Indonesia’s consumption-driven economy makes FMCG quite a lucrative business sector. Amidst changing economic landscape marked by the connectivity era, FMCG businesses are turning greater attention towards a digital strategy, as their consumers spend more and more time online. MarkPlus Insight research from the Youth, Women, and Netizen (YWN) 2014 study indicates that up to 30% youth between 15 and 34 years old in Indonesia access internet every day for up to 3 hours. An almost equal proportion of women too access internet every day for at least 3 hours, while netizens’ percentage is understandably the highest, at almost 55%.
Source: MarkPlus Insight YWN Study 2014; n=7,232 (Y=5,095; W=3,081; N=3,642)
Online presence today is must for small and big businesses alike and FMCG players are fast coming on board. Digital forms an inevitable part of the marketing mix today even though FMCG businesses seem to be struggling to define a clear role for the digital channels in use. Then there is the looming question about e-commerce and whether or not should FMCG businesses take their products online. There is little doubt on the merit in e-commerce channels, and some of the early movers are already collaborating with online retail stores or launching their own e-commerce portals.
That said, the impact of digital marketing on revenues is still difficult to evaluate. MarkPlus Insight 2014 findings from the YWN Study show that up to 60% of the women decide on toiletries, including soap, shampoo and toothpaste brands, with the help of traditional media channels such as print and TV.
While the traditional mass marketing channels are here to stay, that is not to say that FMCG brands can afford to overlook digital. Social media, emails, paid search, and SEO are ruling the marketing game today. FMCG players in Indonesia can specifically leverage on the power of social media marketing to drive consumer engagement. Social media is not limited today to creating a Facebook page or launching a Twitter handle. These platforms should be effectively utilised to have personalised, two-way communication with consumers, enhancing overall CRM.
Further, consumers today actively review and recommend products online through social media, blogs and online forums. MarkPlus Insight 2014 Survey also shows as many as 42% of netizens post reviews after making product purchases. This is another power of digital which can be constructively harnessed by brands. That makes for a useful resource to collect data on consumer preferences and their purchasing behaviour, which can also be valuable for product development.
Another key point is for FMCG brands to ensure that their digital marketing complements the traditional advertising channels. Even as the success of a digital campaign is typically evaluated by YouTube views or Facebook likes and comments, the real challenge remains of translating that buzz into greater sales and derive value from the initial spend.