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The Indonesian FMCG Landscape in 2020 and Beyond
The Indonesian FMCG Landscape in 2020 and Beyond
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2021
2020’s Covid:
A Tectonic Shift
Indonesia’s Covid-19 Timeline
February 2 March 2 March 11 March 15
243 Indonesian Nationals First officially confirmed First Indonesian COVID Death Past 100 confirmed
evacuated from Wuhan and cases of COVID-19 in infections
placed in Natuna Islands for Indonesia
quarantine but remain
untested due to lack of
symptoms
2
March 27 March 23 March 22 March 20
Past 1,000 confirmed First COVID makeshift Past 500 confirmed State of emergency
infections hospital (Wisma Atlet) infections declared in Jakarta and East
inaugurated Java and for offices to stop
operations
COVID Declared by Jokowi First 14-Day PSBB applied in COVID declared a National Past 5,000 confirmed
as public health emergency Jakarta Disaster by the President infections
and mandated police to
enforce large scale social
distancing policy
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May 29 May 22 April 30 April 22
Past 25,000 confirmed Jakarta PSBB ended Past 10,000 confirmed PSBB extended another
infections infections month in Jakarta
2021
June 4 June 25 June 27 Aug 5
Jakarta PSBB loosened Past 50,000 confirmed Past 100,000 confirmed Presidential Executive Order
infections infections authorizing local governments
to fine or impose social
punishment for facial mask
non-compliance & businesses
not adhering to COVID
restrictions enforceable by
police and military
Past 500,000 confirmed 2nd PSBB loosened 2nd PSBB in effect in Jakarta Past 200,000 confirmed
infections infections
3
Dec 6 Dec 16 Dec 31
1.2 Million Sinovac Vaccines Jokowi first Indonesian to Indonesia ended the year
arrived in Indonesia take the vaccine—vaccines with 743,200 confirmed
declared free for all infections and 4.9 Million of
Indonesian citizens the population tested in total
Overall, average consumer grocery spending per trip in 2020 vs 2019 is negative 7.5%
across all categories. This drop suggests the impact of the pandemic on the
Indonesian economy. The Indonesian economy is estimated to have contracted its
GDP by 2.2% in 2020 and unemployment is up nearly 2% from the past year. This
1
combined with the less documented salary cuts throughout a large portion of the
population can easily explain the lack of growth in Indonesian consumer demand for
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groceries.
1 https://www.worldbank.org/en/country/indonesia/publication/december-2020-indonesia-economic-prospects
2021
The Category
Casualties of 2020
of all categories we tracked suffered double digit
-25.2% Cosmetics
-24.7% Coffee
-23.3% Confectionaries
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-17.9% RTD Drinks
2021
The Outperformers
in 2020
The Top 5 performing categories
in 2020, showing significant growth are:
Vitamins 58.4%
5
Seasoning 41.4%
Nuts 24.3%
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Tea 8.8%
2021
Healthy & Home
Cooking: The Key
FMCG Trend of 2020
Through looking at categorical performance, even in simply the 10
listed above, we can draw clear conclusions as how consumers
have shifted their spending in 2020: an increased focus on
health, cooking at home and healthier options.
6
Both the focus on wellness combined with COVID concerns and
paranoia has resulted in an explosive 58.4% growth of the Vitamins
category in 2020. Vitamin demand across 2020 essentially
reflected consumer sentiment on the state of COVID with a strong
correlation (r=0.71)
between vitamin spending and our own COVID 19 sentiment
tracker we deployed on April 2020.
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2021
Negative Correlation Between Vitamin
Spend & Sentiment On Covid
Avg. Spend
Per Basket
IDR SENTIMENT
INDEX
40.000 -2,25
35.000 -2,3
30.000 -2,35
25.000 -2,4
PSBB 1 PSBB 2
20.000 -2,45 7
15.000 -2,55
.10
.12
.11
.4
.8
.9
.6
.3
.5
.2
.7
.1
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sentiments toward trust in authority, personal situation, covid19
situation and economic prospect.
2021
As we’ve also previously covered in a past article, home cooking
has become trend that has continued throughout 2020 as the
Seasoning category has grown 41.4% vs 2019 on average and is
the 2nd best performing category for the year while trending
upwards nearly every month in 2020.
Seasoning
Avg. Spend
Per Basket
16.500 8
15.500
14.500
13.500
12.500
11.500
10.500
.10
.12
.11
.4
.8
.9
.6
.3
.5
.2
.7
.1
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2021
This overall trend is further supported by the uptrend of other home
cooking related categories like Soy Sauce, Chili Sauce, Cooking Oil,
Egg and Processed Meat & Seafood:
Soy 24.500
Sauce 23.500
22.500
Avg. Spend
Per Basket 21.500
20.500
19.500
18.500
2020.10
2020.12
2020.11
2020.4
2020.8
2020.9
2020.6
2020.3
2020.5
2020.2
2020.7
2020.1
Chilli 13.500
13.300
Sauce 13.100
12.900
12.700
Avg. Spend
Per Basket
12.500
12.300
12.100
11.900
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11.700
11.500
2020.10
2020.12
2020.11
2020.4
2020.8
2020.9
2020.6
2020.3
2020.5
2020.2
2020.7
2020.1
2021
Cooking Oil Eggs
Avg. Spend
Per Basket
55.000 Avg. Spend
Per Basket
53.000
51.000 26.000
49.000
25.000
47.000
45.000 24.000
43.000 23.000
41.000
22.000
39.000
21.000
37.000
35.000 20.000
2020.10
2020.10
2020.12
2020.12
2020.11
2020.11
2020.4
2020.4
2020.8
2020.8
2020.9
2020.9
2020.6
2020.6
2020.3
2020.3
2020.5
2020.5
2020.2
2020.2
2020.7
2020.7
2020.1
2020.1
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Avg. Spend
Processed Per Basket
40.000
Meat &
38.000
Seafood 36.000
34.000
32.000
30.000
28.000
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2020.10
2020.12
2020.11
2020.4
2020.8
2020.9
2020.6
2020.3
2020.5
2020.2
2020.7
2020.1
2021
A survey we launched in mid-2020 highlighted this focus as many
have shifted towards starting their own F&B business to
supplement/replace lost income sources.
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demand from Lebaran) showed downtrends in 2020 while in
contrast healthy options like yogurt and nuts were on an upward
trajectory in average category spend per trip.
Avg. Spend Avg. Spend Avg. Spend
Per Basket Per Basket Per Basket
17.000
27.000
21.000
15.000
19.000
25.000
29.000
23.000
16.000
14.000
18.000
22.000
20.000
26.000
11.500
24.000
30.000
28.000
12.500
15.500
13.500
16.500
14.500
2020.1 2020.1 2020.1
11.000
17.500
21.000
31.000
16.000
41.000
15.500
19.500
16.500
14.500
18.500
17.500
17.000
26.000
36.000
46.000
15.500
16.500
15.000
16.000
14.500
14.000
2020.7 2020.7
Wafers
2020.7
2020.8 2020.8 2020.8
2020.9 2020.9 2020.9
Instant Noodle
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2021
With full distribution and a timeline to achieve herd immunity in
Indonesia still unclear, retailers and brands should expect this trend
to continue as users will continue to focus on their health as the
virus becomes more widespread. It is also likely that many
consumers have become recently educated/more aware of
nutrition and health, creating an expanded market for products
espousing such benefits with which brands and retailers should
capitalize on.
13
The trend towards home cooking will also persist as consumers will
continue to cook food at home due to its economic benefits
compared to eating out as some also pursue home cooking as an
additional income source. As raw goods will be in high demand,
producers should gear their processing, packaging and marketing
towards B2C efforts rather than their B2B efforts in supplying
traditional restaurants and F&B establishments to better gain
market share in a greatly expanded B2C market.
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2021
What Will Consumers
do in 2021?
Studies have shown that it takes on average 2 months for actions
and behaviour to become a habit and certainly we are well past that
time. We asked our panel to hear how they feel and think about how
they will approach 2021: their views on the pandemic, their
concerns on financial status, their shopping habits and more.
14
The impact of COVID has had a profound behaviour and a shift in
focus towards more risk-averse spending as consumers look like
they will focus on staying close to home, focusing on essentials
and looking for good deals as over 80% said that the pandemic
will change how they shop completely in 2021.
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2021
How Will Your
Shopping Change
In 2021?
Will focus on purchasing products on promotion/discount
86%
Will primarily stick to retailers close to home
15
82%
Will only go to stores with less people/foot traffic
To observe social distancing
77%
Will focus spending primarily on essentials
75%
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Will make fewer but bigger shopping trips
53%
2021
There is a clear shift for 2021 for both retailers and brands as
consumers are lasered in to getting good deals on essentials
primarily near their homes. Retailers must also focus on providing a
sterile shopping environment as 93% of consumers feel that mask
wearing and temperature checks are required for them to feel safe
when shopping.
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2021
How Has Your
Workflow Changed?
Unchanged & operating as normal
30%
I am on forced leave or have been let go
17
26%
I am coming in to work on an alternating shift
23%
I am fully working from home
22%
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2021
How Do You Feel
About Your Financial
Security?
Very Secure
6%
Secure 18
22%
Getting by
45%
Insecure
17%
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Very Insecure
10%
2021
With so many feeling the economic squeeze due to COVID’s impact
and its damage to the consumer’s sense of financial security, it is
no surprise that 86% of consumers have said they are going to
focus on shopping for products on sale/discount/promotion. We’ve
asked what their most preferred promotion method to be:
Consumers' Promotion
Preference during
19
COVID
Discount
33%
Cashback/Points
20%
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Getting by
19%
2021
Bulk buying pricing
11%
Bundling
9%
Voucher for the next purchase
8%
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3rd degree of contact.
2021
How Close Has
Covid Infections
Been To You?
Just heard stories from others of someone getting infected
56%
Someone in my area has been infected by COVID
22% 21
Friend of a friend has been infected by COVID
17%
Workplace colleague has been infected by COVID
12%
My family member or friend has been infected by COVID
11%
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I have been infected by COVID
3%
2021
Despite this however, Indonesians are overall still optimistic that
2021 will be the end of COVID and a return to the old normal as
70% of consumers believe that Indonesia will return to the
old normal within the next 6 months:
39%
Mid-2021
31%
After 2021
16%
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End of 2021
14%
2021
To support this sentiment, we’ve also asked consumers what they
think are the primary indicators of a return to the Old Normal:
Improving economy
17.3%
Availability of Vaccine
17.1%
Lower fatality rates
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15.7%
2021
Falling infection rates
15%
Less travel restrictions
11%
Less retailer restrictions
8.7%
Other: Remaining 24
%
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2021
Despite the vaccine’s availability being another near equal
indicator, consumers are relatively wary of them with 57% saying
they will take the vaccine and 35% being unsure. It is said that for
COVID herd immunity to be achieved, at least 75% of the
population needs to be immunized 2 . However, based on the
responses we are still at a 18% deficit to hit this threshold in
Indonesia. One of the key reasons for this is potentially the
government’s vaccine supply from Sinovac which still requires
clinical trials 3 with still no clear efficacy rate versus other vaccines
developed from the likes of Pfizer and Moderna. Perhaps this gap
can be bridged once Indonesia’s BPOM come to a conclusion with 25
its clinical trials and Indonesia can progress towards herd immunity.
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2 https://www.thejakartapost.com/news/2020/11/06/covid-19-vaccine-key-for-herd-immunity.html
3 https://www.thejakartapost.com/news/2020/12/15/bpom-to-extend-monitoring-stage-of-sinovac
vaccine-trial-for-next-three-months.html
2021
Do you still have unanswered questions
regarding Indonesian consumer
behavior for 2021?
26
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