How to Build a Winning Fast Moving Consumer Goods Brand in Indonesia
This article has been translated and summarized by CORIM Indonesia as part of our highlights of services. We has not completely checked the accuracy and admits no responsibility for the content.
By The Jakarta Post
Opinion | January 17, 2024
The fast-moving consumer goods (FMCG) industry in Indonesia is a significant contributor to the country's economic development, with a market value of approximately 1.2 trillion U.S. dollars in 2020. The industry, which includes food, beverages, personal care, household cleaning, and tobacco, faces intense competition and changing consumer preferences. To build a successful FMCG brand in Indonesia, companies must understand the target market, develop a strong value proposition, and execute consistently. Key factors driving the industry's growth include rising purchasing power due to personal income, urbanization, and digitalization, the diverse population, low penetration of certain product categories, and increasing awareness of health, wellness, sustainability, and social responsibility.
However, the FMCG industry faces challenges such as intense competition from established players and new entrants, complex distribution channels, geographic and logistical difficulties, and regulatory and political uncertainties. To succeed in the Indonesian FMCG business, companies must adopt best practices in sales strategy, route to market (RTM), marketing mix, and organization capability. Successful FMCG brands in Indonesia include Kapal Api (coffee), Sweety Baby Diaper (diaper), Sampoerna A Mild (cigarette), and Mie Sedaap (instant noodle).
1. Understand the Target Market
To build a successful FMCG brand, it's crucial to understand the target market's needs, wants, preferences, motivations, and behaviors. This can be achieved through market research, such as surveys, interviews, focus groups, and experiments. Kapal Api, a coffee brand founded in 1927 by Chinese immigrant Go Soe Loet, focuses on coffee drinkers seeking strong, aromatic flavors and affordable prices. The brand has adapted to changing market trends by launching various product variants, such as instant coffee, sachet coffee, and premium coffee.
2. Create a Strong Value Proposition
Strong value proposition will communicates the product's benefits and advantages to the target market. This should be clear, concise, relevant, and compelling. For instance, Sweety Baby Diaper, launched in 2003 by Softex Indonesia, is the only diaper brand in Indonesia clinically tested as hypoallergenic and safe for baby's skin. The brand offers various features catering to parents and babies' needs.
3. Develop a Distinctive Identity
To create a successful FMCG brand, create a unique identity that reflects the brand's personality and image, including its name, logo, slogan, color scheme, packaging design, and other visual elements, ensuring consistency across all consumer touch points.