Trend watch: Indonesia is “the land of hope” in 2018

Anish Daryani
Source: WARC Exclusive, February 2018
Downloaded from WARC

Indonesia’s marketing community has many reasons to feel hopeful in 2018, including the rise of
mobile, fin-tech, content and artificial intelligence (AI).

By far, Indonesia enters 2018 with the strongest economic fundamentals in the South East Asia
region and is anticipated to see 5.3% GDP growth in 2018, according to DBS Bank.
As per GlobalWebIndex, Indonesians will spend 8 hours 51 minutes per user per day online, the
4th highest in the world behind Thailand, Philippines and Brazil.
In 2017, YouTube became the No. 1 platform in Indonesia, overtaking Facebook, and
demonstrating the love that Indonesians have for streaming video content – video content will
continue to grow in 2018, giving brands the opportunity to make meaningful connections with their
consumers.
Of the total internet population of 132.7 million, 124.8 million (94%) are active mobile internet
users – the opportunity for brands is to create unique experiences around mobile platforms and
outstanding mobile customer experience is critical in Indonesia.

In 2017, Indonesia showed signs of resurgence. With a major trend reversal from the previous five years, the
country managed to grow at a GDP per capita of 5.05%, a tad higher than 5.02% the preceding year (Bank of
Indonesia data), but slightly short of the estimated growth of 5.1%. However, there's hope – the year ended with
the lowest inflation since December 2016 at 3.25%, one of the lowest among emerging economies. Public Debt
was also the lowest among emerging markets, at sub-30% (of GDP) levels. By far, Indonesia enters 2018 with
the strongest fundamentals in the region. This, coupled with estimates by DBS that Indonesia is likely to grow by
5.3%, 2018 promises hope for businesses in Indonesia.

Hopeful about opportunity

2018 is the year of new opportunities for Indonesia. Indonesia is the proud host of the 18th Asian Games, being
held between 18th August and 2nd September 2018 in Jakarta and Palembang.

The total budget for the games is estimated at IDR 30 Trillion (US$ 2.24 billion). The Central Government has
allocated a budget of IDR 3 Trillion (USD 224 million) to prepare for the games. This includes the creation of
The Athletes Village that will house 14,500 athletes and officials in Kemayoran, Jakarta and another 3,000 will
be housed in a similar facility in the Jakabaring Sports City in Palembang.

Not only will the Games attract tourists, but many regional and home-grown brands can hope to connect with
Indonesians who will actively participate in the festivities and entertainment opportunities accompanying the
Games.

Hopeful about free movement

Indonesia has been trying to cope with its transport and infrastructure issues for a while. This led to the
emergence of home-grown ride-hailing services like Go-Jek, and regional services like Grab and Uber to help
manage the demand-supply gap for transportation. But like in every other sphere, 2018 brings hope for public
transportation as well.

The Jakarta MRT (Mass Rapid Transit) and Jakarta LRT (Light Rail Transit) are scheduled to complete phase 1
of operations in August 2018, just in time for The Asian Games.

While the public transportation overhaul gives a lease of life to the 10 million plus population of Jakarta, it also
brings hope for brands to connect with consumers in new media touchpoints offered by it – MRT and LRT
stations, branding in trains, electronic OOH, tickets, prepaid cards, and much more.

Hopeful about Fintech

Indonesia has been the hotbed for Southeast Asia's startup ecosystem. This has seen the emergence of the
country's first Billion-Dollar company, the ride-hailing app Go-Jek. In a recent development, Google invested in
the startup along with Meituan-Dianping and Temasek, valuing the company at $ 4 Billion. But new excitement
around Go-Jek goes beyond the transport and logistics solutions provided by the app. It comes from Go-Pay,
the e-wallet service offered by the app, giving it shades of Fintech.

DOKU, Indonesia's largest e-commerce payment gateway, has for long given global players like PayPal,
Mastercard and Visa a run for their money as the preferred and trusted payment solution. Their e-wallet offers
ease and safety of transactions which have benefits beyond credit cards, and can be operated ubiquitously from
ATMs, internet banking and mobile banking. They are clearly a success case study in the Fintech space in
Indonesia. And in 2018, as inflation remains low, and e-commerce brands throw more offers and freebies at
customers, their business is only going to grow.

Indonesia has over 150 Fintech companies, with digital payments grossing over $18 million in 2017. 17% of
them are lending platforms, Modalku and Investree being the major players. With the Indonesia government
following through on its e-commerce roadmap, and new regulations set in place by the Financial Services
Authority (OJK), this space brings hope for more excitement for Fintech (and e-commerce) brands.

Hopeful About Content

The Internet-Of-Things has connected the world more than ever before. The world will have 4 billion internet
users in 2018, and will spend one billion years online during the year. As per GlobalWedIndex, Indonesians will
spend 8 hours 51 minutes per user per day online, that's the 4th highest in the world, behind Thailand,
Philippines and Brazil.

In 2017, YouTube became the No. 1 platform in Indonesia, overtaking Facebook, and demonstrating the love
that Indonesians have for streaming video content. Video content will continue to grow in 2018, giving brands
the opportunity to make meaningful connections with their consumers.

However, ephemeral content has been gaining in popularity, growing by 70% in 2017 over the previous year.
Instastories on Instagram, Facebook Stories and Snapchat give users the opportunity to create fresh content
that disappears after a while.

Their popularity is on the rise, and they're expected to grow even faster in 2018. There's hope in brands making
use of ephemeral content to build stronger bonds with their followers.

Hopeful about AI
In 2018, Artificial Intelligence is likely to see more applications in everyday life – from predicting what song you'd
like to listen on Spotify, to the next movie you should watch on Netflix, or the next how-to video you should see
on YouTube. It will also get into spaces of what product to buy and when, which is your next travel destination,
or what news content is suitable for you based on your past usage. Machine Learning will customize content for
us more than ever. The opportunity for brands is to deliver personalized content by harvesting insights from
scores of data points available to them.

Customer Service is emerging to become a lot more personalized as well. As people have more frequent
conversations with brands on their websites or social media platforms, the need for brands to respond real-time
and meaningfully can't be overemphasized. This is where Chat Bots come into play, to which businesses in
Indonesia will resort to with the hope of keeping their customers and followers happy.

Hopeful about mobile

Indonesia is clearly a mobile-first (if not mobile-only) market in terms of access to the internet. Of the total
internet population of 132.7 million, 124.8 million (94%) are active mobile internet users – the opportunity for
brands is to create unique experiences around mobile platforms. Development of apps that are light and fast,
app search marketing and app search optimization will continue to happen, but PWA's (Progressive Web Apps)
– mobile sites that deliver app-like experience optimizing the hardware features of the phone – will gain in
prominence. Some e-commerce platforms and telecom operators have already been pioneers in PWAs, but
many more brands will try and deliver better customer experience (CX) on mobile.

Access to the internet through mobile has made information accessible to all. This has led to the emergence of
'micro-moments' - when a consumer instinctively reaches for their smartphones to find something – a tutorial, a
recipe, today's news events, trivia Q&A, location of a local store, price of something, reviews of a new product,
ETA and traffic situation on a map, etc. The opportunity for brands is to create native content around micro-
moments, a trend that we'll see emerge in 2018.

Hopeful about richer experiences

The next milestone for marketers is for them to create unique experiences for consumers.

With emergence of Augmented Reality (AR) and Virtual Reality (VR) technologies, brands are likely to strive to
enhance brand experiences across retail, travel and media environments.

Interactive branding merchandise, or print campaigns that tell deeper stories through engagement with mobile
devices are likely to be used more frequently through 2018. These experiential engagements will also become
valuable data collection points for brands, which can be used for remarketing.

Hopeful about post-millennials

Post-Millennials, also known as Gen Z, are the next segment brands will want to engage with. The rules for
marketing to them are likely to be very different. They are potential consumers of tomorrow – now in their late
teens, entering the job market and generating their own disposable income.
Brands will need to rethink their content strategies to cater to this Gen Z – be spontaneous and genuine, stop
exaggerating, use influencers with credibility, stand for a purpose and take actions to achieve it, and overall,
help them build their personal brand and then they may be loyal to your brand.

With over a quarter of the population below the age of 14, brands will see hope in developing a market for the
future.

Hopeful about better governance

2018 is the year of Local (regional) Elections. And the following year will see the General Elections. The
government will do everything right ahead of the citizens drawing up their report card. Media availability may
come at a premium for brands over the next two years, as political advertising will be intense during this period.
Some corporates may adopt a wait-and-watch strategy which happens ahead of most elections, since policy
decisions can impact their business.

But above everything else, there'll be hope that the government which the people of Indonesia bring to power
will stand up for progress, prosperity and development.

As per an Indonesian proverb, "Where there is sugar, there will be ants". Likewise, if there is hope in Indonesia,
there are strong reasons for it.

About the author

Anish Daryani
Founding Partner and President Director, M&C Saatchi Indonesia

Anish has had a prodigious career, landing agency leadership roles since the age of 29, and, having worked in
five countries – India, Kenya, Nigeria, Vietnam and Indonesia – he has a global outlook on business.

He was recognized as Campaign Asia's 40 Under 40 Advertising and Marketing Professionals in 2016, and was
a judge at the WARC Prize for Asian Strategy in 2017.

His views are personal.

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