But marketers often ask, do people in the country use social media for ecommerce - and if so, how - and what platforms do they use?
To find out, Econsultancy and Magento recently surveyed hundreds of consumers and marketers across Southeast Asia (SEA) and asked them about how they are using social media for commerce. Below are summary results from respondents from Indonesia, but for more on this topic, please download the full report here:
1) Indonesian consumers are spending more than you might expect online
While on the up-and-up, Indonesia's consumers still, in general, lack the purchasing power of those from other countries in the region such as Singapore and Malaysia.
Yet, when asked how much they spend online, Indonesian consumer responses indicated that they were at least in line with the region, and for higher amounts (US$100 to $250) they are over-represented compared to their peers.
This result means that marketers should be cautious of average spending figures from the country as those who do spend online spend a significant amount monthly.
2) WhatsApp and Instagram are the most important social platforms in Indonesia
In addition to understanding how consumers spend their money, marketers are also curious about where consumers spend their time. That is, what channels are popular in the country?
For Indonesians, our survey data paints quite a clear picture. Nearly every survey respondent (98%) said that they use WhatsApp daily (vs. 68% SEA) and 83% use Instagram every day (vs. 59% SEA).
This is useful data in and of itself, but respondents also provided information about how they actually use the platforms for ecommerce.
A vast majority of Indonesian consumers (82%) said they find Instagram useful for recommendations and reviews (vs. 48% SEA) and 43% indicated they use WhatsApp in a similar way (vs. 18% SEA).
Marketers should, therefore, boost support for these channels in Indonesia, regardless of how they use them in other markets.
3) Indonesian consumers need attention on social media
'Supporting' social channels, however, needs to be more than posting brand messaging.
Our survey revealed that most (85%) Indonesian consumers agree, strongly or somewhat, that brands currently 'engage positively' when they post on social media - and they will likely expect the same for any new entrants to the market.
Additionally, consumers in the country are much more likely to share information about purchases online than in SEA as a whole. When asked about which social networks they use to share purchase information only 8% replied 'none' vs. 18% across SEA.
So, marketers seeking new customers in Indonesia need to focus as much on listening to consumers as they do on delivering brand messaging.
4) Indonesian marketers may already be one step ahead of you
Moving on to the country's marketers, our survey indicated that marketers in the country are already aware of their compatriots' social media preferences - and act accordingly.
Eight in ten (80%) respondents said that their company engages on WhatsApp daily and nearly the same (76%) use Instagram every day, significantly more than marketers across the region (42%, 55% respectively).
To keep up, then, marketers intending to reach consumers in the country should plan for using the consumer's preferred channels just as frequently.
5) And they are already seeing results from their efforts
Another interesting result from our survey is that marketers in Indonesia can see that their social commerce strategies are working. In fact, nearly all (95%) agree that they can attribute online sales to social media content.
Additionally, they feel that social media is working well for their businesses overall. Nine in 10 (90%) agree that 'social media drives online sales' and not a single respondent felt that it does not.
6) Social commerce has not yet peaked in Indonesia
Finally, when asked about the future of selling on social media in the country, Indonesian marketers were overwhelmingly positive. 100% of respondents in the country said that 'social commerce will become increasingly important in the next five years'.
Marketers who want to compete for the attention of Indonesian consumers, therefore, should take note of this and plan to improve their social media presence in the country if they want to win new business in the country.
For more information about social commerce across all of SEA, please download the full report here: The State of Social Commerce in Southeast Asia.