How did the recent Ramadan holy month and Eid holiday affect e-commerce in largely Muslim Indonesia? aCommerce shares insights
Holidays and festivals affect e-commerce around the world, from Christmas and Thanksgiving in the US and the West to Chinese New Year in China and Taiwan. In most cases, they result in higher sales, as people rush to buy gifts and to purchase holiday-related merchandise.
However, things may not be this simple, according to a study done on Indonesia by e-commerce enabler aCommerce. Below, we reproduce, with permission, the results of its study, which shows the buying trends and habits of Indonesian consumers during the Muslim holy month of Ramadan and the accompanying Eid holiday.
Does Ramadan boost e-commerce in Indonesia?
This is the question aCommerce sought to answer this Ramadan 2014. With over 200 million Indonesians concluding the holy month of Ramadan with Eid celebrations on Monday, July 28, aCommerce released a case study that analysed the e-commerce data of five clients during Ramadan in Indonesia. We were interested in the implications of how 88 per cent of the Indonesian population eliminating food and water from their daily life for religious reasons, 66.8 million of whom are online, would affect consumer behaviour in e-commerce. Would consumerism decline during this holy month, or simply shift? Would the type of goods being purchased change? Are people spending more or less?
Our sample set includes five diverse clients in both size and category such as beauty, Muslim wear, general (department store), sports and fashion. Given the range of e-commerce development of these various clients, this case study is intended to provide a snapshot of consumer behaviour and may not be indicative of the whole Indonesian e-commerce market at large.
The data is from the analysis of the period of two weeks prior to Ramadan — June 7-20, and two weeks during Ramadan — June 28-July 11, and following are the data points:
- Peak shopping hours: When were Indonesians shopping online?
- Strongest performing shopping categories: What were they buying?
- Average basket size: How much was being spent?
Below is a summary of our key learnings:
Traffic stayed constant, but shifted earlier
- Overall traffic saw a marginal increase of 3 per cent of visitors shopping during Ramadan, but the most important take away was that there was a major shift as to when they were shopping. This stems from the fact that the day starts and ends earlier. Instead of going to the office at 9 AM, Indonesians start the day at 8 AM and leave around 5 PM (See Figure 1).
- However, for clients with Ramadan targeted or conscious campaigns and products such as Muslim wear and sports, these categories saw spikes in traffic of 29 per cent and 18 per cent respectively.
Indonesians eat, pray, shop shop shop
- There was a 152 per cent increase in traffic at 4 AM in all categories except fashion. Instead of waking up, praying, eating and then returning to bed, Indonesians are increasingly using the time to browse online (See Figure 2).
- There was a 400 per cent increase in traffic at 4 AM and a 7x increase in orders for Muslim wear category. But these gains are not only seen for religious related retail. Sports saw a 189 per cent increase in traffic and 26 per cent uptake in sales at 4 AM.
- Lunch time browsing boosted during Ramadan with 12 per cent more than normal at 11 AM, suggesting Indonesian Muslims are turning to e-commerce and retail consumption instead of going to lunch (See Figure 1).
- 6 PM is the lowest time for e-commerce as people head home, but during Ramadan that drop off was even steeper with a 19 per cent decrease. During Ramadan, Indonesians leave work earlier and gather with friends and family to break the day long fast at 6:30 PM (See Figure 1).
- The majority of shopping still takes place between 11 AM-2 PM, but evening shopping hours were being shifted to early morning (See Figure 1).
Religious-related retail rules
- Muslim wear category saw its sales skyrocket during Ramadan. The night long dinners, socialising with families and people returning home out of the city capital means that the demand for traditional and conservative clothing ran strong. There was a 96 per cent increase in transactions of Muslim wear and 84 per cent increase in revenue after Ramadan started.
- The majority of the sales in sports rose in the shoes category.
Provocative sells, but not during Ramadan
- Contrast this with modern female fashion, which saw a sharp decline in orders per day, suggesting that while Indonesia is a progressive Muslim nation, marketing provocative fashion during Ramadan needs to be done with care. We saw that the CTR for Ramadhan themed fashion (not necessarily including a hijab) but with long sleeves and little skin exposure performed stronger during this month. “Indonesians find it distasteful to see bare legs and bikinis during Ramadan,” said Hadi Wenas, CEO, aCommerce, Indonesia.
A tisket, a tasket, a big sporty basket
- Ramadan is not like Christmas where gift giving is the norm. Nonetheless average basket sizes saw significant increases. People were buying in much bigger quantities. For example, our sports category saw average basket size increase by 67 per cent. The more decadent spending is explained by the fact that prior to the start of Ramadan, working Indonesians have a major influx of disposable income as they receive their bonus for the year.
- The median basket size was around 120,000 IDR or US$10.3.
Four strategic recommendations for Ramadan e-commerce
1. Shift marketing to 3 AM
- Boost SEM, online marketing and promotional offers to between 3 AM-6 AM. Indonesian Muslims are waking up and staying up and they are shopping online as Figure 1 shows. Save money from marketing spend (online or offline) during the traditional prime time of 6 PM-8 PM. Prime time has shifted to mornings as families are eating together and going out in the evening. Do not miss the opportunity to capture the new age Indonesian customer.
2. Remove provocative images from homepage
- That doesn’t mean you have to change your whole product to be religiously targeted or non-secular, but use this month to feature more conservatively dressed models, long sleeves, no cleavage or bare chests, longer skirts etc. Or else risk facing major bounce rates (if you receive traffic at all). As a time for family and religious sacrifice, Indonesians find provocative imagery especially distasteful during Ramadan.
3. Rethink your bestsellers
- For non-Muslim wear categories rethink your bestsellers and home product page to reflect Indonesian values and culture. What sold best last month will not necessarily work during Ramadan. The strength of Muslim wear and sports sales act as a benchmark for success. Consider products and marketing that focus on family, community, their upcoming vacation time, etc.
4. Feature affordable items
- Sites that did not feature lower priced items suffered a hit in conversions. Indonesians are price conscious year round and even if they are playing with a spike in disposable income from their bonus, thriftiness is a major factor in consumption behaviour as we saw with our brands. Be aware of mixing up high priced items on the homepage with bringing the lower priced items to the forefront as well. This is a great time of year to flush out some of that inventory.
E-commerce during Ramadan has the potential to be explosive as seen with the amazing shift in behaviour, as Indonesians woke up and immediately hit the internet for online shopping. Whether those potential shoppers are captured or not depend fully on strategic timing of marketing and a consciousness of traditional values integrated into product choices and campaigns.
The study can be found at aCommerce’s site here. Reproduced with permission.