Discover: Indonesia

16 Dec 2014|Len Henriksen

Indonesia is a country of complexities. Whilst it’s the world’s fourth most populated country with 240 million people, it’s still only 70 years old. Subsequently, it’s a nation still finding its identity and navigating evolving cultural tensions.

To understand these tensions requires a brief tour in the history of the country as a republic: two presidents governed between independence from the Dutch in 1945 and the student revolution in 1998. The first presidency was riddled with instability and inefficiency in tackling poverty. The second, under President Suharto’s reign, represented the double-edged sword that shaped Indonesia’s development over the next 30 years. President Suharto transformed Indonesia’s infrastructure by launching a series of telecommunication satellites that put them on par with China in the mid 90’s but also suppressed Islam.

After the revolution in 1998, Islam was allowed to flourish in open society, no longer just hidden behind closed doors. A collectivist culture developed which was built on strong moral principles, tradition and religion.

These recent events have shaped the cultural tensions that brands now find themselves navigating within Indonesia. It’s not that the fundamental tenets for brands have changed. It’s certainly not new or unique to Indonesia that cultural context is critical or that global brands need to both understand local culture and cultural heritage and then build this understanding into both their brands and communications to succeed. But within this rapidly evolving cultural context, brands need to work harder to remain in tune with cultural shifts, or risk failure and damage to their reputation and equity.

The L’Oréal brand Wardah has been an unfortunate casualty of these cultural shifts: it recently released a skin whitening cream that was marketed as ‘Halāl’ intended for the metropolitan Muslim demographic. But what Wardah encountered was the cultural friction between the perception of the “white as beautiful” strapline and the sentiment that if it were Halāl – meaning any object or action which is permissible to use or engage in within everyday life according to Islamic law – then it would not allude to darker skin being less attractive.

Surprisingly, Indonesia is now the world’s second largest Facebook nation and fourth largest on twitter. President Suharto’s large-scale investment in telecommunications laid the foundations for Indonesia’s booming digital sector. Indonesia is home to nearly 85 million Gen-Y and Gen-X’s and about 80% of broadband users connect via smartphones. Yet, despite this proliferation of digital access, e-commerce remains in its infancy. Brands, such as Coca-Cola have discovered that social media (which accounts for 80% of its total digital ad spend) can play a fundamental role in creating dialogue with young Indonesian consumers, but not as a point of purchase. So, Coca-Cola, like many other brands now direct their digital focus on co-creation and engagement.
However, despite the proliferation in access to technology, 56% of Indonesia’s population still live in rural areas, where traditional customs and practices remain relevant. Indonesia is one of the few markets a local soft drink brand (Teh Botol Sosro – a family owned business) outsells some of the world’s biggest giants like PepsiCo, The Coca-Cola Company and Unilever. A brand excludes more than half of the consumers within the country if it does not at least consider how best to deliver products and communications that are either tailored for and/or resonate with the rural communities.

In addition to rural vs. urban tensions, there’s a macroregional diversity to consider. The East, West and Central regions have diverse tastes and preferred brands, often linked to the origins of the people in that region. For example “your tea” is black in Western & Central Java, jasmine in Central & Eastern Java and vanilla in Sumatra. This complicates the innovation of a single-minded brand trying to appeal to disparate regional tastes with one offer.

Yet Indonesia is a market of vast opportunity, filled with a youthful exuberance. The population have yet to grow cynical about advertising; much that is seen on TV is still playful and innocent. And as it continues to find its identity at the juncture between East and West it offers exciting new opportunities for brands. For those brands willing to take the time to build relevant connections and engage with consumers, comes the reward of not just being part of the culture, but helping to shape it.

 

Written by: Len Henriksen & Emily Smith

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