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Digitalization and personalization key for Indonesia’s foodservice sector growth, says GlobalData

Indonesian food (Photo: Image by jcomp on Freepik).

Amid dynamic trends, Indonesia’s foodservice market is rapidly evolving. From surging demand for out-of-home dining and the rise of online food delivery, to personalization and affordability concerns, these transformations present ample opportunities for stakeholders, according to GlobalData.

The foodservice market in Indonesia has been experiencing dynamic trends that reflect the country’s diverse culinary landscape and evolving consumer preferences. From the influence of digital technology to the growing emphasis on personalized menus, the industry has undergone significant transformations in recent years. As one of the largest and most vibrant markets in Southeast Asia, understanding these trends is crucial for stakeholders seeking to stay ahead in this thriving sector, according to GlobalData, a data and analytics company.

Srimoyee Nath, Lead Consumer Analyst at GlobalData, comments: “After a substantial dip in 2020, there was a surge in pent-up demand for out-of-home dining experiences in Indonesia. Consequently, both dine-in and take-away services experienced a robust rebound, with the annual transaction value showing double-digit growth in 2021 and 2022. Despite the enthusiasm for dining out, the pressure of high inflation compelled low-income households to limit their spending on extravagant dining experiences. Food deliveries and take-aways can aid consumers in avoiding impulse orders, restaurant service charges, and to-and-fro travel costs.

“Accordingly, 34% of Indonesian respondents in GlobalData’s 2023 Q1 survey* said they are starting to or continuing to order take-away/delivery from restaurants, or are doing so more frequently. In comparison, only 23% said the same for eating out at restaurants over the next three months.”

Deepak Nautiyal, Director of Consulting, APAC, GlobalData, notes: “With a surge in online food delivery, the concept of cloud kitchens and virtual restaurants has also emerged. These establishments are further penetrating the market to gain a stronger foothold. For instance, Legit Group, an Indonesia-based pureplay multi-brand cloud kitchen and food-delivery company, raised $13.7 million in its Series A funding round in April 2023 to expand its business. Leading venture capital firms, such as MDI Ventures, Sinar Mas Digital Ventures, East Ventures, and Winter Capital participated in the funding round, reflecting the strong interest in Indonesia’s online food delivery market.”

Nath continues: “Indonesian consumers are seeking more personalized dining experiences, with restaurants responding by offering customizable menu options. This allows customers to tailor their meals according to their preferences, dietary requirements, and taste preferences. As such, Indonesian consumers choose restaurants based on the availability of healthy menu options (62%), unique flavors (48%), and affordable menu items (43%), among other factors, as evidenced in GlobalData’s 2022 Q4 consumer survey**.”

Nautiyal adds: “Indonesia’s high inflation rate has made consumers to opt for cheaper and value-for-money meals. According to the GlobalData 2023 Q1 consumer survey, 73% of Indonesian consumers said their choice of service is either always or often influenced by how it aligns with their time and money constraints. In response to this, McDonald’s Indonesia recently ventured into the catering business with the launch of the wedding catering package “Wedding Mekdi”, offering a pack containing 100 chicken burgers and 100 four-piece McNuggets. The launch of its wedding menu was announced on its Indonesian Instagram account in June 2023. This new offering by McDonald’s can attract price-conscious consumers seeking economical food options to serve their wedding guests.”

Nath concludes: “The Indonesian foodservice market is experiencing a period of rapid evolution, driven by various factors that cover the diverse needs and preferences of consumers. Despite the challenges posed by the COVID-19 pandemic and economic pressures, the foodservice market in Indonesia has demonstrated resilience, with an evident rebound in dine-in and takeaway sales. As the industry continues to adapt to changing circumstances and consumer demands, it presents numerous opportunities for businesses and entrepreneurs to flourish in this thriving and dynamic market.”

 

*GlobalData Q1 2023 Consumer Survey­ – Malaysia with 500 participants, published in July 2023
**GlobalData Q4 2022 Consumer Survey – Malaysia with 500 participants, published in March 2023

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Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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