Indonesia's Ramadan reset: Economic squeeze to spark frugal festivities

Frugality takes center stage

 

Traditionally a time of abundance, Ramadan in Indonesia is now marked by more cautious spending. Rising living costs and stagnant wages are causing families to prioritise needs, seek value-driven deals, and cut back on non-essential purchases. As many as 76% of respondents said they plan to spend less on non-essentials during Ramadan. This shift has resulted in a Ramadan focused on intentionality rather than indulgence. Consumers are prioritising bulk deals, private labels, and essential items while planning shopping trips to maximise efficiency and cost savings.

 

Discounts lose luster, value takes over

 

Indonesian consumers are becoming more skeptical of traditional Ramadan discounts, prioritising quality and necessity over volume. Instead, they are employing savvy strategies to stretch their budgets, such as comparing prices using apps, strategically timing purchases to coincide with the best deals, and leveraging Buy Now, Pay Later (BNPL) services. As a result, consumers are buying smaller quantities or opting for private-label alternatives.

 

Local brands see a boost

 

As economic pressures mount, Indonesians are increasingly turning to local brands that resonate with cultural values and offer affordability. Boycotts related to the Middle East conflict have further boosted the preference for local products. Brands that authentically celebrate local Ramadan traditions are seeing potentially 30% more engagement and greater brand likability.

 

 

Charity is priority

 

Despite economic challenges, Indonesians remain committed to giving during Ramadan, driven by a strong sense of communal responsibility. As many as 42% of respondents plan to increase their allocation for Zakat and Sadaqah (giving to charity) this year. Online Zakat platforms experienced a 30% increase in transactions during Ramadan 2024, with 45% of donations now made online.

 

 

Implications for brands: Adapting to a new reality

 

To connect with Indonesian consumers during Ramadan, brands should:

By understanding these evolving consumer behaviours, brands can adapt their strategies to stay relevant and resonate with Indonesian consumers during Ramadan.

 

"There’s clearly nothing coming in the way of Indonesians making the most of their Ramadan. We call this the spirit of 'Semangat' which translates into 'keep up the spirit' or even 'keep fighting'," says Elki Hendria, chief strategy and digital officer, Moonfolks. “Pantang Menyerah is another term we use to imply 'never give up'. We saw this during Covid and we’re seeing this again during an economic squeeze. Brands need to fuel this spirit to win hearts of consumers, and a share of their wallet”.