From Fasting to Feasting: The Impact of Ramadan on Indonesia’s E-Commerce

From Fasting to Feasting: The Impact of Ramadan on Indonesia’s E-Commerce

From Fasting to Feasting: The Impact of Ramadan on Indonesia’s E-Commerce

March 12, 2024

Source: Shutterstock.

With the fasting period spanning from sunrise to sunset, Ramadan brings a shift in Indonesians’ consumer behaviour.

Being home to the world’s largest Muslim population, Indonesia sees Ramadan as a period marked by spiritual introspection and heightened economic dynamism in Indonesia. Anticipated by many, this holy month transforms into a season of vibrant economic activity and celebration.

During Ramadan, Indonesians experience an uplift in consumer spending, which is largely attributed to the tradition of Tunjangan Hari Raya (THR), or bonus given prior to Eid. This government-mandated bonus, equivalent to an annual salary supplement, is granted to most employees across the country. It is deeply intertwined with Ramadan’s spirit, particularly noted for enabling people to devote a significant amount of time and money to their loved ones, thereby catalysing an increase in spending.¹

Building on the increased consumer spending fueled by the THR bonus, the e-commerce sector flourishes during this festive season. By offering various promotional strategies, such as bundle deals, gift hampers, ‘Buy X Get X’, ‘Buy More Save More’, and voucher codes across various categories, online retailers can attract and engage a broad customer base.²


The THR Effect

According to the 2023 Ramadan Survey by YouGov, nearly three out of five Indonesians intend to allocate a portion of their THR towards shopping and savings.³

This financial windfall has spurred a remarkable spike in average transaction values, as revealed by SIRCLO’s internal data, showcasing a substantial 36.5% surge from Ramadan 2021 to 2023. 

Furthermore, SIRCLO emphasised the number of consumers during Ramadan witnessed an impressive increment of 62.5% across marketplaces in the last three years, highlighting the significant impact of this religious occasion on consumer behaviour.


Increased Mobile Activity, Increased Shopping Hours

With the fasting period spanning from sunrise to sunset, Ramadan brings a shift in Indonesians’ daily routines and mobile usage patterns. 

The pre-dawn meal, also known as suhoor, and the evening meal to break the fast become peak times for online activity, shifting away from the typical lunch and commuting hours.⁴ This shift in mobile engagement leads to a spike in online shopping, particularly during suhoor and after the evening meal.

There had been a 65% increase in shopping transactions at 04:00 compared to normal days, highlighting this time as experiencing the most significant upticks in activity.


Fashion Takes the Lead in Ramadan

In Ramadan 2023, the e-commerce landscape experienced a notable boost of transactions across various categories, with the top five being Fashion; Food and Beverage; Healthcare; Beauty and Personal Care; and Home Living according to SIRCLO’s internal data.

In particular, the Fashion category witnesses a remarkable surge in transaction volumes and a rise in basket sizes by 11.9% – both before and during Ramadan.

In particular, the Fashion category witnesses a remarkable surge in transaction volumes and a rise in basket sizes by 11.9% – both before and during Ramadan.


Mothers as Decision Makers

Amid the soaring sales, mothers have come to play an important figure in decision-making, holding sway over 85% of household expenditures.⁵ This is not only due to their substantial purchasing power, but also to their influential role in guiding the purchasing decisions of others.

A survey conducted by IbuSibuk reveals that approximately 58.1% of mothers actively seek discounts on e-commerce platforms for making purchases in daily necessities, personal care, fashion, and healthcare—a trend that persists generally and becomes even more pronounced throughout Ramadan.

Further highlighting the influence of mothers, the survey also indicates that 38.4% base their purchasing decisions on recommendations from micro-influencers.⁶ This insight is particularly valuable for brands, suggesting that engaging with micro-influencers, especially those who are mothers, can significantly impact mothers’ buying interests.

In this context, IbuSibuk stands out as the ideal platform during Ramadan and beyond. Designed with mothers in mind, IbuSibuk is recognised as Indonesia’s largest momfluencer platform, boasting more than 100,000 members. This positions it as a pivotal channel for brands aiming to connect with this influential demographic.

An exemplary case is Cosmos, an Indonesian household electronics brand, which has leveraged its collaboration with IbuSibuk to effectively reach and engage with this key audience.


Parting Words

All in all, the Ramadan e-commerce boom in Indonesia represents a complex interplay between cultural practices and economic forces.

  • The disbursement of THR bonuses leads to increased consumer spending throughout the holy month, as people are more inclined to allocate additional funds for shopping.

  • Fasting alters shopping preferences, from the timing of purchases to the types of promotions that attract the most attention, necessitating brands to adapt their strategies accordingly.

  • Household expenditures are significantly influenced by mothers. They are easily swayed by word-of-mouth reviews, particularly from acquaintances and micro-influencers, highlighting the importance for brands to engage with this demographic, for instance, through collaborations with micro-momfluencers, such as through IbuSibuk.

  • Moreover, the need for an omnichannel strategy is paramount, allowing brands to not only diversify their sales channels, but also amplify their reach and sales potential, as demonstrated by partnerships with enablers like SIRCLO. 

At the end of the day, the convergence of THR, promotions, and shifting consumer behaviours during Ramadan presents a golden opportunity for brands to harness.

At the end of the day, the convergence of THR, promotions, and shifting consumer behaviours during Ramadan presents a golden opportunity for brands to harness.

By adeptly navigating these trends, businesses can significantly boost engagement and drive profitability, resonating deeply within Indonesia’s vibrant cultural and economic tapestry. This season of heightened activity is not just a moment, but a movement, one that businesses must embrace to grow in the diverse market landscape of Indonesia.