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Hello reader,
I struggled to understand macroeconomics in school as a teenager, but I now have a better grasp of it as an adult.
Whenever macroeconomics is a topic for news reports, it usually means my money won’t stretch as far as it used to. We’ve all probably felt the sting of inflation the last couple of years, and it’s certainly forced me to count my pennies a bit more carefully.
The same is true in Indonesia, where a recent survey found that young people are becoming increasingly frugal with their hard-earned money.
That’s potentially bad news for direct-to-consumer (D2C) startups, whose biggest customer base is typically millennials and Gen Z. Read on for the full story.
Today we look at:
- How D2C startups can survive in the purse-tightening era
- The soaring profits of Indian fintech unicorn Perfios
- Other newsy highlights such as ByteDance’s bid to keep TikTok off the chopping block in the US and ecommerce aggregator Rainforest’s latest funding
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A penny for your thoughts
Image credit: Timmy Loen
D2C startups in Indonesia that target millennials and Gen Z could be in trouble, as both groups are adopting more frugal lifestyles. According to a recent report from IDN Research Institute, 49% of millennials and 56% of Gen Z have become more cost-conscious.
- Perfect storm: A lot of the survey respondents said they became more thrifty to achieve financial stability, which has become more difficult as prices go up. To make matters worse, the average monthly salaries of young workers have decreased in recent years.
- Sea change: Amid these economic realities, Indonesian startups are shifting gears. Cash-burning is out and belt-tightening is in: Major tech players such as GoTo, Blibli, and Bukalapak are all spending less on marketing, for instance.
- Future-focused: For D2C firms, discounts and subsidies are effective strategies to attract millennial and Gen Z shoppers, but these are unlikely to be sustainable. Instead, strong brand identities and cross-brand collaborations could be more useful in the long run, industry insiders say.
Read more: Indonesia’s youth turn frugal – are D2C startups at risk?
News spotlight
Perfios’ profit push
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