by Djohansyah Saleh
September 3rd, 2012

There was a time when the story of Indonesia’s development seemed to slip past many who watched the shifting powers in Asia. Between the parallel sagas of rising India and China, that was not entirely surprising. But marketers and communicators, business leaders and political experts are finally taking a much closer look at the island nation.

Steady GDP growth (6-7% annually over the past three years) has contributed to Indonesia’s best years since before the 1997 financial crisis. From a macroeconomic outlook, this is highly encouraging, and capital is flooding in from abroad as investors race to tap into Indonesia’s rich resources and burgeoning consumer market. Not only is Indonesia the third most populous nation in Asia (250 million people) after China and India, it has also boasted the third fastest growth rate.

From the outset, it sounds familiar: a dense population and rising middle class that carried the country through the global financial crisis, now ripe with opportunity and a consumer market hungry for brands they’ve seen in movies, heard in music and discussed online. But it is this online discussion that largely differentiates the Indonesian market from those in China and India (and the rest of the region, for that matter). When it comes to engaging online, Indonesia is blazing entirely new trails.

While 80% of Indonesian netizens participate in social media, overall internet penetration in Indonesia sits among the lowest of Southeast Asia (22.4%, Markplus). And yet despite this, Indonesia remains the third largest market for Facebook after the US and India, and the fifth largest contributor to Twitter — perhaps it’s because over half of Indonesians are under 30. And nearly one-third of all global trending topics were from Indonesia in 2011, according to jakartaupdates.com.

Due to this young social-savvy orientation, brands have to work extra hard to capture the attention of the Indonesian consumer. Smart brands must take advantage of this consumer intensity and eagerness and actively engage them in two-way conversation, even more so than is already necessary in other markets.

Indeed, some companies have already started to seize the opportunity that social media presents here. After employing a strategy that leaned heavily on social media for raising brand awareness and spreading news of promotions, one American fast food chain generated a tremendous amount of loyalty and publicity among Indonesians. By using Twitter to target a primary audience of young consumers directly, the company was able to build off the interplay between coverage on social media and traditional outlets, yielding attention in a variety of teen and consumer media nation- wide. Considering how this brand has now leapfrogged beyond competitors and is now considered to be the top choice in a crowded field of fast food behemoths, the value of effectively engaging social media in Indonesia could hardly be clearer.

Given this, the low level of Internet penetration shouldn’t be seen as a deterrent, but rather an opportunity to enter that relatively untapped but gargantuan market of 250 million people. Penetration rates have climbed steadily — up from around 17.5% in 2010 to over 22% today — and are all but guaranteed to continue to rise thanks to the national proclivity toward mobile web usage. Today the vast majority of phones sold in Indonesia are web-enabled, and with mobile services inexpensive (less than US$12 a month buys an unlimited plan), far more Indonesians are accessing the internet via mobile devices than are their peers in other South East Asian countries. And as vendors in Indonesia report a 61% year-over-year increase in smartphone shipments (according to International Data Corporation), we anticipate that the rate of internet access will show a double-digit increase this year.

It’s not a far leap to project that among social platforms, mobile marketing will become a vital channel for reaching the Indonesian audience. True it is still in its nascent stages, but one can expect a meteoric rise in mobile advertising and marketing, as well as e-commerce, as a result of these fast-moving trends. There is definitely massive room for growth.

Like anywhere else, the Indonesian audience is unique and should be treated as such. A growing number of brands are recognising this truth, and are seeing success by creating local pages and profiles on social media that are specifically tailored to the Indonesian market. What these pioneering companies have proven is that the 24/7 digital engagement between consumers and brands is key for building a strong online community and brand loyalty in Indonesia, and a shift from simply broadcasting a message to engaging with fans and consumers is inevitable if brands want to succeed. Given these shifts, localisation online will continue to be a commanding trend. And the brands that will reap the most benefits will be those which have built cohesive, genuine relationships with their audiences.

Indonesia has quietly established itself as a global epicenter for social media. As a market that is otherwise still beginning to mature, this presents both daunting challenges and dazzling opportunities for corporations and brands anxious to get their share. Businesses that succeed in taking advantage of Indonesia’s social media obsession will go far, be they fledgling companies or mature brands, while those that miss out on the online conversation will be left wondering what went wrong.

The future for engagement in Indonesia then, is plain and simple: go social or go nowhere.

Djohansyah Saleh is head of operations, Indonesia, at Weber Shandwick

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