Cracking the Value Code
Despite modest growth of 3% across Indonesia’s FMCG sector, the baby care category is facing a paradox: consumption is rising, yet value remains stagnant. This disconnect is driven by continuous downtrading, with shoppers opting for lower-priced alternatives to their usual brands – resulting in flat growth in spend. Having been prominent since the second half of 2024, this trend has become more pronounced in the most recent period.
Adding to the complexity is the persistent decline in birth rates, which is constraining brands’ ability to achieve growth through new shopper recruitment. The strategic imperative is clear: brands must unlock value from their existing consumer base.
To reignite growth in the baby care category, brands need to shift their strategic lens from volume to value creation. This transformation begins with addressing the stubborn trend of downtrading. To counter this, it is important for brands to invest in innovation and premiumisation, offering differentiated propositions that elevate perceived value and justify higher price points
In addition, brands need to deepen their understanding of shoppers, especially in urban cities where spending is softening. This requires a focus on unlocking growth beyond Indonesia’s key cities.
Targeting high-potential shopper segments is essential to build incremental value
Shoppers in urban key cities are Next Level Shoppers. Digital natives and discerning consumers, they are actively seeking new things that align with their lifestyle and expectations.
In secondary cities, Balanced Aspirers represent a large and influential group. Value-driven yet quality-conscious, they respond well to trusted brands – whether premium or mainstream – if they tell a compelling story.
Meanwhile, in rural areas, reaching Emerging Access Shoppers requires brands to optimise pricing strategies and prioritise strong availability to ensure their products are chosen. As a result, winning shoppers in this environment demands a strategy that balances affordability with aspiration, and relevance with reach.
