JAKARTA: Consumer buying habits vary greatly across Indonesia, meaning brands will have to consider localising products and value propositions down to the regional level, a report has argued.

McKinsey, the consultancy, surveyed 5,500 consumers in 44 cities about categories and brands, and found that, while many product groups had achieved a considerable degree of household penetration nationally, the country's regions differed in potentially significant ways.

As an example, the report said that consumers in Surabaya were more influenced by brands and image than those in Jakarta.

Surabaya residents were also more likely to consume "global categories" such as chocolate and were twice as likely to ask family members and friends for advice before buying a product.

Overall, the study found that Indonesian consumers attached more importance to brands than other countries at a similar stage of development.

Much of this was directed towards domestic brands, with 60% preferring these, especially in the food and beverage categories.

But many consumers were not aware of a brand's ultimate ownership, with many regarding Nestlé's Kit Kat, for example, as being local.

The report suggested that as well as localising products and value propositions, companies might develop portfolios of local and international brands, sometimes in partnership with local players.

The Indonesian market is further complicated by its geography, with 17,500 islands contributing to distribution issues as well as regional taste preferences.

While mom-and-pop stores dominate in many categories, modern retailing is starting to take a greater share. This was particularly evident for home and beauty products, where consumers were found to be more likely to buy at chains stores in malls.

Ecommerce, too, is catching hold, as internet access grows at the rate of 20% a year. Some 100m Indonesians are expected to be online by 2016.

Data sourced from McKinsey; additional content by Warc staff