FMCG market in Indonesia - statistics & facts
The fast-moving consumer goods (FMCG) market in Indonesia is on rapid ascent. Fueled by rising incomes and urban lifestyles that drive higher demand across the board, Indonesia’s FMCG market is one of the largest and fastest growing among its peers in the Southeast-Asian region. Despite the current inflation, the market remains relatively strong, showing an overall positive year-on-year change in FMCG market value of 5.7 percent in the second quarter of 2024.
The FMCG industry in Indonesia is dominated by both multinational and local players. Multinational companies such as Unilever Indonesia have animated the industry by providing more product options to Indonesian consumers, ranging from personal care to food products. Local market players such as Indofood have proved that local capabilities can compete well in the FMCG sector. In 2023, one of its products, Indomie, ranked first among the leading FMCG brands in the country, with a penetration rate of around 97 percent among Indonesian households. In addition, the net sales of PT Indofood Sukses Makmur Tbk, or Indofood, have been showing a steady upward trend since 2014, accounting for sustained growth in the FMCG market.
Meanwhile, growing sustainability awareness has shifted consumer preferences in recent years. Consumers are becoming more aware of the impact of their purchases and are increasingly prioritize sustainable, eco-friendly products. A recent survey indicated that more affordable, accessible sustainable products would further encourage the adoption of sustainable consumption in Indonesia.
Indonesia's FMCG market is experiencing significant growth, supported by rising incomes and shifting consumer preferences despite inflationary challenges. By adapting to the increasing demand for online shopping and affordable, sustainable products, both local and multinational brands are well-positioned for continued success in this dynamic landscape.
The FMCG market landscape in Indonesia
The FMCG market in Indonesia has advanced along with the increase in demands and changing lifestyle of its population. Since 2018, Indonesian households have allocated almost 20 percent of their total household expenditure for FMCG products. In the third quarter of 2023, every FMCG segment in the country saw an increase in the average consumer spending per trip, with the food segment recording the highest change. As for its distribution, traditional trade was the main sales channel for FMCG products in the country, with a 69 percent market share in the second quarter of 2024. While offline channels, such as traditional trade, continue to dominate the market, online sales channels have been seeing growth. The online grocery delivery market has experienced growth in the last few years, with revenues expected to reach around 27 billion U.S. dollars by 2028.The FMCG industry in Indonesia is dominated by both multinational and local players. Multinational companies such as Unilever Indonesia have animated the industry by providing more product options to Indonesian consumers, ranging from personal care to food products. Local market players such as Indofood have proved that local capabilities can compete well in the FMCG sector. In 2023, one of its products, Indomie, ranked first among the leading FMCG brands in the country, with a penetration rate of around 97 percent among Indonesian households. In addition, the net sales of PT Indofood Sukses Makmur Tbk, or Indofood, have been showing a steady upward trend since 2014, accounting for sustained growth in the FMCG market.
Current consumer behavior
Despite the positive growth in the Indonesian FMCG market amidst inflation, Indonesian consumers are becoming increasingly cautious with their spending. Many Indonesian consumers are increasingly looking for ways to save money to cope with inflation. Many opted for purchasing cheaper alternatives and looking for deals when shopping.Meanwhile, growing sustainability awareness has shifted consumer preferences in recent years. Consumers are becoming more aware of the impact of their purchases and are increasingly prioritize sustainable, eco-friendly products. A recent survey indicated that more affordable, accessible sustainable products would further encourage the adoption of sustainable consumption in Indonesia.
Indonesia's FMCG market is experiencing significant growth, supported by rising incomes and shifting consumer preferences despite inflationary challenges. By adapting to the increasing demand for online shopping and affordable, sustainable products, both local and multinational brands are well-positioned for continued success in this dynamic landscape.
