Jakarta, Indonesia – Following the recent regulation by the Indonesian government on the use of social media for e-commerce transactions, TikTok Shop has finally announced that it is shutting down its local operations in accordance with local orders.

“Our priority is to remain compliant with local laws and regulations. As such, we will no longer facilitate e-commerce transactions in TikTok Shop Indonesia by October 4, and will continue to cooperate with the relevant authorities on the path forward,” TikTok said in a press statement.

The ban follows a recent government regulation which prohibits the use of social media for e-commerce transactions, adding that it’s aimed at quashing e-commerce sellers that are purportedly abusing pricing tiers on social media to promote their products.

Following this, a question arises: is there still hope for social commerce in Indonesia?

Social commerce will still exist–even with regulations

For Rolly Pane, managing director for Indonesia at Clozette, despite the new regulations, social commerce will still be around, as the new regulations only prohibits having social media and e-commerce inside one app.

“Social commerce can still be done, promoting products in social and driving people to e-commerce. The only difference is that it will not happen in one ecosystem or app. It just has to cross over apps,” Pane told MARKETECH APAC.

However, he noted that with this regulation, there would be a significant drop in e-commerce transactions which originated from social media posts and engagements.

“The biggest downfall is that there will be a larger amount of drop-offs when it is cross-app compared to being in one ecosystem or app,” he said.

Despite all of thise, Pane says that brands can still implement alternative strategies to make their social commerce strategies still stand out.

“Promotion of products will still be done as it is being done now. The only difference is that when the promotions are clicked, it will no longer be in the same ecosystem. It will drive the consumers to a different ecosystem / app to conduct the transactions,” he concluded.

Who loses this game? Merchants or consumers?

Meanwhile, Anish Daryani, founder and president director at M&C Saatchi Indonesia explained that with 2024 being an election year in Indonesia, showing support for MSME’s by securing their interest is considered as an important move by the government.

It is worth noting that the government said that the new regulations aims to protect the interests of micro, small and medium enterprises (MSME’s), given the lack of adoption of digital platforms on their part, and inability to compete with what has been labelled as ‘predatory pricing’ on social platforms.

“On the brighter side, the regulation removes ambiguity from e-commerce and provides clear guidelines towards the dos and don’ts of running e-commerce businesses, which [was] long overdue,” he said in an exclusive interview with MARKETECH APAC.

However, Daryani notes that other local merchants who have long utilised social commerce will ‘lose’ in this game, who have used it to connect with their patrons. He also added that with the new regulations, the livelihood of about 6 million social sellers and 7 million affiliates on TikTok Shop alone were hugely affected.

He also stated that end consumers are also affected as well, whose support to their social commerce merchants were the driving force behind their success.

“In my view, the biggest loser in this regulation, however, is the end consumer, who would now be deprived of exciting prices that were sometimes too good to be true, and discovering great quality products from skilled entrepreneurs, which in itself was a massive support for local businesses,” Daryani added.

Social commerce barely scratches the surface of the local industry

Despite all of these regulations, Daryani believes that social commerce will continue to move forward in Indonesia, adding that there is more growth for the Indonesian social commerce scene, compared to more mature markets like of China’s.

“Though this regulation would bring social commerce to a stop, there is no stopping commerce from becoming more social,” he quipped.

Looking at the issue from an agency perspective, Daryani believes that continued social media communication will still help amplify e-commerce, with social media and e-commerce now serving separate purposes in the customer purchase journey.

“From a communications perspective, digital content will still continue to fuel demand for products and services through the upper funnel (awareness and consideration), while the objectives of the lower funnel (purchase, retention and advocacy) would be met by e-commerce platforms,” he said.

He also added, “The use of influencers to review and recommend products will continue to expand. Overall, this would make discoverability of content more organic, so the quality of content would have to be better going forward.”

Indonesia – The Asia Video Industry Association (AVIA) has released a study with Milieu Insight to understand the usage of different video services in Indonesia and consumer attitudes towards them. The study looked at video across social media, user-generated content (UGC), linear TV, messaging services and premium OTT.

Data given by AVIA and Milieu Insight suggested that amongst Indonesians, UGC and social media content garners more attention in audience engagement and advertising, but premium OTT has the best content according to 75% of respondents.

Indonesian consumers also associate premium OTT the most with positive emotions. When asked about feelings after watching an hour of different types of content, premium OTT services significantly outscored user-generated content and social media in eliciting happiness (51%) and amusement (73%).

According to the study, while premium OTT is still at an earlier stage of development in Indonesia than free UGC and social media services like YouTube and TikTok, it is clear that those who use premium OTT value it more. When asked what video services they would first be prepared to forego, only one in the top ten services was premium OTT, and the top 4 were all social media or UGC services.

Talking about the results, Louis Boswell, CEO of AVIA, said, “We believe the power and opportunity of premium OTT is hugely significant and offers a real and relatively untapped opportunity for advertisers in Indonesia. The proven quality of the environment, the stickiness of the content and the positive emotions created by it are critical for advertisers, and this study clearly demonstrates that.”

“Given the dominance and high penetration of UGC and social media video services in Indonesia, the fact that this smaller but growing category of premium OTT performed so well in these categories is quite remarkable. We believe advertisers need to sit up and take note,” he added.

Indonesia – Wunderman Thompson has named Samir Gupte as the new chief executive officer for its operations in Indonesia. 

Gupte comes from Ogilvy, where he most recently served as executive director and head of operations, and brings with him more than 25 years of experience within WPP.

Gupte spent 23 years with Ogilvy, dividing his time between Indonesia and India. He moved from India to Indonesia in 2013 and began working for OgilvyAction as the managing director. He led in the merger that created Geometry Global at this time. He made a transition to SohoSquare, Ogilvy’s second integrated agency, later in 2016.

After serving in that capacity for two years, Gupte was appointed managing director of Ogilvy Indonesia. In this role, he oversaw client interactions and built a diverse, effective team. The agency acquired clients during his leadership, including Kimberly-Clark Softex, Converse, Sunpride, and Asian Paints. 

Speaking about his new role, Gupte said, “I am really excited about this next chapter in my career. Having worked very closely with Wunderman Thompson teams on key clients like Nestle and Unilever, I am aware of the sheer talent and the potential that exists within the agency. The current leadership team has done a great job of consolidating the different services within the agency. My focus now will be to strengthen our capabilities in CX, data, content and ecommerce, and drive growth for our clients in Indonesia.”

Meanwhile, Audrey Kuah, APAC CEO of Wunderman Thompson, remarked, “Samir brings vast integrated marketing experience growing some of the world’s largest brands in Southeast Asia’s largest economy. His expertise in integrating brand, digital, data and technology, combined with his growth ambition for us, we are pleased to have Samir join our leadership team.”

Singapore – Around 74% of marketers in Indonesia cited advanced machine learning technology as the most important factor when selecting mobile app performance marketing solutions, according to data from Moloco. 

The new global study found that marketers are adopting data-driven solutions and prioritising performance marketing over traditional brand marketing. 

Globally, 63.2% of companies surveyed saw a year-on-year boost in their mobile app performance marketing budgets compared to the revenue from brand marketing. This shows that mobile app performance marketing has a clear and resounding power to drive revenue, user acquisition, and profit, especially during times of economic uncertainty.

In Southeast Asia, the use of advanced machine learning (ML) came out as the number one factor when selecting a mobile app performance marketing solution.

Especially in Indonesia, a staggering 74% of marketers consider advanced ML to be the most important factor for precise targeting in mobile app performance, followed by Vietnam (60.4%) and Japan (52%). Meanwhile, only 22.6% of marketers in Korea and 22.3% in Singapore prioritise advanced ML when selecting a mobile app performance marketing solution.

Indonesia, with 61%, also takes the lead when choosing APRU (average revenue per unit) as the preferred KPI, which is higher than the rest of the markets in SEA and globally.

In terms of budget allocation for mobile app marketing, companies in every country surveyed allocated more than half their marketing budgets to mobile ads, with Indonesia ranking the highest at 81.8% while Singapore and Vietnam allocated 59.2% and 58%, respectively.

It is worth noting that performance mobile app marketing continues to grow consistently across all industries, with 64.7% of surveyed companies increasing their mobile ad marketing budget in 2023 compared to the previous year.

Daisuke Yokokawa, vice president of global marketing at Moloco, said, “The global shift in marketing from reach to results continues to gain momentum across different countries and various industries.” 

He added, “Many mobile app marketers are aware that the secret of big tech’s success in advertising is advanced ML technology and the performance marketing solutions that they provide. This global trend is due to the clear and resounding power that mobile app performance marketing has to drive revenue, user acquisition, and profit, especially during times of economic uncertainty.”

Meanwhile, Jennifer Ha, project leader and partner at Ipsos Strategy3, said, “Performance marketing is on trend, regardless of the country.Marketers are typically loath to share their best kept secrets, but thanks to this anonymized research study, we now have detailed insights about their strategic marketing decisions and investments. Ultimately, having consistent results such as measurable and impactful ROAS underpins the success of many global performance marketing budgets.”

Jakarta, Indonesia – The Indonesian government has officially prohibited the use of social media for e-commerce transactions, a move that was previously hinted by President Joko Widodo several days ago.

For the government, the move is aimed at quashing e-commerce sellers that are purportedly abusing pricing tiers on social media to promote their products, a move that officials say ‘kills’ offline merchants.

“What the people are expecting is that the advancement of technology can create new economic potential, not kill existing economies,” President Widodo previously said.

In a recent announcement, Trade Minister Zulkifli Hasan has noted that social media can be only used to promote things, not use it as an avenue for online transactions.

“Social commerce is only allowed to facilitate the promotion of goods or services, not direct transactions. Direct payment is no longer allowed, it is only allowed for promotion,” he said.

Several Indonesian officials have said that TikTok is one of these platforms where social e-commerce is mostly practiced.

Previously, TikTok Indonesia clarified that its latest shop-centric initiative, ‘Project S’, will never be launched in the market, and that they do not intend to become a retailer or wholesaler that will compete with sellers in Indonesia.

Singapore – Indonesian on-demand coffee company Fore Coffee has announced the launch of its first store in Singapore, marking its entry into the international market scene. 

Fore Coffee’s expansion to Singapore is expected to open up the Indonesian coffee culture in the region. 

Drawing on insights from flavor group discussions (FGDs), the coffee company will tailor a selection of 16 key SKUs to capture the essence of Singaporean coffee culture. It will also adhere to the local nutrition preferences with the aim of empowering individuals to enjoy their drinks consciously while promoting healthier choices through its affordable and accessible diversity of options. 

Fore Coffee’s entry in the new market is also guided by research focusing on the Singaporean coffee landscape, in collaboration with strategy consultant Redseer. According to the research, the coffee market in Singapore is projected to grow at a CAGR of 5%, which means it will reach $1,286 million by 2027, presenting a compelling opportunity for the company to flourish. 

Furthermore, Singaporeans’ strong affinity for coffee, averaging 6-7 cups per week, aligns perfectly with Fore Coffee’s mission. The brand recognizes the mature coffee market in Singapore, combined with a love for Indonesian beans, particularly Arabica. 

Fore Coffee aims to redefine Singapore’s coffee culture in the ‘Indonesian way’ by extending their highly curated coffee beans and signature coffee blends to the new market. 

The brand’s business journey has been marked by profitability since 2021 in Indonesia, even amidst pandemic challenges. A part of its success lies in its adept use of cutting-edge technology, from tools to its mobile app, combined with skillful bean blending techniques.

Vico Lomar, co-founder and CEO at Fore Coffee, said, “Fore Coffee’s brand positioning and menu reflect its role as an ambassador of Indonesian coffee culture in Singapore. The brand’s signature coffee blends, crafted with a deep understanding of the discerning Singaporean palate, redefine the local coffee landscape through an Indonesian lens.”

Jakarta, Indonesia – The Asia Video Industry Association (AVIA) and the Video Streaming Association of Indonesia (AVISI) have signed a Memorandum of Understanding (MoU) in Jakarta to fight piracy and protect and promote content in Indonesia. 

The signing of the MoU was held at the Coalition Against Piracy’s (CAP’s) State of Piracy Summit. It marks a closer collaboration and a significant step towards AVIA and AVISI combining their resources to fight online piracy and protect Indonesia’s creative and media industries.

The AVISI and AVIA partnership also marks a significant milestone in the ongoing struggle against piracy, reaffirming AVISI’s unwavering dedication to upholding a piracy-free digital-creative industry. 

Both associations pledge to strengthen defenses, promote legal access to content, and champion the rights of content creators, ensuring that creativity thrives and piracy recedes.

Representatives from Indonesia’s Ministry of Communication and Information Technology (Kominfo) were also in attendance at the signing of the MOU, which followed a panel at the State of Piracy Summit hosted by AVIA and attended by representatives from Kominfo and AVISI.  

The signing of the MOU comes at a time when CAP’s most recent annual consumer surveys show that 54% of consumers in Indonesia access pirate services in 2023, the fourth highest incidence of piracy in the region. However, the survey also revealed the growing awareness of the downsides of piracy, with 94% of Indonesian consumers believing that online piracy has negative consequences, the highest percentage in the region, with damage to the creative industry being the biggest perceived negative impact.  

Ajeng Parameswari, general secretary of AVISI, emphasized the core mission behind AVISI’s inception and further underscored the imperative for a collective, amplified response to piracy. 

Parameswari said, “AVISI was established to cultivate a thriving ecosystem for the digital-creative industry, one that harmonizes seamlessly with the video streaming business model. Yet, the primary challenge we confront today is the pervasive threat of piracy.”  

“AVISI is delighted to announce a pivotal partnership with AVIA, aiming to widen the battle against piracy, transcending borders and safeguarding content not only within Indonesia but also on an international scale. The eradication of piracy is a shared responsibility, one that must resonate as a resounding deterrent to those who perpetrate it. In this endeavor, government support is pivotal,” she further added. 

Meanwhile, Louis Boswell, CEO at AVIA, said, “We are delighted to join with AVISI to continue the fight against online video piracy. Piracy is the single biggest problem the video industry faces and to solve  the problem there has to be a multi-pronged approach.” 

Boswell also noted, “With the creation of AVISI, I believe we will have  greater success and engagement with the industry in Indonesia to continue working towards  solutions. And we have to acknowledge the great support of the government with the Ministry of  Communication and Information Technology (Kominfo) who have been such great partners in addressing  and mitigating the problems of piracy. With our new relationship with AVISI and Kominfo support, I am  more optimistic than ever that momentum is growing which will continue to stem the tide of piracy in  Indonesia.”  

Jakarta, Indonesia – The Indonesian video industry is set to reach a value of US$2.5b this year and ballooning up to US$3.7b in 2028, a new report from Media Partners Asia has stated.

According to the report, TV’s share, including net advertising and subscription, dropped to 48% from 56% in 2023, as the shift to online video accelerates, led by UGC and social video as well as including premium video-on-demand (VOD), including freemium and SVOD platforms.

Surya Citra Media (SCMA) and MNC will remain market leaders in terms of monetisation with SCMA a clear beneficiary from the shift to digital terrestrial television (DTT). 

Meanwhile, linear-based pay-TV adoption will continue to decline, as pay-TV’s incremental growth remains anchored to bundles of home broadband and payTV offered by players such as Telkom Indonesia and Axiata-owned LinkNet.

In terms of online share of the video industry, the report notes that revenue will grow from 44% in 2023 to 52% by 2028. UGC and social video, driven by YouTube and TikTok, lead monetisation, with UGC expected to grow advertising at 12% over the next 5 years for a 26% share of total video industry revenues by 2028. Meanwhile, SVOD is expected to grow at 11% over the 2023-28 period in order to grow market share in total video from 16% to 19%. Premium AVOD, meanwhile, is forecasted to grow at 16% from a low base with total video industry market share rising from 5% to 7% over the 2023-28 period.

Lastly, the report notes that Indonesian content investment grew 13% in 2022 to US$979m, representing Southeast Asia’s largest video content market. FTA remains the largest video content investment vertical. Meanwhile, online video content (local entertainment and sports) investment is the fastest growing as Netflix, Amazon and SCMA’s Vidio continue to invest through 2023. The report projects video industry content investment to grow 6% to just over US$1b in 2023 with online video rationalizing a notch. 

Vivek Couto, executive director at Media Partners Asia, said, “The advertising economy endured a poor 1H 2023; this will be partially offset by a stronger 2H 2023. TV is in the doldrums with annual ad declines over 2022 and 2023. TV ratings continue their gradual decline as audiences drift online. Free TV remains critical for mass ad campaigns, but growth is capped, held up largely by local consumer brands. Meanwhile, Indonesia remains Southeast Asia’s most intense battleground for streamers.” 

He further added, “By consumption and value, it is the largest market in SEA. Improvements in the quality of local content, combined with the proven viability of Korea content and localized tier-1 US content, has helped drive user acquisition and engagement. More rational pricing and packaging is helping to slowly boost per subscriber economics. The challenge remains the growth of free VOD platforms YouTube and TikTok. Both dominate viewership on mobile while YouTube is also increasingly popular on CTV. YouTube also remains the VOD category leader in terms of revenues by some distance though TikTok is growing rapidly while Netflix leads SVOD.”

Jakarta, Indonesia – Rumah.com, the Indonesian marketplace counterpart of proptech company PropertyGuru, will be shut down by November 30 this year. This was according to a letter sent out by Hari V. Krishnan, group CEO and managing director at PropertyGuru, to employees.

According to Krishnan, up until the day they cease Rumah.com’s operations, they will continue to serve their Rumah.com agent and developer partners to ensure minimal disruption to their business operations, as well as refunding the fees paid by them as per the respective contracts.

Meanwhile, for their vendor partners, they will pay the dues as per the individual contractual commitments. 

“This decision has not been taken lightly, and we recognize the impact it will have on our valued Gurus and customers, who we have served for well over a decade,” he said.

All of the 61 employees affected by the shutdown will be offered enhanced packages, healthcare support and assistance in their transition to new opportunities, Krishnan also added.

He also announced that it is also shutting down its SaaS product FastKey across all of their markets. It will shut down first in Indonesia on July 31, 2024, and in Malaysia and Singapore on October 15, 2024.

“To our consumers, customers, and vendors, especially those in Indonesia, who have been by our side throughout this journey, we extend our deepest gratitude. Your partnership and trust have been invaluable to us, and we cherish the relationships we have built over the years,” he said.

Indonesia – McDonald’s Indonesia has revealed its new J-Pop advertisement jingle titled ‘Nihon No Fureeba’ written fully in Japanese, to promote the relaunch of McDonald’s ‘Taste of Japan’ burgers.

‘Nihon No Fureeba’ is a full, untranslated Japanese pop song made to promote the comeback of McDonald’s Taste of Japan burgers in Indonesia. The song’s lyrics talk about crispy nori and yakiniku sauce, ingredients highlighted on the fast food chain’s Japanese flavoured-inspired burgers. 

Written in a completely different language, the message the advertisement jingle aims to highlight is that even though some might not understand McDonald’s onigiri-looking burgers, they’ll love the taste anyway. Just  like they love Japanese songs. 

Advertising agency Leo Burnett’s cultural findings on Indonesians’ adoration for Japanese pop songs propelled the idea of creating the jingle. The agency tapped Indonesian-Japanese singer Ica Zahra to create the song, which was released as a Japanese single without subtitles.

Within one week, the music video was watched more than three million times. The song became the talk of the radio, and hundreds of covers and TikTok dances were made. 

Soon after, the agency and the singer revealed that the song, which most people didn’t understand but still listened to, was actually an untranslated ad to promote McDonald’s product relaunch. The jingle has topped the country’s music charts and become the #1 search on music search application Shazam causing a huge jump on the burger’s first-week sales. 

With the launch of ‘Nihon No Fureeba’, people’s curiosity towards the burgers spiked so fast that first-week sales surpassed those of the past 3 years. 

“Because no one knew that it was an ad. The lyrics were in Japanese, untranslated, and  people thought that it was just a nice feel-good J-Pop song!” explains Ravi Shanker, chief creative officer of Leo Burnett Indonesia on how an ad became a popular favorite pop song in the country. 

“Japanese pop culture is strong in Indonesia. People love Japanese pop songs and put  them in their playlists, sing along, even wearing cool t-shirts with Japanese letters—all  without understanding what they mean,” he continued. 

Meanwhile, Michael Hartono, marketing director at McDonald’s Indonesia, said, “At the end of the  day, the campaign is making people love not only the burgers but also the brand. Even after people realized that it was an ad, they still continue doing karaoke with it, and  the song–I mean the jingle–is now in thousands of Spotify playlists to this day.”