Online Sales of Premium Products Surging Around The World

Markets and Finances | 04-16-2019

Indonesia Consumer Willing to Pay More for Personal Electronic Premium Product

 

Jakarta, April 16, 2019 – Online is becoming a popular shopping destination for consumers around the world looking to purchase premium products. Exclusive product ranges and compelling deals are generating sales from local and overseas e-retailers, according to a new report by global measurement company, Nielsen.

Nielsen’s Changing Consumer Prosperity study, which reveals consumers’ purchasing behaviour and spends toward premium product categories, found that increasingly consumers across the globe are going online to local e-retailers for premium products (45% in 2018, up 6ppts vs 2016), and almost one quarter of consumers are buying premium products from overseas e-retailers (24%, up 5ppts vs 2016). Physical stores continue to generate sales from three in five consumers (60%) locally. Meanwhile, 15% of consumers say they travel overseas to buy premium products, with the most typical reasons being personal experience and in-store attention. 

Consumers in India, Turkey and Indonesia (72%, 66% and 58% respectively) are the most likely to shop online locally for premium products, while consumers in Hong Kong (38%), Croatia (36%) and Serbia (36%) markets are the most inclined to travel overseas to shop for premium goods. See Chart 1, Chart 2 and Chart 3. 

The key attributes that consumers around the world say they are seeking in premium products are Superior Quality (56%), Performance (51%), Design (43%), Experience (42%) and Brand (42%). Notably, around two in five consumers (41%) are willing to pay more for Organic and All Natural Ingredients. Similarly, consumers are willing to pay more for Sustainable (38%) and Socially Responsible (30%) products. 

According to the Nielsen report, the top product categories where consumers are most willing to buy premium items include Personal Electronics (42%), Apparel (40%), Cosmetics (31%) and proteins such as Dairy and Meat (30% and 29% respectively). 

Consumers rated peer recommendations as the most influential factor in their trial of new premium products. Close to half of consumers (46%) said Recommendations and Encouragement by friends and family influenced their decision to try out new premium products, followed by Product Research (36%), Online Advertising (32%), Television Advertising (31%) and In-Store Advertising (25%). 

The study also shows that Indonesian online consumers are willing to pay more for premium products in the Personal Electronics category (computers, cellphones, tablets, reading devices, etc.) as much as 63 percent, Apparel product categories such as Clothes/Shoes (41%), Cars (37% ), Jewelry (34%) and Cosmetics (32%). See Chart 4.

It was also found that half (50%) Indonesian consumers are still considering recommendations from their colleagues or family as the most influential factor in their trial of new premium products. While each of the 45 percent of consumers claimed that Online Advertising and Research were other factors that influenced their decision to try out new premium products. See Chart 5

"The habit of conducting research - which is mostly done by browsing the internet - before buying a product, is done more by Indonesian consumers compared with other markets in Asia Pacific. Similar goes with the influence of online advertising. It shows that the impact of online channels to the shopping behavior of Indonesian  consumers is increasing.” said Rusdy Sumantri, Consumer Insight Director, Nielsen Indonesia. “Premium product producers must be smart in utilizing online channels to attract their consumers.”

 

Chart 1. Online Premium Product Purchasing, Local Online Retailers (Top 10 Markets)

Source: Nielsen Global Premiumization Study 2018

Chart 2. Online Premium Product Purchasing, Overseas Online Retailers (Top 10 Markets)

Source: Nielsen Global Premiumization Study 2018

Chart 3. Consumers Travelling Overseas to Shop In-Store for Premium Products (Top 10 Markets)

Source: Nielsen Global Premiumization Study 2018

Chart 4.  Premium Consumer Spending - Top Five Categories

Source: Nielsen Global Premiumization Study 2018

Chart 5.  Premium Product Info

Source: Nielsen Global Premiumization Study 2018

Clients interested in Nielsen Global Premiumization Study should contact their local Nielsen representative.

Non-clients interested in Nielsen Global Premiumization Study can send email to [email protected]

Get the Nielsen Newswire Newsletter

By clicking on Subscribe, I agree to the Privacy Policy and Terms of Use.