Majority of consumers expect Indonesia to be cashless by 2025, says Standard Chartered
Covid-19 has seen the emergence of a cashless, cautious and more conscientious consumer, according to Standard Chartered’s latest global survey.
Almost 75% of survey respondents in Indonesia (two-thirds around the world) agree that Covid-19 has made them more positive about online shopping, but they are also more careful with their spending and want new ways to track their money digitally, the firm revealed in a press release.
The study of 12,000 adults across 12 markets – Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US – is the second in a three-part series, looking at how COVID-19 has transformed consumers’ way of life, and what changes could be here to stay. While the first survey focused on the pandemic’s impact on earnings, the second offers new insights into the way the global health crisis is changing consumer spending habits.
In Indonesia, consumer preference for purchasing online has increased by 16%; from 40 percent before the pandemic to 56% after. This reflects the global trend, with one-third preferring online shopping prior to the pandemic and almost half (48%) preferring it for future purchases. This increase in preference for online payments is true across a range of purchases, from groceries and travel to digital devices. As a result, 80% of people in the Indonesia (64% globally) now expect the country to go fully cashless, a majority of the public expecting this transition to happen by 2025.
The survey results are supported by Standard Chartered’s ATM withdrawals data. Across the ten surveyed markets where Standard Chartered offers retail banking (all except the UK and US), Covid-19 has dramatically accelerated the decline in ATM usage. Cash withdrawals from ATMs are now half what they were two years ago.
Aside from going cashless, more than half of Indonesians say they are now more likely to shop locally (67%), more sustainably (59%) and with small businesses (60%).
Andrew Chia, CEO, Indonesia, Standard Chartered, said: “This is good news for small businesses and those producing locally made goods, particularly those making and selling sustainably sourced products. This shift is hopefully can support Indonesian government’s Proudly Made in Indonesia (Bangga Buatan Indonesia/BBI) program that encourages shopping for local products, especially from micro-small medium enterprises (MSME), as a way boost domestic spending – a significant contributor to Indonesian GDP.”
As spending begins to creep up as lockdowns ease globally – 55% of those in Indonesia reported increased spending in July (46% globally) – 81% of Indonesians say the pandemic has made them more careful with their expenditure (75% globally).
Reflecting this increased caution, 64% of survey respondents in the Indonesia (62% globally) said that the economic impact of Covid-19 has made them more likely to track their spending, with 85% either using or interested in using budgeting tools, and 78% using or wanting tools that block card-spend over specified limits.
Consumers around the world, including in Indonesia, are now spending more on basics - such as groceries and healthcare - and digital devices than they did prior to the pandemic, and they expect this increase to continue in the future.
Moreover, in Indonesia, 56% of people say they have spent less on travel/holidays than they did before the pandemic (64% globally), while 36% have spent less on experiences (41% globally) and 49% have spent less on clothes (55% globally). This trend is expected to continue in Indonesia with 35% saying they anticipate spending less on travel/holidays, 24% on experiences and 31% on clothes in the future.