It has been easy for marketers to overlook Indonesia–but not for much longer.
The tiny archipelago boasts a population of more than 250 million, a steadily growing economy, a burgeoning middle class, and an advertising expenditure predicted to increase by a staggering 652% by 2020, according to Adobe’s “Indonesia Market Analysis.”
Indonesia also has the highest rate of social media use in the Asia-Pacific region. And while smartphone penetration is still relatively low, 93% of smartphone owners use the Internet on their phones every day and account for 50% (and growing) of all Web page views from the country, according to the report.
Suffice to say, the island nation presents a world of opportunity for chief marketers looking to engage with consumers and improve its digital customer experience—providing they can build trust with stakeholders early on.
Coming Of Age
With more than half of its population below the age of 30, Indonesia, which just celebrated 70 years of independence, is a young country in every sense of the word. It is home to a flourishing middle class of consumers who use digital technology for communication, information, and entertainment.
Professional services firm PwC predicts Indonesia will be the fourth-largest economy in the world by 2050. It is also on track to become one of the biggest consumers of mobile advertising, according to Adobe’s analysis.
“Indonesia’s digital ad spending is still in its infancy, with a huge foreseeable growth considering its smartphone market is still maturing,” the Adobe report forecasts.
Around the globe people spend an average of just under seven hours with our gaze fixed on a screen every day–which can be any combination of smartphone, computer monitor, television, or gaming device. In Indonesia this “screen time” average is nine hours, more than any other country measured in the research.
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Adobe’s report also highlights that, as the number of smartphone users who make monthly purchases on their devices rises, trust will be the key to unlocking digital customer connection and engagement.
“Indonesians prefer shopping through social channels that allow for interaction with sellers and other customers, so that they can ask questions and receive recommendations before committing to a purchase,” it states.
While online sales currently account for only 0.7% of total sales in Indonesia, the large number of customers and projected steady growth rate of smartphone use means there is plenty of room for the online marketplace to grow.
However, digital marketers and those looking to invest should be warned that the No. 1 barrier to digital commerce in Indonesia is consumers’ wariness of purchasing fake and counterfeit products.
“Indonesians fear the authenticity of the product if purchased online–hence they research a lot,” the Adobe report states.