Consumers in the capital city of the world’s fourth most populous nation of Indonesia spent more than IDR125Bn (US$9.5M) on paint during the two months period of November to December 2014, according to the retail sales data analysed by GfK.
GfK commenced tracking of paint products in Jakarta at the end of last year, covering independent channels, such as DIY Stores (or home improvement stores) and paint specialists.
Comprising emulsion, wood and metal paints, the survey outcome indicated that emulsion is the dominant segment contributing to 88% of the total paint market spending. The remaining wood and metal paint make up the remaining nine and three percent respectively.
"The biggest and most lucrative emulsion category naturally attracts the greatest competition—both local and international,” said Guntur Sanjoyo, Managing Director for GfK in Indonesia. "In Jakarta alone, we track the existence of 24 brands with in excess of 80 different types of offerings vying for the consumer dollar.”
GfK reports registered more than two-thirds (68%) of total emulsion paint sales coming from foreign brands—indicating that consumers in the country still prefer internationally recognised manufacturers.
Another interesting highlight is the fact that nearly half, or 21 of the 45 emulsion paint variants cost more than IDR 25.000/lit—classifying them under the premium segment. This segment accounted for the biggest value share of 63%.
"The premium segment of paint market is where brands tend to promote the various unique value-added attributes that differentiate their products from the competition,” said Sanjoyo. "Features such as non-toxic, low odour, easy wash and clean, colour protection, etc are positioned as advantages that command a higher pricing.”
Meanwhile, the medium range (IDR15.000 – 25.000/lit) was occupied by 17 models, while the rest fell under the low segment (<IDR15.000/lit). They each made up 32% and 6% respectively of the total paint market worth in Jakarta.
"Similar to categories, such as electronic gadgets and cars, paint is a high-involvement purchase where consumers normally will research and gather relevant information from various touch points to help them evaluate the product before making the actual purchase,” said Sanjoyo. "However, at the end of the day, the eventual touch point, which has the greatest influence is the retailer, since they have the power to give the extra push or even get the consumers to switch brands right before the final sales are being made,” he concluded.
GfK’s retail audit of paints in Indonesia currently covers Jakarta and will be expanding to track more cities in the country.
