Indonesia’s

Consumer Outlook
A guide through 2025

Sri Adi ( Tony)

Account Director, NielsenIQ

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 THE WORLD OF FMCG IN INDONESIA

01 02 03
Indonesia FMCG value: # of category monitored # of Indonesia FMCG
IDR 850T per year by NIQ: 124 categories player: +7500
(IDR 320T is cigarette) (traditional-modern manufacturers
retailers and household) (800 are cigarette)

04 05 06
Avg player per category: Some categories are
dominated by top 5 Some categories are
110 manufacturers per more open for new
category players with strong
market share players, whereas the top
High: >500 players/cat 5 players only have
Low: <10 players/cat (e.g., Detergent, Sanitary Napkin,
Remedy Drink, etc.) around 50% market
share
(e.g., Biscuit, Snack, Cooking Oil,
07 Cosmetics, Cologne, Candies,
etc.)
Growth vs PY:
✓ FMCG: sales value is growing, 3% vs PY
✓ FMCG: volume unit is declining, -1% vs PY

✓ Cigarette: sales value is declining, -5% vs PY

✓ Cigarette: volume stick is declining, -8% vs PY

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Indonesia GDP rate on Q3 still grow on 4.9% and Inflation running on 1.8%
...but YoY quarter trend the GDP rate showing softened trend, as well as the inflation rate.

GDP Growth (%) Annual Inflation (%)

2015-2022 2023 2024 2015-2022 2023 2024

FY 2023: 5.05

5.5
5.5
5.0
5.0
4.8 5.0 5.1 5.2 5.0 5.3 5.0 5.2 4.9 5.0 5.1 5.0 4.9
3.7
3.6
3.6 3.5
3.5
3.4
3.4
3.0
3.0 3.1
3.1 3.1
3.1
2.7 2.7
2.7 2.7 2.6
2.6 2.5
2.5
2.3
2.3
1.7 1.8
1.8
-2.1 1.7

FY FY FY FY FY FY FY FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 DEC DEC DEC DEC DEC DEC DEC DEC MAR JUN SEP DEC MAR JUN SEP DEC
15 16 17 18 19 20 21 22 23 23 23 23 24 24 24 24 15 16 17 18 19 20 21 22 23 23 23 23 24 24 24 24

Source: NIQ - BPS | Bank Indonesia

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HH consumption is the biggest contribution to economy stabilized in Q2 24
Which continued to grow at around 5%

Q3 2024 – GDP contribution by expenditure GDP expenditure growth

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2018 2019 2020 2021 2022 2023
’23 ’23 ’23 ’23 ’24 ’24 ’24 ’24
53.0% HH Consumption HH consumption

5.1 5.0 4.9 4.8 4.5 5.2 5.1 4.5 4.9 4.9 4.9
7.2% Gov. Spending 2.0

-2.6

29.7% Investment Gov. Spending

19.9
10.6
4.8 3.3 4.2 2.9 4.0 2.8
4.6
1.9
Net Export/Import*
1.4
1.7%
-4.5 -3.8

Gross-fixed Capital formation

8.4% Others 6.7 5.7 5.0 5.1
4.5 3.8 3.9 4.4 4.6 3.8 4.4
2.1

22.5% 20.7% 1.7%

-5.0
Export/GDP* Import/GDP Net export
Source: NIQ - BPS

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Monthly deflation is showing since May 2024
Lower inflation rate reflected in all industries except personal care and other services

Monthly inflation & CPI* Annual inflation by composition

Annual Sep 23 Annual Sep 24

2.0
120.0 2.3
119.7 General 1.8
120

117.7 4.2
Food, Beverages & Cigarette 2.5
116.6
1.5
1.0
Clothing & Footwear 1.2
115

1.2 1.3
Housing, Water, Electricity, and Household fuel 0.6

1.0 1.0 2.0

Equipment & Maintenance of household routes 1.1
110

0.7 Health
2.1
1.7

0.5 1.0
105
Transportation 0.9

0.1
0.1 Information, Communication and Financial services -0.2

1.6
100
0.0 Recreation, Sport and Culture 1.5

2.1
Education 1.9

2.4
95 -0.5
Restaurant 2.2
Sep-18

Sep-19

Sep-20

Sep-21

Sep-22

Sep-23

Sep-24
Jun-18

Jun-19

Jun-20

Jun-21

Jun-22

Jun-23

Jun-24
Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

Mar-23

Mar-24
Dec-17

Dec-18

Dec-19

Dec-20

Dec-21

Dec-22

Dec-23

3.7
Personal care and Other services 6.2

-2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

*CPI index to Dec 2017

Source: NIQ - BPS | Bank Indonesia Confidential and prop rietary © 202 4 Nielsen Con sumer LL C. All Rights Reserved. 7
 GDP growth is higher than Inflation rate
This indicates economy is keep expanding, bring confidence about Indonesia economic situation

GDP growth vs. Annual Inflation (%)

2015-2022 2023 2024

7.0 6

5.1 5.2 5.3 5.2 5.1

4.8 5.0 5.0 5.0 4.9 5.0 5.0 4.9 5
6.0
5.5
GDP 5.0 4
growth 5.0
3.7
3

4.0 3.6 3.5 2

3.4
3.0 3.1 3.1
3.0 2.7 2.7 2.6 2.5
1
2.3
0
2.0 1.7 1.8
-1
Inflation
rate 1.0
-2.1 -2

0.0 -3
DEC 15 DEC 16 DEC 17 DEC 18 DEC 19 DEC20 DEC21 DEC22 DEC23 MAR 23 JUN 23 SEP 23 DEC 23 DEC 232 MAR 24 JUN 24 SEP 24 DEC 24

Line chart: GDP growth | Bar chart: Inflation rate % GDP > % Inflation % GDP < % Inflation
Source: NIQ- BPS | Bank Indonesia

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Steady GDP growth is expected for Indonesia in 2024 and 2025,
while inflation is expected to be stable at 2.6%
In overall Indonesia economic outlook is better than global economic outlook

GDP
Annual GDP growth
projections Indonesia 5.1% 5.2%
2024 vs. 2025:
% growth,
2024 Projection 2025 Projection
year over year Global Total
3.1% 3.2%

Inflation Rate
Inflation rate
average consumer price Indonesia 2.6% 2.6%
projections
2024 vs. 2025 % change, 2024 Projection 2025 Projection
Annual Global Total
5.9% 4.5%

Source: NIQ - OECD Economic Outlook 115, GDP growth forecast

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At glance about
Indonesia economic outlook But, how about consumer perception?

• As of Sep 2024, Indonesia GDP growth is 4.9% and

annual inflation rate is 1.8%
Do they feel confidence in
• In 2025, GDP growth projected at 5.2% while inflation their financial situation and
rate is at 2.6%. the overall economy?
------------------------------------------------------------------------
• Higher GDP growth than the inflation rate indicates a Let's check what is our consumer
positive/confident economic condition.
thinks about economic situation...
• Indonesia's GDP is dominated by HH consumption:
✓ Slowdown in consumption could lead significant
slowdown in economy.

• Need to monitor deflation since May 2024

✓ early warning signal for economic downtrend?

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 Compared to the rest of the world, more Indonesian consumers financially feel
better than worse, Indonesia consumers is highly confidence

In %
Where more consumers are “Better Off” than worse

38.4
33.7
27.7
18.5
Global 13.5
10.7 9.2 8.7 Where more consumers are “Worse Off” than better
Benchmark 7.8
-2.6

-5.7 -7.5
-13.3
-16.3 -18.4 -19.0 -19.2 -21.3 -21.4 -22.0 -22.7
-26.5
-29.4 -30.9
Total Indonesia India Saudi Egypt Mexico China South Brazil Colombia Thailand Singapore South Chile Italy Poland Australia Spain Germany United United Canada Turkey France
Global Arabia Africa Korea States Kingdom

Source: NIQ 2024 Mid-Year Consumer Outlook. Data reflects net change between those who say they are “better off” financially compared to those who say they are “worse off” financially; Q. Compared to a year ago, would you say that overall, your
household is better off, the same, or worse off financially? Note: In China, verbiage reflects change in “management of spending.”

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However, not as optimistic as before...
Those who feel more financially secure is decreasing post bounce-back in 2022 (after pandemic)

Thrivers
 Saved money and feel more financially secure.
26%
14% 13%
Unchanged
11% 9%
16%  Not impacted and continue to spend the same.

Cautious
34%
44%  Not impacted financially but are cautious with spending.
41%

Rebounders
19%  Experienced income or job loss but now feel they are back
23% on track.
19%
11% Strugglers
11% 12%
 Have suffered financial insecurity and continue to do so
today.

Mid-2022 Mid-2023 Mid-2024

Source: NIQ 2024 Mid-Year Consumer Outlook, Indonesia, vs. Mid-2022 and Mid-2023 studies, excludes China.
Q: Which of the following best describes how current events* of the last few years have impacted your overall household financial situation?
*Note: Question phrased more specifically to COVID-19 impact in June 2022​.

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Indonesia consumers concerns in facing 2025
Rising food prices & threat of an economic downturn continue to be top factors weighing on consumers’ minds

Global conflict / Crisis escalation

1 Rising food prices 37% 6 (was #5 in Jan. 2024) 12%

Personal Welfare / Happiness 83%

2 Economic downturn 27% 7 (was #11 in Jan. 2024) 12%
Say they’re likely to be
actively seeking additional
Political unrest income streams beyond
3 Global warming / Environment 16% 8 (was #4 in Jan. 2024) 11% their primary job

4 Rising fuel / Transportation costs

(was #8 in Jan. 2024) 14% 9 Ability to provide basics for family
(Was #7 in Jan. 2024) 11% 23%
Say they’re likely to
Increased utility bills Job security increase their personal
5 (was #9 in Jan. 2024) 13% 10 (Was #13 in Jan. 2024) 9% debt level to afford their
current lifestyle

Source: NIQ 2024 Mid-Year Consumer Outlook, Indonesia, Note: In China, verbiage reflects the following:
“Geopolitical uncertainty”, “Economic environment”

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About Indonesia consumers
state of mind

Indonesia economic outlook is

confident,

the consumers although confident,

but not as strong as before.

They start worrying about their

financial security and overall
Is there impact in the
economic situation. consumption patterns?

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On Technology Consumer Goods, people are willing to pay more for lasting quality
Smart / Mobile phone sales are a perfect example of how premium offerings have outgrown economy, as consumer
preferences evolve toward quality purchases that will last longer.
Premium vs. Economy smart / mobile phones – units sold and % growth

-42% vs. 2019

50,000,000 1H 2024
71% 40,000,000
30,000,000
Units 13.3 M
would pay a premium 20,000,000
for a product that will 2019 2020 2021 2022 2023
last longer before it
Economy (Price ≤$600) % Growth YoY -6.7%
needs to be replaced

+30% vs. 2019

1H 2024
71% 1,600,000
1,400,000
1,200,000 Units 983.9K
of consumers are now
1,000,000
renewing their mobile
2019 2020 2021 2022 2023
devices after 3 years
% Growth YoY +32.5%
or more Premium (Price >$600)

Source: 1) NIQ 2024 Mid-Year Consumer Outlook, Indonesia, 2) NIQ GfKNewron Consumer, Mobile Phone Group survey of 15 markets, Q1 2024, 3) NIQ GfK Market Intelligence Sales Tracking, Panelmarket,
Smart / Mobile Phone units sold (in millions of units) – comparing Premium offerings (Non-subsidized price of over $600) vs. Economy offerings (NSP below or equal to $600), Global coverage excluding North
America

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Consumers are also willing to spend
more for convenience and life
satisfaction

58% Say they’re likely to spend a little extra to

make one moment or day of the week more
special or enjoyable.

57% Are likely to spend more on product that are

convenient to use.

Source: NIQ 2024 Mid-Year Consumer Outlook, Indonesia

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At the same time, there are more choice in store...
Help consumers to get alternatives goods (substitute or complement)

Avg. SKUs visible at TT shelf YTD 22 YTD 23 YTD 24

Breakfast cereal 2,0 2,1 2,1

Cooking milk 1,9 1,9 1,9 More options are available

Cooking oil 5,3 4,2 4,2
combined with the desire for a
Noodle 6,4 6,7 7,0

Liquid milk 4,4 4,6 4,7

better experience...
Mineral water 3,3 3,3 3,5

Snack 11,8 12,0 13,4 Will it encourage consumer to

Sweetened condensed milk 2,0 1,9 1,9
try and become more open
RTD tea 3,7 4,0 4,2
for new things?
Moisturizer 2,4 2,5 2,8

Cleanser 3,9 4,1 4,0

Source: ID NIQ Retail Measurement Services via Global Strategic Planner, Total CPG / FMCG,
Regional data to latest year ended P3 2024.

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 In FMCG, the consumer now is willing to experiment to get more experience
Consumers are somehow encouraged to be more experimentative to adjacent categories when do
shopping
More product categories being bought within a Super category (number in %)
% Category Examples YoY 2022 YoY 2023 YoY 2024
Cooking oil, soy sauce, stock soup,
Cooking at Home,
seasoning fluor and liquid, chilli sauce, 47.3 49.3 49.8
more than 5 product categories
and margarine.

Snacking, Chocolate, Biscuit, Softcake, Bread

48.3 50.3 50.1
more than 2 product categories bought Spread, Cheese, Gum, Candies

Beauty Care, Cologne, Moisturizer, Hand and Body,

21.6 22.6 22.8
more than 3 product categories bought Cleanser, Shampoo, Hair Conditioning

Decorative, Cosmetics, Hair Coloring, Face Powder,

16.8 17.3 19.3
more than 3 product categories bought Foundation

Quick meal, Frozen Food, Instant Noodles, Breakfast

48.2 48.8 48.6
more than 2 product categories bought Cereal, Instant Porridge

Source : NIQ Consumer Panel Data

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 Experiment needs more money,
How do consumers manage their shopping budget while become experimentative?
When shopping, they sacrifice number of brands and use promotion to keep overall shopping basket at a
manageable level.
Less brand to purchase while shopping… More promotions nowadays…
% of HHs buy < 2 brands per category YoY 22 YoY 23 YoY 24 % purchase because of promotion YoY 22 YoY 23 YoY 24
Cooking Oil 16,8 26,0 28,9 Breakfast cereal 14% 14% 20%

Cooking Milk 83,4 84,9 84,4 Cooking milk 14% 16% 18%

Sweetened condensed milk 84,0 84,7 85,2 Cooking oil 22% 33% 39%

Snack 15,4 15,8 17,7 Noodle 9% 10% 12%

Noodle 22,0 21,7 24,3 Liquid milk 14% 18% 23%

RTD Tea 60,5 60,4 60,9 Mineral water 6% 6% 9%

Breakfast Cereal 91,0 90,9 91,9 Snack 14% 17% 18%

Liquid Milk 42,4 42,4 41,9 Sweetened condensed milk 15% 20% 29%

Water (non galon) 70,0 70,1 68,1 RTD tea 14% 17% 20%

Moisturizer 84,5 81,7 80,0 Moisturizer 15% 19% 20%

Cleanser 76,8 76,3 74,9 Cleanser 17% 19% 22%

Source : NIQ Consumer Panel Data

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...and there are more saving strategies consumers use to manage the budget
Better deal, lower priced option, focus on essentials, use discount/promo to shop more are top savings
strategies. Technologies (shopping online, e-comm, etc.) are also used to help consumers reach their goal.

Top 10 consumer saving strategies for FMCG

Shop online to get better deals / to save 46%

Monitor the cost of my overall basket of goods 46%
Switch to a lower-priced option 38%
Stop buying certain products to focus on essentials
Shop more often at discount / value / lower-priced stores
37%
36%
4.9
Avg # of saving
Use digital technologies to find better deals 33% strategies
applied per
Weigh up the attributes that matter most 31% shopper
Buy whatever brand is on promotion 29%
Substitute / Trade out for a lower priced alternative 28%
Collect / Use loyalty points to manage spend 21%

Source: NIQ 2024 Mid-Year Consumer Outlook, Indonesia

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Overall Conclusion
Alert: need to anticipate the changing behaviors

Managing “value for money” on consumer perception is a

must, balance affordability and value in product offerings
to appeal to price-sensitive consumers.

Be prepared for intense competition, requiring agility

in pricing, promotions, and product innovation.

Innovation creates category excitement

and Differentiation retain brand loyalty.

Executing smart promotional strategy to avoid wastage,

(e.g. leverage technology to reach consumers efficiently, offering
discounts, personalized shopping experiences, bundle deal, etc.)

Provide premium and convenience-focused products

to capture consumers that are willing to pay more for
convenience and improved life satisfaction.

Source: NIQ 2024 Mid-Year Consumer Outlook, Indonesia

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