The annual market research buyer survey conducted in Singapore for the last eight years has been extended to Indonesia since 2011. The 2015 survey, conducted in April and May, surveyed 100 individual buyers of research in Indonesia and obtained insights into research procurement in this increasingly important and very sizeable market.
Similar to the Singapore buyer survey, those surveyed were mainly research/insight managers or marketing managers of MNCs or large corporations. The survey was conducted exclusively among those who engage an external market research firm for analysis and reporting at least once a year.
During the early part of the decade, Indonesia had been the boom market for Asia – according to ESOMAR, growth of 50% was recorded between 2010 and 2013, and this was reflected in the 2012 and 2013 Asia Research survey data, which reported a net 63% and 59% of clients stating increase in research budgets over the previous year respectively.
However, in 2014 the market began to soften, with a net 36% reporting growth in budget in 2014 and only a net 29% in this year’s survey. Those reporting a decline in research budget increased from 5% in 2013 to 9% in 2014, and to a significant 16% in 2015. With a mainly domestic market, some of the economic fundamentals in Indonesia are causing worry within client organisations, although a weak Rupiah should help FDI and the export market.
Jakarta is the major focus of research in Indonesia, with 68% of total market research spending by corporations. As Jakarta represents only 13% of Indonesian GDP, it shows how massively under-represented the other regions of Indonesia are in its national research. This contrasts with other large markets such as China and India, where research usually samples a much broader geography. Indonesia is as diverse as these other markets, and the lack of spending in other regions of Indonesia is perhaps a product of habit; for example, most research has traditionally been done in Jakarta or, due to insufficient research resources and capabilities in other parts of Indonesia.
As in other markets, Indonesia is seeing some structural changes placing some pressure on the research agencies. For example, about 70% of client research departments in Indonesia insource at least some of their research, including qualitative (22%), analytics (20%), interviewing (11%), desk research (10%), and online surveys through customer databases (9%). These figures are not as high as in Singapore, but client DIY research in Indonesia has increased significantly from just 12% in 2013 to 34% in 2015 and demonstrates a trend towards more in-sourcing for the future.
Clients are spreading their research spending among a wider range of suppliers. MNC and independent MR firms are the main sources of research, but between 25% and 36% of clients are using management consultants, freelancer researchers, branding consultants, and specialist analytics firms for their research needs. Community Panels are not yet catching on in Indonesia, being used by just 3% of clients in Indonesia compared to 17% in Singapore, and relatively few clients engage online panel companies directly even though the quality and extent of panels in Indonesia is improving.
The survey shows that 65% of clients had some form of complaint about their agencies in Indonesia compared to just 40% in the corresponding survey in Singapore. Indonesian agencies still need to improve in areas of analysis and client servicing that are still lagging behind other markets. Clients should also be convinced to represent more of the Indonesian market through additional research in the other Tier-1 cities and beyond. Technology will help as online and, more importantly, mobile research allows research firms to go beyond the traditional research centre of Jakarta.