1、Click here or press enter for the accessibility optimised versionIndonesia FMCGOutlook 2024Unveiling the trends andthe forecast for growthClick here or press enter for the accessibility optimised versionWelcome toIndonesia FMCGOutlook 2024Click here or press enter for the accessibility optimised ver

2、sion01The shape ofIndonesias FMCGlandscapeAnticipating the trend and aligningbrands growth strategyIndonesia has posted steady year-on-year GDPgrowth of around 5%over the past fivequarters,while inflation has been coming downand settling at 2-3%.The economy is showingresilience,making gradual progre

3、ss rather thanany significant improvement.The consumerconfidence index has slightly improved over thepast year,stabilising at around 120.However,the increasing cost of living post-pandemic is challenging consumers purchasingpower.To manage their household budget theyare prioritising primary needs su

4、ch as transportand utilities,and holding back spend onsecondary needs like travel,fashion,anddurable goods.This trend is similar across allconsumer groups,from upper class to lowerclass.Households continue to allocate most of theiroverall budget to FMCG and fresh food,butwithin that they are adjusti

5、ng their spendingdifferently from one individual sector to another.A stable macroeconomic situationZooming into FMCG spending,consumerbehaviour varies from one sector to another.For in-home purchases,downsizing anddowntrading are the key trends in the HomeCare and Personal Care sectors,but shoppersa

6、re willing to spend more in the Beauty sectorwhich brings an opportunity forpremiumisation.When it comes to the pantryessentials that meet shoppers basic needs,value growth is only coming from priceincreases as shoppers cope with inflation.In theBaby Care sector there is a trend for upsizing,as shop

7、pers balance higher prices bypurchasing a bigger pack size to maintain valuefor money.As consumers rationalise their spending bymanaging priorities within FMCG categories,brands need to develop a more appropriatestrategy to win share of wallet.Brands thatimprove affordability might benefit from thes

8、ituation,but a cheaper price is not the onlyway to win shoppers.Those that communicateway to win shoppers.Those that communicatea clear justification,deliver product quality,andoffer optimal usage benefits can earn a morepremium price.In addition,shoppers are now being challengedwith an overwhelming

9、 choice of availableoptions for new products.Innovation is one wayto grow,but its vital to accommodateconsumers needs and wants.Brands thatThe rationalising of spendconsumers needs and wants.Brands thatdeliver relevant innovations are likely to growtheir buyer base faster than others.For example,a b

10、eauty brand can ride the trend of higherdemand for sunscreen and offer extendedbenefits of protecting and moisturising.For out-of-home(OOH)purchases,volumegrowth is being driven by both snacks andbeverages,mainly non-dairy beverages.This islikely to be due to higher post-pandemicmobility and school

11、activity.To recruit shoppersfor OOH occasions,products need to find agood fit.Some brands achieve this by launchingrelevant innovations that offer both affordabilityand practicality.Above all,high availability isthe most crucial factor,given the impulsepurchase behaviour exhibited by consumers.Altho

12、ugh population growth in Indonesia isslowing,Next-Gen(millennials and GenZ)consumers are gaining importance as decision-makers within households.They are drivingFMCG growth beyond the price increase whichcan also grow volume,and they behavedifferently from the older generations.They aremore open to

13、novelty and willing to try newmore open to novelty and willing to try newproducts,which can be a great opportunity forbrands to promote their innovations.KantarInsights study on Generation 360 found thatGen Z consumers are striving for a betterquality of life,and around 78%of them want tospend time

14、with their family,which suggests awillingness to spend more on high qualitywillingness to spend more on high qualityproducts that support this goal.To reach this group of shoppers,brands andmanufacturers should be able to accommodatedifferent needs in different regions.Next-Genshoppers in key cities

15、 might demand moreconvenience and strong availability acrossEmbracing Next-Gen shoppersconvenience and strong availability acrosschannels,including online and specialtychannels.Meanwhile,shoppers in rural areasmight be more open to product innovations.For instance,in the Pantry Essentials sector,sho

16、ppers in rural areas have more Cooking Aidscategories in their shopping baskets,showingtheir willingness to experiment.In addition,Next-Gen shoppers are moredigitally savvy than the older generations.Reaching them through digital media hasbecome fundamental.Making relevant noise indigital media is i

17、mportant,but optimising theright touchpoints to recruit new buyers isanother challenge.Almost 90%of Next-Genshoppers use YouTube as their main digitaltouchpoint,and more than half of FMCGshoppers from this group use TikTok.Findingthe right balance to reach target groups andconvert their awareness to

18、 sales is now themain homework for brands and manufacturers.With the upcoming election in 2024,Indonesias macroeconomic situation willbecome pivotal to consumer spending.Sincethe last election year in 2019,the governmenthas maintained the inflation rate and GDPgrowth to keep the macroeconomic scenar

19、iosteady.The excitement surrounding theelection,combined with greater politicalstability,might drive households to feel moreoptimistic about the economy and overall costof living,and increase consumer confidence.Overall,we project a modest 5%value growthfor Indonesias FMCG industry this yearcompared

20、 to 2023,in alignment with theexpected GDP increase assuming status quoin the markets economic condition.Growthacross sectors is likely to be slower in 2024 inparticular Pantry Essentials except for BabyCare,which is projected to fare slightly better.FMCG outlook for 2024What strategies should brand

21、s andmanufacturers adopt for 2024?Provide value for moneyDue to economic pressures across all cohorts,shoppers need to rationalise their spending.This means manufacturers must emphasise the value for money of their products to bettercompete in todays market,which includes offering affordability,or j

22、ustifying the pricethrough strong propositions.Leverage the mobility comebackFor out-of-home consumption,the opportunity lies in the return of mobility following thepandemic,and the higher need for practicality and availability.Consumers are exhibitingimpulse purchase behaviour,making it important f

23、or brands to be present mentally in themoment,and physically in the store.Engage with Next-Gen shoppersThe younger generations hold strong growth potential in todays market,due to their desire toexplore new purchases that will help them achieve a better quality of life for themselves andtheir famili

24、es.Securing future shoppers interest today through understanding their mediapreferences will help to unlock growth in the long run.Click here or press enter for the accessibility optimised version02FMCG SectorDynamic andShoppersResponseDe-aggregating brands strategy ineach sectorSorry,you must sign

25、up in the online version to view this content.Click here or press enter for the accessibility optimised versionFood forthoughtFMCG Outlook 2023ReportFood for thoughtID Beauty TrendReportID Home cookingReportID Festive 2023ReportClick here or press enter for the accessibility optimised versionIndonesia FMCG Outlook 2024Contact the author:Corina FajriyaniSenior Marketing MCookies 1 2 Terms 1 2 Privacy 1 2 P O W E R E D B Y