Thailand
Indonesian consumers remain anxious despite ‘new normal’: Reports
Indonesian consumers remain anxious about embarking on the so-called “new normal” as shown in a continued reluctance to go out despite the easing of travel restrictions, resulting in a sustained home-based economy, consumer research firms have reported.
According to a report by market research firm Kantar, almost half of all Indonesians are still worried about going out. Between June 9 and 19, 46 percent of over 4,000 respondents said they were still worried about leaving home. Between June 4 and 8, that figure was only 40 percent.
In line with that trend, the percentage of people wanting to go out decreased. Between June 4 and 8, 32 percent said they were “eager to start hanging out with friends” and 23 percent said they were “dying to eat out”.
Between June 9 and 19, however, the number dropped to 28 percent and 15 percent, respectively, indicating a sustained trend for home-cooked meals.
Meanwhile, 45 percent of respondents said they would continue to eat only home-cooked food.
“You would expect that people would be less concerned. However, on the other hand, the number of [COVID-19] cases in Indonesia is increasing on a daily basis,” said Venu Madhav, general manager at Kantar Worldpanel division, during a webinar on consumer behavior held by the British Chamber of Commerce Indonesia on July 2.
People’s anxiety levels are still high, according to Kantar’s COVID-19 anxiety meter, with 68 percent of respondents saying they were “concerned”, as of mid-June. When the firm started to track Indonesians’ COVID-19 anxiety levels in mid-March, only 43 percent said they were concerned.
The government hopes to reopen the economy following its relaxation of large-scale social restrictions (PSBB) in June, prompting the country to enter a transition period into the new normal.
However, the nationwide infection rate continues to rise and Madhav referred to this as the reason why Indonesians were generally still anxious. On Tuesday, officials announced 1,268 new confirmed COVID-19 cases, bringing the total number of cases nationwide to 66,226 with a death toll of 3,309.
Despite the increasing number of cases, Kantar’s report shows that financial anxiety is on a downward trend. People who responded that they would reduce spending to save money fell to 39 percent from 47 percent and those who said they were worried about their job or income fell to 44 percent from 52 percent.
Research company Nielsen, on the other hand, reported that monthly household spending had decreased by 7 percent in the first quarter this year against the same period last year.
“Income compression led to consumers across socio-economic classes adjusting household expenditure by limiting spending on leisure,” Nielsen report says.
Mia Triscahyani, Nielsen Indonesia consumer panel service director, explained during the webinar that consumers were prioritizing items in the “fresh and staple” category while reducing spending on recreation, entertainment and dining out.
Among lower socioeconomic status (SES) families, spending on leisure dropped 28 percent year-on-year (yoy) while saving and loan activities fell 18 percent. For the middle SES families, leisure dropped 32 percent while spending on education fell 20 percent.
Meanwhile, the upper SES families segment recorded reduced leisure expenditure by 43 percent in the first quarter this year, while their transportation expenses were down by 27 percent.
“The spending decline in leisure happens consistently across all SES with the upper SES contributing the most to the decline, considering they are the ones who usually have higher spending compared with other SES,” Mia explained.
From 100 respondents that Nielsen Indonesia surveyed to understand the range of activities that consumers had done and would do again when visiting malls, Nielsen found that the top-two reasons why people will visit malls amid the new normal are “purchasing groceries” (65 percent) and “looking for a refreshing atmosphere” (65 percent).
Before the pandemic, the top consumer motivations when visiting malls were to purchase fast food (79 percent), purchase beverages (71 percent) and to see movies (71 percent).
“However, we must expect that consumers will not be spending as much time inside malls as before, especially those who are concerned with the health and safety of their own families,” Mia noted. She added that whether or not less window shopping would lead to less actual shopping was still undetermined.
According to Google’s COVID-19 Community Mobility Report, Indonesia’s retail and recreation mobility trend had gone down by 23 percent as of June 27, compared with the baseline. The baseline is the median value for the corresponding day of the week during a five-week period between Jan. 3 and Feb. 6.
In contrast, mobility trends for places of residence were up by 10 percent compared with the baseline as of June 27. This indicates that despite the easing of restrictions, more people in Indonesia are still choosing to stay at home, Google said.
Source: https://www.thejakartapost.com/news/2020/07/07/indonesian-consumers-remain-anxious-despite-new-normal-reports.html