Are religious factors enough to shift Indonesian consumer choices?

The prolonged conflict in Gaza has triggered a significant wave of consumer behavior change in Indonesia. As the country with the largest Muslim population in the world, Indonesians' reaction to the conflict has gone beyond mere protests and political demonstrations, driving a noticeable shift in shopping patterns and consumer preferences. The boycott of global brands perceived to support Israel has been a catalyst that accelerated a trend that has been developing over the past few years: the tendency of Indonesian Muslim consumers to seek products and services that are aligned with their Islamic identity and values.

This phenomenon poses a strategic dilemma for marketing industry players. On one hand, there is a huge opportunity for local brands and brands that promote Muslim identity to take market share from boycotted global brands. On the other hand, industry players need to critically evaluate whether this shift is permanent or just a temporary reaction that will fade over time. Brands that hastily "jump on the bandwagon" of spirituality without building a solid foundation of product and service quality risk losing momentum once consumer sentiment returns to more traditional purchase decision factors.

Recent studies reveal the complex dynamics behind this trend, particularly how consumers' spiritual preferences take priority over other factors that determine their purchasing or spending decisions. The data shows that while Islamic values are the initial driver of purchase decisions, functional factors still determine long-term loyalty. Local brands that rely solely on spiritual sentiment without the benefit of improved product quality risk losing momentum once the euphoria of the boycott subsides.

The data behind the shift

Recent research clearly illustrates the evolution of this consumer behavior:

Inventure and Rumah Zakat's February 2025 survey of 340 Muslim respondents in Jabodetabek revealed:

• 89% choose local Islamic products even if the quality is below the boycotted global brands
• 90% prefer malls with mosques that offer regular studies and events
• Significant increase in halal product preference year on year:
  • FMCG products: 88.5% → 98%
  • Beauty products: 90.1% → 95%
  • Cookware: 71.9% → 85%
  • Fashion: 59.2% → 83%
  • Electronics: 25.8% → 66%

Moonfolks' Ramadan 2025 whitepaper confirms this trend, noting the shift of Indonesian consumers to local alternatives such as Executive (fashion), Specs (shoes), Wardah (skincare), and Marina (body care) in response to the boycott movement.

The Edelman Trust Barometer 2024 ranks Indonesia among the top three countries (alongside Saudi Arabia and the UAE) in consumer boycott activity against global brands affiliated with Israel. The report also says that brand boycotts are mostly based on political beliefs and personal values.

Behind spiritual marketing: The need for functional excellence

Yuswohady, Managing Partner of Inventure, explained that Indonesian consumers uniquely seek three types of benefits from products:

• Functional benefits: Product usability and quality
• Emotional benefits: Psychological satisfaction and status
• Spiritual benefits: Religious harmony of faith and inner peace

"Western consumers mainly focus on functional and emotional benefits. The spiritual dimension is typical of Indonesia and other Muslim-majority countries," Yuswohady said.

However, his research shows that spiritual positioning alone creates an unstable market advantage. This is evident in Islamic banking, where despite strong spiritual alignment, market penetration remains low, at only 6% of respondents.

Among users of Islamic financial products, religious motivation dominates, with 35.3% avoiding usury, 26.5% using agreements in accordance with religious teachings and 20.6% using products 'reassuring to the heart'.

Meanwhile, functional considerations are much more minimal with 8.8% seeking more diverse channels, 5.9% receptive to attractive product benefit promotions and just 2.9% focused on product profit.

"Muslim brands cannot rely solely on Islamic sentiment. They have to strengthen functional and emotional differentiation," Yuswohady suggests. "[They'll] try if BSI or Muamalat has great service like BCA."

Universality factor

Research by Sri Wahyuni and colleagues at Institut Perbanas Jakarta (2022) reinforces this point. Their study of 150 Jakarta respondents found that brand personality has a significant influence on millennials' purchase intention for Islamic banking, while spiritual positioning alone proved insufficient.

Their key finding: perceived exclusivity actively harms brand appeal among millennials. The researchers recommended that Islamic banks present "spiritual values that are more universal or present to all (religious) groups" through superior customer service and social responsibility initiatives.

Three conditions for brand excellence

Professor Gancar Candra Premanto, a marketing expert from Universitas Airlangga, outlines three essential requirements for local brands to maintain their current edge:

1. Quality and service excellence

"Products that provide only emotional and spiritual offerings will generally result in consumer disappointment when quality and service are neglected," warns Prof. Premanto. "Consumers may return to quality products that do not match emotional and spiritual concerns for a moment, when the momentum has disappeared."

Several Indonesian conglomerates have successfully positioned themselves with quality alternatives to boycotted products, including Mayora, Wings Group, and Gunung Slamet Slawi.

2. Culturally appropriate promotion

Effective promotion that understands the customs of the Muslim market is essential, including the selection of the right endorsers and messaging that positions the brand as a safe alternative to the boycotted products.

"Because without promotion, consumers will not know the substitutes that are alternatives to the boycotted products," explained Prof. Premanto.

3. Build relationships for long-term loyalty

Building sustainable customer relationships is critical, especially as the momentum of the initial boycott fades after the ceasefire in Gaza in early 2025.

Prof. Premanto noted: "This is especially true when there was euphoria among the Palestinians during the Ceasefire in early 2025, which made some Indonesians feel that the boycott period had also ended, and the boycott had been a success. Meanwhile, multinational brands are always trying to promote their products utilizing the momentum of Ramadan 2025. So that their brands will become part of the habits of the people."

Learn from Wardah's success

Wardah, one of Indonesia's leading halal beauty and cosmetic brands did not achieve market leadership through boycott momentum, but through strategic outlook.

As Alif Kartika, the Global Halal Beauty Brand Development Group head of Paragon, explains, "We identified an opportunity in the early 2000s, the lack of good hijab products and halal local cosmetics in Indonesia."

Wardah implemented a comprehensive rebranding, improved product formulas, visual presentation, and collaborated with international experts, positioning them perfectly to capitalize on the booming hijaber community in 2009.

"When the community was on the rise, Wardah had changed its clothes. the look already had a new visual communication," Alif explained. "All the momentum is right. It turns out hijab can be cool, halal lifestyle can be so."

Strategic implications for marketers

For brand marketers navigating this landscape, several strategic imperatives emerge:

• Balance spiritual positioning with functional excellence - Faith alignment creates initial consideration, but quality and service drive long-term loyalty
• Invest in product development, not just positioning - Use this opportunity to develop a truly superior product that can compete on merits beyond spiritual alignment
• Build inclusive spiritual associations - Avoid exclusivity that could alienate potential customers, focus on universal values that resonate broadly
• Strategically capitalize on momentum - Current market shifts provide entry opportunities, but sustainable advantage requires building real competitive differentiation
• Monitor shifts in consumer sentiment - Remain sensitive to how geopolitical developments affect buying behavior, ready to adjust messaging as needed

Indonesian brands face a historic opportunity to build market leadership. Those that move beyond the current euphoria to build real competitive advantage through quality, service and inclusive messaging will turn temporary gains into enduring market leadership.