Writer: Liu Haiyao, President University/Masters of Technology Management Graduate School of Business
Huge potential consumer market in Indonesia
Indonesia is a vast country, consisting of more than 17,000 islands, inhabited by residents of different races and religions. Against the background of global economic integration, it’s economic growth has remained around 5% for recent years. According to World Bank data, Indonesia’s GDP reached 1,289.5 billion US dollars in 2022, a year-on-year increase of 5.31%, which has also given birth to a strong consumer group. As the world’s fourth most populous country, Indonesia is also a major global food consumer. According to McKinsey’s prediction, 90 million Indonesians will join the middle class or become a new consumer group by 2030, which will make Indonesia the “world’s largest new consumer market” after China and India. Indonesian residents spend more than 50% of their income on food consumption as per statistics. Currently, Indonesia has approximately 5,793 medium and large food processing factories, more than 93,000 small enterprises and 1.47 million family factories, employing approximately 4.49 million people, and a total output value of more than 23.3 billion US dollars. Among them, Indonesia’s young population occupies the main consumer position, and they have a high pursuit of fresh and fashionable dining experiences.
Development status of Indonesian catering industry
The scale of the Indonesian catering market will be 26 billion US dollars in 2023. The compound growth rate of the catering market from 2023 to 2028 can reach 6.5%. So the scale of the Indonesian catering market will reach 35.5 billion US dollars by 2028. A young population structure, a rapidly growing middle class, and sustained and stable economic growth mean huge consumer power and market space; at the same time, cultural background and regional differences have also created a rich and diverse Indonesian food culture. The distribution characteristics of Indonesia’s catering market are relatively obvious: from a geographical point of view, Indonesia’s main catering market is concentrated in Java Island, and mid- to high-end restaurants are concentrated in a few big cities such as Jakarta and Surabaya in Java Island; from a business perspective, mid to high end restaurants business is good and profits are huge overall,while mid to low end end facing restaurants are struggling and making meager profits;from the perspective of market concentration, the Indonesian catering market is relatively fragmented, consisting of Chinese catering, Indonesian food, Japanese food, American fast food, Thai food, etc. Chinese catering is becoming more and more important in Indonesian cuisine, and many dishes across Indonesia have also absorbed some elements of Chinese food;From the taste point of view, due to the influence of Muslim culture, there are few pork dishes, and chicken is used as the main ingredient. The cuisine is diverse and popular with the mainstream crowd.
The concerns and needs of contemporary consumers when choosing restaurants
Indonesia’s middle class and young people’s catering industry market is booming. If catering companies want to achieve long-term development, they must adopt active marketing strategies and try their best to meet their needs.According to data display,contemporary consumers usually pay attention to the following aspects when choosing meals:
1. Nowadays, food quality and safety are relatively important. Consumers are more inclined to choose food made with fresh and natural raw materials, and pay attention to whether the food production process meets health and safety standards. At the same time, the concept of healthy diet is also receiving more and more attention,especially for women and the elderly.
2. Consumers hope to have diversified choices and personalized experiences when choosing dining venues. They like to explore different food cultures and tastes, and hope that restaurants can provide diverse menu options and personalized services. At the same time, the restaurant environment has also become a factor that affects consumers’ dining choices.
3. Consumers have higher and higher requirements for brands and services, and branding and standardization have become the development trend of the catering industry. Branding can enhance the popularity and credibility of restaurants, while standardization can ensure the quality and stability of products and services. They are more inclined to consume some well-known brands such as KFC, Starbucks, Haidilao, etc.
4. With the development of technology, consumers have increasing demand for digital ordering, online ordering and takeaway services. They want to increase the convenience of consumption by easily booking a table, ordering food and enjoying fast and convenient service through mobile applications or websites.
Targeted optimization of marketing strategies to meet the needs
1. Respect and integrate food culture.86% of the Indonesian population is Muslim. The impact of Indonesian religious culture needs to be considered in product marketing, brand design, packaging and employee management. It is necessary to establish a stable supply chain and supervision system from the procurement of raw materials to processing and manufacturing to make sure the quality,but attention should be paid to not only meeting the diverse needs of customers, but also considering the feelings of customers themselves.Restaurants must actively adapt to local culture and customs while competing with each other. A good example, the decoration of Haidilao Indonesia’s Jakarta store incorporates Javanese shadow puppetry, the national quintessence of Indonesia, and fully integrates local characteristics in the seating layout and food.
2. Expand marketing channels.Catering companies can consider increasing their popularity and brand by increasing publicity on multiple self-media platforms Notability and reputation. For example, publish attractive photos, videos and text content to showcase delicious dishes, comfortable environment and high-quality services. The content can include the dish production process, customer reviews, restaurant activities, etc. to attract the attention of the target audience; actively reply to customers’ comments and messages on social media to establish a good interactive relationship; encourage customers to share their dining experience in the restaurant on social media, such as uploading photos or writing reviews. At the same time, catering companies can also consider expanding other marketing channels, such as store promotions, offline activities, etc., to improve the diversity and comprehensiveness of marketing.
3. Offer new marketing methods. Group purchase packages, time-based discounts and flash sales are some most accepted promotion methods by young consumers. Therefore, catering companies can carry out key strategic optimization. For group purchasing packages, different package combinations can be provided according to the needs and tastes of customers, such as launching new dishes, special packages, or holding special events (such as theme dinners, food festivals, etc.) to attract specific customers; time-based discounts can be combined with other Enterprises or organizations cooperate and form alliances to jointly carry out promotional activities (such as cooperating with movie theaters, amusement parks, etc. to provide preferential packages or redemption coupons and specific gifts) and other new marketing methods for joint sales; for flash sale items, they can try to improve customers’ information acquisition speed and use some new form,such as point redemption, member-exclusive activities, etc., which can also promote customers’ repeat visits while promoting.
4. Update marketing technology.Nowadays, catering companies can use digital marketing techniques, including search engine marketing, social media marketing, email marketing, etc., to improve the brand’s online visibility and popularity; attract target customer groups through precise advertising and positioning; build customers through evaluation systems The database uses big data technology to classify and analyze customers, understand customer needs, preferences and behavioral habits, and provide personalized services and discounts. In addition, in today’s Internet era, emerging technologies such as smart ordering, unmanned catering, and online payment play an important role in improving service efficiency and user experience, reducing costs and improving benefits.
Summarize
Indonesia is a market full of vitality and potential, and the catering industry has broad room for further development. In order to succeed in the Indonesian market, catering companies need to fully research the market and formulate suitable marketing strategies. In addition to improving their own dishes, services, tastes and other characteristics, they must also provide customer-centered high-quality services,and strategy is also very important. For example, using new tools such as online ordering systems, takeout platforms, and mobile payments, using social media platforms to strengthen brand promotion and increase awareness; adding food retail, subscription services, or virtual kitchens and other businesses to improve customer experience are all very effective ways. Improving competitiveness by improving corresponding marketing strategies will ultimately increase customer satisfaction and loyalty, it will help catering companies leverage the advantages of their own products and brands, and better achieve high-quality business performance in the Indonesian market.
References
• Yang Tongtong. Research on corporate marketing strategies based on consumer purchasing behavior analysis [J] Market, 2023(5): 117-119.
• Badan Pusat Statistik Indonesia:https://www.bps.go.id/id
• World bank report:https://www.worldbank.org/en/
• McKinsey: <World Economic Forum Report 2023>
• Zhang Zhiguang, Cao Fan, Wei Wei. The influencing mechanism of consumer behavior of time-honored catering brands in the social media era – based on the “nostalgia-innovation” dual-drive model [J]. Food Research, 2022, 39(3): 26-34 .
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