Gen Z: the new force in the Indonesian market

In March, Gojek was named Gen Z’s public transport of choice at the Marketeers Youth Choice Awards – a youth-focused awards event. Indonesian college students who voted preferred Gojek compared to public trains and the super app’s rival Grab.

Gen Z, consisting of those currently between the ages of 11 and 26, has serious sway on how companies operate today. As this generation grows in number and purchasing power, it’s becoming an increasingly important segment for businesses, including those in the tech world.

Individuals of this demographic group are known for their tech-savviness, diverse perspectives, and strong desire to make a positive social and environmental impact, so brands are aligning their values, goals, experiences, and technologies accordingly.

Some members of this generation are just starting to join the workforce, representing a significant portion of future consumers and employees.

Making up around 28% of the total population, Gen Z is Indonesia’s largest generation today. By 2030, everyone of this group will be in their productive age, Statistics Indonesia estimated.

Authenticity is the norm

In the pandemic years of 2020 and 2021, millennials and Gen Z were the two generations that shopped the most on ecommerce platforms, the Indonesian Ecommerce Consumer Behavior report showed.

According to a McKinsey study, Gen Z is characterized by a search for authenticity and uniqueness, both personally and communally. These people are also comfortable experimenting with different ways of self-expression.

Their tech-savvy character also affects their spending behavior. Being digital natives, they can more easily recognize inauthentic branding and appreciate businesses that are more realistic and ethical, the study pointed out.

When it comes to online shopping, fashion is the most searched category, followed by personal care, according to the 2022 Indonesia Gen Z report from the IDN Research Institute.

Both millennials and Gen Z mostly use online payments for transportation services, followed by phone credits, electricity, travel tickets, cinema tickets, and internet access.

Cash on delivery is the top payment method for Gen Z. Other preferred choices include e-wallets, bank transfers, as well as buy now, pay later services.

BNPL attracts Indonesia’s Gen Z more than credit cards since some people are too young for the latter. Moreover, this option is increasingly common as it’s integrated into online platforms like ecommerce and food delivery apps.

This raises questions of whether traditional credit cards will still appeal to Indonesia’s future generations.

‘Treat yourself’ mentality?

Gen Z isn’t a wasteful or overly consumptive generation, Indonesia ICT Institute executive director Heru Sutadi says. This is mainly because many of them are still students or not yet working.

They typically take into account “their families’ economic conditions” before making a purchase, Sutadi tells Tech in Asia. He notes that only 15% of Indonesian Gen Z can take advantage of their parents’ income to shop.

TikTok understood the assignment