NIQ Retail Spend Barometer
Indonesia

• Consumers in Indonesia spent IDR 260T on FMCG and Consumer Tech products in Q2 2024, a 0.8% change from the same period last year.
• Indonesians spent IDR 213T on FMCG alone, 82% from the total spending for Indonesians in Q2 2024. This is just a 0.4% uplift from last year on the same period. Meanwhile, on Consumer Tech, Indonesians spent 47T with an increment of 2.5% from last year on the same period.
• Value growth on the FMCG sector dropped from +1.9% in Q1 2024 to +0.4% in Q2 2024, this is despite a stable GDP growth and falling inflation. However, for the Consumer Tech sector the value growth rose from -1.5% in Q1 2024 to 2.5% Q2 2024.

Consumers in Indonesia spent IDR 260T on FMCG and Consumer Tech products in Q2 2024, a 0.8% increase from last year on the same period. FMCG contributed 82% and Consumer Tech Contributed 18% from the total spending in Indonesia.

Indonesians spent IDR 213T on FMCG product in Q2 2024. Hence, this uplift is only 0.4% compared to last year on the same period. Also, value growth for the FMCG sector dropped from +1.9% in Q1 2024 to +0.4% in Q2 2024, despite Indonesia’s GDP that grew 5% in Q2 2024 and inflation that slowed down to 2.5% in June 2024. The GDP growth remains stable at 5% from Q1 2024 to Q2 2024 and inflation dropped 0.6% from March 2024.

The observed slowdown is primarily attributed to the post-festive period following Eid Al-Fitr and Mudik in Q1 2024. This trend is evident in the Beverages category, which, as the second-largest contributor to the FMCG sector, experienced a decline in growth from 8.9% in Q1 2024 to 2.1% in Q2 2024. Similarly, the Snacking category saw a significant drop of 7%, falling from 10.2% in Q1 2024 to 3.6% in Q2 2024. Despite the deceleration in FMCG performance from the previous quarter, the easing of inflation may present opportunities for improvement in the upcoming quarter, potentially stimulating increased consumer spending on FMCG products in Indonesia.

The Tech & Durables market showed improvement in Q2 2024, with an overall growth of 2.5% year-on-year, up from the -1.5% reported in Q1 2024. This growth is primarily due to the resolution of supply issues especially for electronic market that affected the previous quarter, which were caused by local restrictions on imported goods.

The decline in the DIY & Home Improvement sector, which dropped from -13.8% in Q1 to -14.7% in Q2 2024, is primarily due to a significant decrease in PG LED lamps, which fell by -18.1%. On the other hand, growth in the Technical Consumer Goods (TCG) was driven by the Telco Product group, which holds the largest share in the TCG market. There are changes in consumer preferences, such as an increased demand for the latest technologies (e.g., 5G networks, AI technology, foldable screens), which could also boost smartphone sales. Core wearables have also seen the most significant in terms of growth, with an increase of 52.3%, driven by a trend towards healthier lifestyles in Indonesia.

“While FMCG growth was slower in Q2 compared to Q1, it was due to the impact of Post Id-Fitr Festive. The easing of inflation may present opportunities for improvement in the upcoming quarters. While for Consumer Tech, growth improvement in Q2 was driven by latest technology in smartphones and increased adoption of core wearables.”

Wiwy Sasongko, Executive Director, Retail Vertical at NIQ Indonesia