With the aim of assisting Indonesian firms in prevailing over the worldwide epidemic, McKinsey conducted a research on Indonesians’ consumer behavior during and after the pandemic. We have summarized three highlights of the report: a reduction in Indonesians’ optimism about the economic recovery after the pandemic; an accelerating trend towards a change in the selection of retailers; a significant change in Indonesians’ daily habits.
As of 7 June, the Government of Indonesia has announced 31,186 confirmed cases of COVID-19 across all provinces of the country, with 1,851 deaths, 14,197 patients under surveillance and 40,370 people under observation. Undoubtedly, following the pattern of other countries, Indonesia has witnessed a decline in economic activities.
With the aim of assisting Indonesian firms in prevailing over the worldwide epidemic, McKinsey conducted a research on Indonesians’ consumer behavior during and after the pandemic. We have summarized three highlights of the report:
– A reduction in Indonesians’ optimism about the economic recovery after the pandemic;
– An accelerating trend towards a change in the selection of retailers;
– A significant change in Indonesians’ daily habits.
1.A REDUCTION IN INDONESIANS’ OPTIMISM ABOUT THE ECONOMIC RECOVERY AFTER THE PANDEMIC
- Optimism about an economic recovery has declined to its lowest level since March
At the end of May, more than half on the Indonesians feel pessimistic about the economic recovery of their country after COVID-19. This confidence index is the lowest since March, showing a decline in optimism among the whole inhabitants.
- Three-quarters of Indonesians have experienced decreased income
One of the most cogent reason causing this pessimism is an actual decline in Indonesian’s income. Since April, approximately 70% of the citizens have witnessed a slight or significant decrease in their household income.
- Most Indonesians are being careful about spending, and two-thirds are cutting back
A decline in income and optimism has lead to a tendency for the residents to be more rigorous in spending. Roughly two-thirds of the Indonesians have cut down on their spending. Furthermore, more than 80% of citizens stated that they had to be very careful when making purchasing decisions due to the economy uncertainty.
2. AN ACCELERATING TREND TOWARDS A CHANGE IN THE SELECTION OF RETAILERS
- More than one-quarter of consumers have switched brands and retailers, and many expect to continue after the crisis
COVID-19 has exerted its impact on the consumers’ selection of retailers and brands. A large percentage of customers said that they have switched to shop at a new website as well as changed primary grocery store, 31% and 27% respectively. This trend is expected to continue even after the pandemic.
- Cleanliness is the most important factor for consumers as the decide where to shop in-store
Due to corona virus, many citizens have shifted their focus to health concerns. That’s why cleaning and sanitization are the top priorities of consumers when it comes to criteria for shopping in-store.
3. A SIGNIFICANT CHANGE IN INDONESIANS’ DAILY HABITS
- Consumers expect to continue spending more time cooking, consuming video content, learning online, and connecting virtually
Without a doubt, there are dramatic changes in the daily habits of Indonesians during and after COVID-19. Roughly more than half of the Indonesians spend more time preparing meals at home, learning online and watching video content. Inhabitants also claim that there is prospect that this tendency will continue even after the epidemic.
- Post-COVID-19 intent to continue is higher for online streaming, contactless purchase, and telemedicine
After having experienced the convenience of digital platforms, a large proportion of consumers declared that they would proceed with online shopping, online streaming, telemedicine, 78%, 74% and 73% respectively.
- Post-COVID-19, consumers plan to reduce in-person activities as well as online shopping
Generally, in the post-COVID-19 period, almost all Indonesians expect to cut down on their in-person activities. Traveling (both international and domestic), attending crowded events such as concerts, movie theaters are among the least potential activities.
In a nutshell, it is undeniable that COVID-19 has brought about uncertainty and dramatic changes in the business environment. One of the most crucial aspects that businesses need to have a great understanding of is their consumers. This article have highlighted three typical points in the consumer behaviors. First, there has been a decline in Indonesians’ optimism about the economic recovery after the pandemic. Second, there is an accelerating trend towards a change in the selection of retailers. And finally, Indonesians’ daily habits have been changed significantly.