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Innovative apps driving disruption in Indonesia

by Merlissa Trisno / Apr 19, 2017

With smartphone penetration set to hit 75%, retailers are leveraging technology to engage Indonesia’s young, tech-savvy population.

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Augmented reality has captured the imagination of retailers and advertisers who are looking at innovative ways to increase consumer sales and improve their return on investment. Indeed, digital platforms continue to disrupt and cannibalise traditional business models, with multinational FMCG firms now devoting one-third of their adspend to online ads. In Indonesia, early adopters are set to grab a bigger piece of the retail pie.

Rapid smartphone penetration Retail firms are leveraging technology to engage Indonesia’s young, tech-savvy population. Smartphone penetration is set to hit 75% by 18CL while mobile-data traffic nearly triples over 16-18CL. Indonesians spend, on average, three hours per day on their smart devices, according to market-research firm Millward Brown. Businesses are increasing their online adspend to capture this growing demographic. Online media companies’ access to customer information also allows retailers to target specific audiences.

Shift to digital marketing The success of transport and delivery app Gojek illustrates the power of the internet and first-mover advantage. Digital advertising is pulling dollars away from traditional media on several fronts: social media allows more bang for the advertising buck; it guides purchasing behaviour by leading customers to the product; boosts product interaction; drives brand optimisation by keeping customers sticky for longer; and supports links to product information.

Brand innovation is alive and well in Indonesia Indonesian interactive-media firm Slingshot has developed a Digital Avatar (DAV). Placed on supermarket shelves, the device gives life to inanimate products so that they can communicate with their consumers, offering more product information, 3D videos, games and promotions.

With scale, augmented-reality initiatives and a wide audience base, innovative retailers are well placed to digitally disrupt in the medium term.