June 30, 2022
Within general trade, the downstream distribution chain includes wholesalers, semi-wholesalers, and retailers, the latter of which is also known as ‘warungs’ in Indonesia.
As Southeast Asia’s largest market, Indonesia’s retail industry is undoubtedly sizeable. The Indonesian retail market is worth an estimated USD 282 billion; of this number, B2C e-commerce businesses selling physical goods account for about 4% or USD 12.2 billion.¹
Within general trade, the downstream distribution chain includes wholesalers, semi-wholesalers, and retailers, the latter of which is also known as ‘warungs’ in Indonesia. Every year, 65% of fast-moving consumer goods (FMCG) sales are dispersed through channels associated with general trade.²
Together, these players total more than 3.5 million and are crucial to serving Indonesia’s rural people every day.³ In fact, 61% of micro-retailers contribute to Indonesia’s overall consumption, particularly in addressing their daily needs.⁴
The Untapped Potential of General Trade as a Marketing Channel
For the everyday Indonesian, it is hard to overstate the importance of retailers within general trade. In total, the daily value of transactions in the general trade channel is roughly IDR 9.5 billion. According to SIRCLO’s report on Iklan Pintar, Warung Pintar’s trade marketing initiative, nine out of ten Indonesians meet their daily necessities through retailers, both online and offline, and 190 million are actively utilising the general trade channel to fulfil their demands daily.
Despite being embedded in Indonesians’ everyday lives, 82% of these retailers have never been part of a retail marketing campaign. This is a clear sign that the level of trade marketing penetration in general trade is very low.
There are a few key reasons for this. Firstly, monitoring and tracking marketing programs, as well as product promotions, is extraordinarily difficult due to the complexity of general trade. While the modern trade ecosystem allows for overlaps between brands and distributors and distributors and the market, the general trade ecosystem often sees a long chain of relatively segregated middlemen who lie between brands and retailers. The multiplicity of these layers makes it difficult to reach and connect the general trade ecosystem.
Furthermore, a cost-effective, end-to-end offline marketing and promotion solution that is well-suited for general trade channels is tough to find. Marketing programs for general trade entail large expenditures and often involve multiple actors.⁵
In general, offline marketing programs for general trade lack pertinent and dependable data. Even though this data is crucial for analyzing ongoing marketing activity, limitations in feedback collection and a lack of engagement make it hard to obtain this information.
As a result, more than 80% of a company’s marketing budget is typically allocated to modern trade, whereas general trade receives only 20%, despite being the largest FMCG channel.
Iklan Pintar: A Win-Win Solution for Brands and Grassroots Communities
With general trade as a key pillar of everyday retail that remains under-utilized in most companies’ marketing strategies, the most natural next step is to dial in on its massive potential.
This is where Iklan Pintar comes in. Released in 2020 by Warung Pintar, Iklan Pintar is an integrated marketing and promotion solution aimed at the general trade market. Iklan Pintar enables brands to market their products to both traditional retailers and grassroots consumers.
Specifically, Iklan Pintar does so by facilitating the integration of brands, traditional retailers, and grassroots consumers into a single ecosystem.
For brands, one of the advantages provided by Iklan Pintar is an improvement in efficiency. By providing a complete ecosystem for reaching out to traditional retailers and grassroots consumers, Iklan Pintar eliminates the exceedingly labor-intensive and complex marketing methods of traditional trade marketing. Taken together, this integration drives efficiency in cost and business processes.
Furthermore, Iklan Pintar is customisable and transparent. The solution fosters a connection between the brand and Warung Pintar throughout the entire marketing process, including planning, implementation, and evaluation, in order to meet the needs and objectives of both parties. At the same time, brands can monitor the overall real-time performance and operations of their marketing programs via an integrated dashboard.
With more tailored marketing methods also come a boost in visibility. With the robust network that traditional retail provides, the word-of-mouth communication between retailers and consumers facilitates the rapid distribution of brand-related information.
Currently, Iklan Pintar reaches over 500,000 retailers across Indonesia under the umbrella of Warung Pintar. On top of offline advertising placed in warungs, Iklan Pintar also offers digital advertising services on social media. Thus far, incentives for retailers who have joined Iklan Pintar’s program have exceeded IDR 300,000, which is 7.5% more than other marketing channels.
Driving Efficiency and Producing Results
The effectiveness of Iklan Pintar can be attested to by the brands that have benefitted from its solutions.
Among the many success stories is AXE Parfum Saku’s campaign,⁶ which saw the brand distributing 20,000 packages of pocket perfumes within three months. Iklan Pintar enabled AXE Parfum Saku to take full advantage of social media advertising and engage with 150 traditional retailers to market their products. In fact, sales increased by 60% compared to the previous month.
Another case study is Sosis Kimbo,⁷ which engaged in a one-month project with Iklan Pintar. Suchlike in AXE Parfum Saku, Iklan Pintar provided a channel for Sosis Kimbo to utilise digital advertisements on social media. Iklan Pintar also helped Sosis Kimbo engage with 200 traditional retailers to market their products. This resulted in 65% of products being sold.
In 2022, total engagement in trade marketing programs rose by 36% compared to the year before. The average involvement of warung owners in such programs also quadrupled compared to before joining Iklan Pintar. Furthermore, incentives for retailers increased to 50% from 2021. In the same vein, retailers’ incentives increased by 61% after joining Iklan Pintar.
With Iklan Pintar’s robust and integrated ecosystem, companies can increase product reach and engagement, maximising results. To learn more, visithttps://warungpintar.co.id or contact us at firstname.lastname@example.org.