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How digital tech influences Indonesian consumerism

The Indonesian consumer behaviour is being reshaped by fast-growing digital technology and connectivity, according to a recent report.

Euromonitor International, a London-based strategic market research company, released a report that breaks down the consumer trends and spending in Indonesia.

Their findings show that digital technology, connectivity and social media play an important role in how consumers make decisions.

The products and services, which Indonesian consumers spent their money on last year, were grouped into five categories: Food, beverage and tobacco; Consumer food service; Travel; Household goods; and Clothing and footwear.

Among the five, Indonesians have spent most on food, beverages and tobacco with 34%.

Notably, the research company discovered that the second and third in position, which are consumer food service and travel respectively, have posted greater growth over the last five years, as compared to others.

The company noted that the spending behaviour of Indonesians was currently shifting from product type to service type purchases.

It was observed that the increased spending on travel and consumer food services was strongly influenced by social media and the emergence of a huge number of millennials who tend to spend more on traveling.

Social media have actually influenced them on the destination of their travels. It is also important in terms of how they show off their travel experiences to their friends.

Indonesia has a demographic bonus with a high number of millennials, with roughly around 60 million people.

It contributes to the rise of spending on travel, as this segment is more interested in traveling and are more adventurous than the previous generation.

In addition, travel blogs have also inspired people to travel more. The presence of hotel and airline ticketing platforms like Traveloka has made traveling easier.

Many platforms also offer discounts that encourage people to travel.

Social media also plays a role in driving people to spend money on food services as more, especially millennials, are looking for exciting culinary experiences.

Moreover, cashless payments are one of the important developments that have helped people to spend.

This mode of payment has become more popular ever since the government kicked off its cashless society campaign last year.

Maybe cashless payments do not encourage people to spend more, but it is actually creating a unique convenience.

If cashless payments are convenient, it will influence consumers to purchase things in the long run.

According to the research company’s digital consumer data, 75% of online food service purchases have been made on smartphones.

Digital payments are expected to grow as the number of people owning smartphones is on the rise.

Meanwhile, they found out that there were three relevant megatrends that shaped Indonesian consumers’ behaviour today and they would define consumer behaviour in the future.

They are the connected consumer, premiumisation, and experience. These three were important insights for business players to formulate their business strategies to attract consumers.

Connected consumers are those who are connected to the internet and are able to access digital experiences, interactions and content.

It is estimated that 58% of households own smartphones in 2018, and this figure will grow to 78% by 2020.

Based on its global consumer trend survey on mobile phone activity in Indonesia, 84% of the people with mobile phones browse the internet while 65% visit social networking sites every day.

Furthermore, 13% use mobile phones to book or order ride-sharing services, 11% order food and drink online, and 10% buy items or services through their mobile phone every day.

Connectivity has changed almost all aspects of the consumers’ life. Hence, understanding how consumers behave in their lifestyle choices is important for successful marketing strategies.

“Premiumisation” means that, nowadays, consumers are important to premium brands. This is driven by several factors, such as the rise of a new affluent class and the surge in lifestyle spending.

It drives business players to offer better consumer services, even though they are not a branded product or service.

With the rise of a younger population with mobile connectivity, consumers are also looking for a variety of experiences. It drives many brands to offer different experiences and services to their consumers.

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