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Indonesia optimistic for growth in 2017

News, 13 January 2017

JAKARTA: Optimism is the key word for Indonesia's advertising industry in 2017 as South East Asia's biggest economy looks toward a brighter year, with higher consumer spending and increased ad spend across both digital and traditional channels.

Ashish Daryani, Chief Executive Officer of Phibious Indonesia, writing exclusively for Warc on the trends that will define marketing in the country for 2017, expects that an economic upturn will give brands confidence to invest.

"Indonesian companies have for long been on the fence, sitting on large cash reserves, expansion plans and new initiatives, with a wait-and-watch strategy," he writes. "With a glimmer of hope in the economy, they're all in a mood to let go, leading to new product launches."

Consumers are in a similar frame of mind, and Daryani anticipates a boom in the luxury sector, while "young Indonesians, aspiring for a better life, will upgrade in all measures, seeking better experiences", he says.

Ad spend is also set to soar across both digital and traditional channels as optimistic brands seek to promote new products in 2017.

Spending in traditional media was already on the rise in 2016. "This trend is likely to move into 2017 as well, with new product launches finding TV the most cost effective way of building salience. Spends in digital will also rise," Daryani believes.

With more than 100m smartphone users and internet penetration increasing to 40%, mobile devices are also set to become the central plank of any marketing strategy. Mobile payment technologies, backed by Indonesian telecom giant Telkomsel, will also create new opportunities.

"All experiences will now be optimized for mobile. E-commerce businesses have already built their entire user experience around mobile ecosystems… In a country of 260m+, where the penetration of credit cards is just 3.2%, and debit cards 11%, Indonesians will use their smartphones to spend their money like never before."

Should the economy not recover as envisaged, research from Unilever – Marketing in an economic downturn: Unilever's approach in Indonesia – suggests brands should switch their focus from growth to meeting everyday family needs as parents refuse to compromise on anything related to their children's future.

Data sourced from Warc