Indonesia’s total FMCG value grew by 7% during 2024. As economic pressures and uncertainty persisted, shoppers continued to reassess their spending priorities. With no significant improvement in GDP growth, consumer confidence has stagnated, despite inflation slowing down. This has created a complex landscape for FMCG in 2025, with varied impacts across sectors and socio-economic groups.
The beauty sector continues to lead growth, achieving an impressive 16% increase in value sales through 2024 as consumers showed a willingness to spend on premium products. Growth in the personal care sector is more limited, with shoppers opting for better value for money by upsizing their purchases.
Another growth driver was the rebound of spending in the snacking and dairy sectors during the festive season. This helped snacking foods to achieve growth of 13%, while the dairy sector turned a decline of -2% into growth of 9%. Brands in these sectors can leverage this momentum to create more occasions beyond the festive season. Biscuits and instant coffee are also gaining traction, signalling a shift toward in-home snacking and indulgence.
On the other hand, value growth in home care and pantry essentials remained stable, as shoppers grappled with price rises. This could herald an opportunity for brands to offer better value for money options in the shape of big packs or multipacks.
Different SES, different priorities
Overall, household spending has grown 7.6% over the last year, driven by upper-class shoppers who are able to allocate more of their budget to categories beyond food. In contrast, economic pressures are hitting mid-to-low socio-economic segment (SES) shoppers hardest, forcing them to find ways to become more resilient. They are focusing expenditure on necessities, and have become less experimental in terms of the brands and products they choose.
The range of different coping strategies employed across socio-economic groups highlights the varied impact of economic pressures. Brands should consider both enhancing affordability, while providing innovation and novelty for those more able to explore.
Looking ahead to 2025, the challenges facing Indonesians are likely to intensify, potentially constraining their FMCG spending. Our advanced analytics forecast indicates slower growth across FMCG sectors.
Within this context, understanding the dynamics of each category and each SES is crucial if brands are to develop more effective strategies to recruit more shoppers and increase basket size this year.