Sachet Culture in Indonesia

- Fictor Ferdinand -

Office| Jl. Batik Uwit No.1, Kelurahan Sukaluyu, Kota Bandung |Phone | 08112237900 |Email |ypbb@ypbb.or.id|
Facebook | YPBB Bandung |Twitter | @ypbbbdg|Instagram | ypbbbandung |
COMPANY PERCENTAGE
Some Backgrounds
● MNCs expansion to Asia
● Saturated Middle-Up Market, expansion to Middle-Low Class
● 1997/98 Economic Crises in Asia and decreasing purchasing power
● Previously: shampoo and detergent. Now: various product
○ 95% shampoo in India
○ 70% detergent in Indonesia
○ 68-70% shampoo in Philippine
Sachet Target Segments (Dubey & Patel, 2004)
Target Segment Large/ Medium Package Sachet Size
Geographic Coverage Urban dan Semi -Urban Urban, Semi-Urban, Rural
Market
Income Group High, Middle Class Higher, Middle, Low Class
User Frequency Medium to High Medium, High,
Occasionally
Retail Store Requirements Large/Medium size -- Even Small Shop/ Kiosk
reasonable storage space (Warung)
Critical Factors for “Sachet-Success” (Singh et. al,
2009)
1. Retail structure
2. Consumer’s Perceived Value (i.e economic-class marker) & Affordability
3. Other Socio-Cultural Factors (i.e old habits)

Lower economic class is a prerequisite to sachet culture

Indonesia’s Retail Structure

(Dyck et al, 2012 in Poggenpohl, 2018)

Price Structure (PnG case)
Pantene (Procter and Gamble) Price Index
(2018)
 Product Brand Producer Price Index Sachet/ Bottle Market Share
Rinso Anti Noda
(powder) Unilever 1.00
Rinso Anti Noda (liquid) Unilever 0.88
Rinso + molto pink 33%
(powder) Unilever 0.88
Rinso + molto pink
(liquid) Unilever 0.96
DETERGENT
Attack (Jaz 1) 1.11
Easy Attack 1.15 10-11%
Easy Attack + softener 0.88
Daia Lemon Wings 1.00
So Klin Cair Wings 1.00 52%
So Klin Wings 1.18
 Product Brand Producer Price Index
So Klin Softergent Wings 1.18
Daia Softener Wings 1.13
Downy Mystique (Hitam) PnG 1.15
Downy Passion (Merah) PnG 1.25
Fabric Softener/
Conditioner Molto Pelembut & Pewangi
Pakaian Ref All In 1 Pink Unilever 1.47
Molto Hygyne (Hijau) Unilever 1.43
Molto Ultra Biru Unilever 1.52
Molto Pelembut All In 1 Unilever 1.47
Trends:
1. Indonesia is (on its way to) Sachet - Culturized ?
2. Escalation of Waste

(Sachet is most likely to escape from waste management operation; has no economic
value (high cost to collect and recycle) → Residue)
Why Consumer Loves Sachet?
● Affordable (in price per unit)
● Measured Usage
● Easy to bring while traveling
● Trialability
● More hygienic (compared to refilled product)
Why Producer Loves Sachet ?
● Market Expansion (to lower income class & challenging geographies)
● Competitor (Grimes-Casey et al, 2006)
● Policy Environment (no EPR effective yet)
Why Retailer Loves Sachet?
● Consumer loves it!
○ In case of refill: no need to bring empty bottles
● Higher Product Turnover
● Less space needed
○ No need to store empty bottles + wait for the distributor to come and exchange it
Some Ideas (so far) for Refill/ ADS
● Work with small retailer (warung/ kiosk)
● Product Competitor (v.s. brand attachments)
● New consumer-experience (50%)

Future:

● Work with producer to try ADS

● Push for policy (EPR)