Origin Indonesia, Digital Advertising, Southeast Asia, 2019
Left to right: Felix Luo, SEA director at MagicWe Technologies; Sherly Luo, vice president at OPPO Advertising Indonesia; and Alan Hellawell, partner at Alpha JWC Ventures, speak at Origin Indonesia 2019 on digital advertising. (Image credit: TechNode)

Research and Markets report states that the Southeast Asia digital advertising market is expected to grow by 13.93% and reach $15.35 billion by 2026. This flourishing region, home to approximately 650 million people represents the fastest growing regional market in the world. The growth in the number of internet users has resulted in a significant increase in digital ads spending as companies are pumping in more resources in a bid to reach more consumers.

At the ORIGIN Indonesia, held in collaboration with Wild Digital Indonesia on November 26, 2019, Alan Hellawell, Partner of the Indonesia-focused VC firm Alpha JWC Ventures, and moderator for the panel, shared how the world’s largest B2B e-commerce marketplace Alibaba is also one of the world’s digital advertising powerhouses which are forecasted to generate $30.5 billion in digital advertising revenue in 2019.

Where is the digital ad money spent?

Marrying e-commerce and digital advertising result in the act of driving awareness and to-do action toward purchasing a product/service electronically. As consumers in Southeast Asia and China are moving towards being mobile-first, marketers have to devise effective audience-targeting strategies to attract visitors and facilitate purchases online.

“The majority of the advertising dollars are going to areas such as FMCG, retail, online platform and travel,” said Sherly Luo, the Vice-President of OPPO Advertising Indonesia, a subsidiary of OPPO Indonesia.  According to an analysis by emarketer, total Indonesia media ads spend in 2019 is expected to be around $3 billion, digital ads occupied 20.4%, its growth ratio is 18% in 2019. “Based on the statistics and our experiences in working with local SMEs, we are seeing more digital ad dollars spent by the B2C marketers,” she added.

Luo also shared that 75% of OPPO internet users are aged between 18 – 35 years old which shows that the young tech-savvy users are ready to spend on new interesting products and services. “I believe more SMEs will go digital in 2020 to capture this lucrative market,” she added.

Varying media landscape between China and Indonesia

The Chinese social media landscape is different from Indonesia and Southeast Asia market, said Felix Luo, SEA Director of e-commerce and media company MagicWe Technologies. “There’s no Facebook and Instagram in China,” he added. The global social media giants such as Facebook, Instagram, and Whatsapp (both owned by Facebook) are banned in China under the country’s internet censorship policy. According to a briefing by TechNode in Sept 2018, Facebook is still waiting for its China business license to operate in China.

“The Chinese love story-telling branding,” said Luo, noting that the Chinese consumers are drawn to products with appealing narratives as China is going through a consumption upgrade and they are looking for something unique which sets a brand apart from competitors. “We are still seeing many outdoor billboard advertising in Indonesia, but you won’t find this in China,” he added.

“China has delivered so many new business models to the internet world over the past decade and one of them is KOL (key opinion leader),” said Hellawell. Austin Li also dubbed the “Lipstick Brother” has millions of followings on various Chinese social media sites reportedly sold 15,000 lipsticks within 15 minutes, cited by Luo as an example of how KOLs influence consumers’ purchase decision.

Here in Indonesia, the KOLs make lifestyle and beauty videos on Instagram, YouTube, and other popular video apps, said Luo, adding that Indonesian consumers refer to such videos for product recommendations and reviews.