In a Volatile Economy, What Smart Brands in Indonesia are Doing Differently
As 2025 progresses, Indonesia faces economic pressures, such as persistent inflation, currency depreciation, and changing consumer behaviors that force businesses to adapt—or else, they will be left behind.
In the midst of these daunting challenges, some brands have decided to tighten their marketing costs, but others are emerging with innovative and bold steps to move ahead with the evolving market needs.
These brands are not just surviving the challenges, but also using the hurdles to map their own way to success. Find out what the bold strategies behind their excellence are and see what kind of valuable lessons you can take from them.
The Impact on Consumer Behavior
As inflation continues to affect consumer goods, Indonesia’s middle class, as the engine of domestic consumption, becomes more cautious in their expenses. However, how do the challenges change consumer behavior in Indonesia’s middle class? Let’s dig in.
- Prioritizing Basic Needs
Economic downturns have significantly affected how middle-class consumers reduce their non-compulsory expenses. Non-essential purchases on several products like gadgets and fashion splurges are being cut down.
The middle class, particularly, are now prioritizing more on basic needs over luxury items and experiences.
- Opting for More Affordable Alternatives
Middle-income consumers who previously aspired to premium brands are now opting for more affordable options. They become more aware of their spending, thus value-for-money becomes their dominant decision.
- Smart Shopping
There is a noticeable trend in how the middle class is turning their spending into flash sales, promotions, and cashback offers. Products that offer special bundle savings are particularly attractive.
Case Studies: Brands Leading the Way
The changing economic landscape in Indonesia is forcing both global giant companies and local FMCG brands to respond with new strategies and agility.
Some successful brands are leading by example, showing how smart responsiveness can change any economic uncertainties into a competitive advantage.
- Case Study 1: Pizza Hut Indonesia
Considering the declining middle class along with reduced consumer spending, Pizza Hut Indonesia decided to close several outlets to cut costs for operational efficiency.
Alternatively, they began to shift their main focus to delivery and online ordering systems.
Recognizing the importance of digital channels, Pizza Hut Indonesia has enhanced its online presence with active social media campaigns and a mobile app to improve the user experience for online delivery.
These smart tactics have effectively been used by the brand to serve different markets and increase the total of digital sales, which also contribute significantly to total revenues.
- Case Study 2: Local FMCG Brands
Dealing with shifting consumer preferences, some leading local FMCG brands have taken strategic steps to sustain growth.
Indofood & Mayora, as prominent FMCG companies, have introduced smaller packaging sizes to cater to budget-conscious consumers.
Likewise, Wings Group has effectively utilized sachet packaging on their products, such as SoKlin detergent and Nuvo soap.
Both of these local FMCG giants’ strategies are generally aimed at maintaining market share with a smaller size and lower price option without sacrificing quality. It makes their products more accessible to a broader market segment.
Strategies for Success: What Smart Brands are Doing Differently
What kind of strategies can bring smart brands to different levels among their competitors? Discover the answers while you are reading the following passage!
- Embracing Digital Transformation
In response to the economic uncertainty, smart brands in Indonesia are proactively embracing the digital transformation by strengthening their social media as well as e-commerce presence.
By employing this strategy, it will be easier for brands to reach a broader audience.
- Personalized Marketing
Smart brands utilize data analytics to understand consumer preferences and create specific marketing campaigns accordingly. They will personalize the efforts with loyalty programs to give rewards for loyal consumers or repeat purchases.
At the same time, brands are also leveraging the effectiveness of social media influencers as well as localizing content to resonate with specific audiences.
- Value Proposition Enhancement
Smart brands always find a way to sharpen their value proposition by delivering quality products or services while maintaining an affordable price.
This includes creating bundled products, economical product’ refills, or larger pack sizes. It benefits them to remain relevant even though consumer behavior continues to evolve.
Recommendations for Brands: Adapting to the New Normal
What should brands do to adapt to economic challenges effectively? The following recommendations have all the answers.
- Invest in Digital Infrastructure
Brands need to invest in a powerful digital infrastructure to support online sales, especially in a fast-charging market.
These strategic efforts may include developing mobile-friendly e-commerce platforms and customer relationship management (CRM).
Equally important, internal teams should be equipped with digital literacy and skills to make the most transformation across the organization.
- Develop Pricing Strategies
As the middle-consumer class spending becomes more cautious, brands must develop flexible pricing strategies to accommodate varying consumer budgets.
For example, brands can offer multiple products with different prices, from basic to premium. But, it is important to highlight that any price adjustments need to be communicated to consumers transparently to maintain long-term loyalty.
- Enhance Customer Engagement
Nowadays, consumers mostly prefer products that align with their needs. To do this, brands need to personalize their products and offer specific strategies that can foster deeper engagement, such as loyalty programs.
But this program should not be limited to the form of discounts or special prices. It’s better if loyalty programs also offer an exclusive experience, such as giving early access to new products to brands’ loyal consumers.
Building Resilience in Uncertain Times
In the current condition of a volatile market marked by depreciation, inflation, and shifting consumer preferences, only resilient brands that prioritize innovation and agility can thrive.
Whether changing marketing plans or launching new product formats, agility has a crucial role in enabling brands to adapt accordingly to the changing markets.
On the other hand, innovation will fuel brands’ adaptability, allowing for product improvement and business models.
Along with proactive steps like utilizing digital infrastructure, creating personalized products and experiences, and developing flexible prices, your brands will be able to evolve, opening up to broader opportunities in times of downturns.
From Insight into Action: Build Brand’s Resilience Now with Essentials!
In times of uncertainty, smart brands don’t just wait, see, and even do nothing. Instead, they find ways to proactively evolve and strive with purpose.
Leveraging this very moment and rethink how your brand can compete and grow throughout the challenging phases of 2025. Need help navigating 2025? Talk to our strategy team for a free 30-minute consultation.
References:
https://business-indonesia.org/news/indonesia-economic-outlook-2025-steady-amid-global-pressure
https://www.reuters.com/world/asia-pacific/indonesias-exports-up-32-yy-march-2025-04-21/
https://www.taksudigital.com/blog/digital-marketing-channels-indonesia
