When you start hearing the rhythmic thumps of the bedug waking people up for sahoor, when you notice festivals and religious-themed local markets coming to life, and last but not least—when the advertisements for thirst-quenching syrup drinks start springing up all over various media platforms—you know: Ramadan is coming!
Welcome to Ramadan–one of the most festive months for Indonesians!
Ramadan is one of the most important months for Indonesians. Given that the vast majority of Indonesians are Muslims, a large portion of the population celebrates Ramadan. However, this holy month is much awaited not only by the general population. Indonesia’s many business owners also look forward to this season due to the business opportunities it brings.
Ramadan has a positive impact on the Indonesian economy. FMCG industry sales typically increase by about 30% during Ramadan. One of the main drivers for this is the tradition of giving “zakat” (Islamic alms) and “fitrah” (donations at the end of Ramadan), which result in people buying more FMCG products for charity. M&C Saatchi Group’s 2021 study also found that Indonesians spent an average of Rp2 million just for charitable activities.
Another tradition that causes the economy to pick up pace during Ramadan is food shopping, such as buying meals and snacks for breaking fast (iftar). The emergence of many bazaars held close to the time for breaking fast make it even easier for people to increase their spending on food during this period.
Besides, many social events are also held during this time. People usually gather around the ngabuburit time (the time before iftar) and break fast together. This activity has been a Ramadan tradition for many Muslims in Indonesia, with 28% of Indonesians saying they would break their fast together and 24% saying they plan to visit a Ramadan bazaar.
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Business opportunities you can leverage during Ramadan
Given the population’s enthusiasm during Ramadan, business owners should seize the opportunity to:
- Increase sales
People’s tendency to consume more during Ramadan can benefit your business in increasing sales/revenue. - Get new customers
Ramadan-related promotions and offerings can be a platform for your business to reach out to new customers, who otherwise would not know about your products or services. - Start a new business (or a new business unit)
There are seasonal business opportunities that you can try, both to start a brand new business, as well as to branch out into a new area to grow your business this Ramadan.
In this article, we will walk through how you can harness the full potential of Ramadan to attract more customers and boost your sales during this lucrative period.
Maximizing Your Business Potential: Leveraging Consumer Behavior During Ramadan
Before deciding what action to take, it would be better to first understand the consumer behavior in this particular month, which will influence your business decisions. Next, you should consider how to leverage these behaviors for your business.
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More digital users
With an internet penetration rate of 77% and 220 million digital media users, it’s clear that Indonesians consistently access information and entertainment through digital means. Media use is shifting from mainstream media (TV and radio) to digital apps (Instagram, TikTok, YouTube, etc.), significantly impacting consumers’ purchasing decisions.
More than 90% of consumers discover new brands/products through advertisements on social media. They also research online to decide what products or services to buy.
The customer journey from discovering to buying a product is not linear since customers tend to explore and evaluate potential purchases through trends or reviews on social media. This adds up to a large amount of input and creates additional complexity in the decision-making process.
What it means for your business: Digitize your business! Consider engaging in digital activities such as digital advertising, endorsements, creating video content, or live streaming through social media.
Not convinced? TikTok recorded a 66% increase in video content published during Ramadan 2022, and they found that 67% of app users also tend to spend more during Ramadan.
Consider improving your mobile storytelling skills. Create engaging content that entertains customers before promoting your products to them. For inspiration, consider that TikTok users, for example, are interested in seeing content belonging to these categories during Ramadan:
- Food and beverages (86%)
- Consumer Packaged Goods (CPG) (66%)
- Travel (44%),
- Finance (43%)
- Technology (30%)
- Automotive (23%)
2. Primetime changes
During Ramadan, it is common practice in Indonesia to reduce instructional hours in educational institutions, as well as working hours in both public and private sector organizations. Usually, working hours are shortened by one hour, and there may be additional days off for some schools. There are even schools that only focus on religious activities during Ramadan.
Other than changes to working hours, you should also pay attention to three important time slots that affect consumers’ habits and behaviors during the Ramadan period:
- Sahoor (around 3-5 am) – the morning meal eaten by Muslims before sunrise during Ramadan
- Ngabuburit (around 4-5 pm) – the time before breaking fast, when communities often have gatherings
- Iftar (around 6-7 pm) – the time when Muslims break their fast
These three activities affect media consumption trends, such as watching TV, browsing social media, watching movies in streaming platform, and more. Sahoor and iftar see higher online media consumption, as people are likely to browse their devices before and during their meals.
During sahoor time, for example, conventional media such as TV and radio usually provide special live programs to accompany their meals. Most people also rely on live TV programs and social media platforms like Twitter to find out the timing for Imsak–the time when those who are fasting must stop eating and drinking.
On the other hand, there’s a lower online media consumption trend during Ngabuburit, possibly due to its more social nature.
Online media consumption climbs again approaching iftar time, as people look for entertainment and a countdown to iftar time in the same way that they relied on live programs to inform them of the Imsak time during sahoor.
In the evening, media consumption decrease to the lowest level after iftar, when many people go to the Mosque to practice Tarawih, a special prayer that is only performed during Ramadan.
What it means for your business: Try to leverage these primetime slots by providing promos and interesting content that potential customers can enjoy during these Ramadan activities.
Some things you can explore include:
- Flash sales on your business website
- Live shopping streaming
- Upload interesting and relevant content
- Send emails or WhatsApp notifications informing customers of your promotions
3. Shopping behavior after Lebaran Allowance (THR)
More than 70% of Indonesians receive an allowance for Eid al-Fitr (known as Idul Fitri or Lebaran in Indonesia) called Tunjangan Hari Raya (THR). Indonesian workers usually obtain THR a few weeks before Lebaran arrives–usually equivalent to one month’s salary or more.
THR helps employees prepare for Eid al-Fitr celebrations, such as traveling back home (mudik), buying clothes, and giving angpaos–envelopes containing money–to children and family members. THR is also a form of appreciation for employees’ hard work and is a way to maintain employee motivation.
In 2022, shopping occupied the top spot when it came to how THR recipients planned to spend their funds, with a whopping 70% allocating funds to shopping. Other plans they had in mind include savings, donations (zakat fitrah), and investments, with percentages of 57%, 32%, and 31% respectively.
81% of respondents who allocate their allowance to shopping used it to buy new clothing, in line with the tradition of wearing new clothes for Eid. Meanwhile, kitchen and household needs, which include things like oil, sugar, and flour, ranked second, in line with the tradition of cooking and baking to welcome Eid.
What it means for your business: You should seize this opportunity for you to expand your market. Here are three things you can do:
- Offer Ramadan-themed products
You can offer products or services that are relevant to Ramadan, such as selling matching family outfits with special Ramadan designs, offering catering packages for sahoor and breaking fast, or even selling traditional food associated with Eid (ketupat, opor, rendang, etc.), and selling decorations and gift hampers with a Ramadan theme. - Collaborate with other businesses
If your business does not provide products related to Ramadan, or if you are not familiar with how you can enter the market during Ramadan, you can consider collaborating with other businesses.By collaborating, you can increase your company’s brand visibility. You and your partner can promote each other’s products or services and broaden each other’s market reach.Don’t be afraid to collaborate with businesses that don’t have direct connections with yours at first glance, like a clothing business collaborating with food & beverage brands, an animation company collaborating with another business producing gift hampers, and so on. These unexpected collaborations can be quite refreshing and can help bring attention to your brand. - Use ads to effectively target your ideal customers
Armed with the knowledge of Indonesians’ shopping behavior during Ramadan, their primetime schedule for media consumption, and the products they tend to buy, you can now reach out to your potential customers in a more targeted manner.
Ads are a good way to do that because digital advertising allows you to define specific criteria and parameters that enable you to reach your ideal audiences in a targeted way.However, to ensure effectiveness, you should first identify your target audiences’ preferred media, so that you can find the right advertising media to reach them. To minimize risks and increase profits, you should also determine an appropriate advertising budget and stick to it.
4. Homecoming (Mudik) Tradition
Mudik–an Indonesian term for migrants returning to their hometown during or before major holidays–is a prominent Ramadan tradition. It’s a kind of homecoming where these migrants travel back home to meet their families and relatives.
The media and travel sectors are most affected by this activity. This is because, to prepare for mudik, people consume more content related to transportation and accommodation. For example, they watch more social media content on these topics, look for tips related to travel on the internet, and download travel apps.
In fact, keywords related to mudik, such as ‘cheap plane tickets’ and ‘cheap cars’, grew 2.2x during Ramadan. Also, in the fourth week of Ramadan 2021, travel apps experienced a revenue increase of 203% compared to their usual numbers.
What it means for your business: You can reach more customers by addressing your audiences’ needs this season. Here are some ideas:
- Mudik-related content
Business owners can create mudik-related content such as blog posts, social media, and videos. Content can include travel tips, food recommendations, and other useful information for people traveling during mudik, positioning their brand as a useful resource for travelers. - Travel-related services
Business owners can offer travel-related services such as transportation, accommodation, and travel insurance. For example, you can offer special holiday car servicing packages during and after Ramadan, or offer special insurance policies that cover mudik accommodation. - Temporary domestic helper services (known as infal in Indonesia)
Many families in Indonesia hire domestic helpers (commonly known as Asisten Rumah Tangga or ART for short). These domestic helpers are often migrant workers who have moved into cities to find work. During the mudik period, many of these domestic helpers travel home to be with their families. As a result, many of their employers’ families are left without domestic helpers and have to find ways to cope.Your business can leverage this situation and offer much-needed temporary domestic helper services, usually known as infal. This is especially useful around ten days before and after Lebaran. - Eid-related services
During the homecoming period, many people send gifts and food to their relatives and friends, so there is usually a spike in delivery orders. Business owners can offer delivery services to meet this demand, such as delivering Eid hampers or food for sahoor and iftar meals.With domestic helpers being away and many families struggling to cope without help, businesses can also provide catering services for special Eid dishes, so customers don’t have to cook in preparation for the Eid celebrations.
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Capture more sales with the help of a seamless payment experience
Knowing how to leverage Ramadan trends, and even doing a good job marketing to your ideal customers, is not enough. You need to ensure you get the most important step right–helping your customers pay you!
Even the best business ideas can be futile if your customers don’t take that final step of making their payments. So, you must make it easy, convenient, and pleasant for your customers to pay.
Offer convenient payment methods that your customers trust and prefer
There are many payment options available in Indonesia, and each of your customers has their own preferred payment method. When your customers decide to buy from you, it will be much easier for them to go through with their purchases if their preferred payment method is available. So, you should try to provide as many payment methods as possible to cater to most, if not all, of your customers.
Doing so doesn’t have to be difficult–you don’t have to connect to each bank and payment method separately or wait for months.
You can simply integrate with a payment gateway, such as Xendit, which can help your business provide 38+ payment methods with just one easy integration. These payment methods, which you can activate in a few clicks, include Virtual Accounts, QRIS, E-Wallets, Direct Debit, Credit Cards, Over-the-Counter Payments, and more!
Automate scheduled payments for fuss-free subscriptions
A subscription business model, where customers pay a certain amount regularly, is great for securing recurring revenue. Creating a subscription-based offering is a good way to get consistent sales from the customers you acquired through your Ramadan promotions.
You can make it easy for customers to pay every month by automatically deducting the funds from their accounts, including credit cards, e-wallets, and direct debit. This way, customers don’t have to remember to pay or to set aside time to perform the transactions–easy peasy!
In fact, now’s a good time to try out our subscription payment feature, as we’re waiving subscription fees from now till 30 April 2023! This promo is for limited users only, so sign up to Xendit now or contact our customer success team for more information!
Read more: What is Payment Gateway?
Seize the opportunity for your business this Ramadan
Now is the perfect time to capitalize on the consumer trends and behaviors during Ramadan and elevate your business to new heights. By implementing the ideas we discussed earlier, your business can leverage these trends to attract more customers, increase sales, and ultimately, achieve greater success during this period.
Furthermore, with careful planning and execution, your business can not only benefit from the increased spending habits during Ramadan, but also build long-term relationships with your customers and create a loyal customer base.
So, don’t let this opportunity pass you by. Use these insights to your advantage and take your business to new heights during Ramadan and beyond!
