Just a few years ago, a major bank predicted that Indonesians would, on average, earn US$3,000 per capita by 2020. At the beginning of 2011, Indonesia hit that mark, beating the prediction by nearly a decade. While other countries in the region and around the globe have been affected by significant economic uncertainty, Indonesia’s economy is running at full bore, with a rapidly expanding middle class that is now the third-largest in the world. At 48 percent of the population and accounting for 44 percent of all FMCG spending in the country, middle class consumers are shaping today’s retail scene. Recently, during its 35^th Annual Marketing and Media Presentation in Jakarta, Nielsen provided nearly 1,000 clients and stakeholders with a snapshot of what Indonesia’s middle class is doing in terms of media usage and shopping patterns, and how companies can reach them effectively.

While all income groups have benefited from Indonesia’s accelerated growth, the middle class has enjoyed the most rapid advances in terms of spending increases and quality of life improvement, and increased demand in a range of consumer categories from home electronics and appliances to health and beauty products. The Indonesian middle class prefers to combine the convenience and fresh offerings found through traditional retail channels such as wet markets with the price-savings and expansive product offerings of the modern trade.

What are middle class Indonesians buying?
Some key facts about middle class shopping trends that retailers and manufacturers need to consider include:

• Fresh food makes up 37 percent of their monthly spending. Ice cream, noodles, and biscuits are the biggest movers thanks to product innovations.
• Value for money is key for nearly all (97%) middle class shoppers.
• 88 percent of middle class consumers said they want to experiment with brands.
• More than half (53%) shop in a modern trade outlet twice a month.
• They tend to visit the minimarket closest to their home, but promotions can disrupt their regular routine: 90 percent are looking for stores “with attractive and interesting promotions.” They also desire a diverse assortment of goods, friendly service and a comfortable environment.
• Mini-markets see the highest levels of spending, followed by supermarkets, with traditional retailers still highly important for fresh foods and the location convenience they offer.

What are middle class Indonesians watching?
Indonesians of all income levels love to watch TV, and nearly all (95%) middle class homes own a TV, with 96 percent watching programs every day. Other traditional media such as radio and newspapers are also popular, but are increasingly being consumed online, a trend driven primarily by Indonesian youth.  Internet usage and mobile phone ownership are surging, each increasing every quarter. Mobile penetration is already high, and purchase intent for smartphones is strong. These devices are fast becoming the primary platform for a variety of activities, such as watching video, accessing the Internet and connecting to social networks, opening a space for marketers and content providers to focus their efforts to include mobile in their content distribution. Nevertheless, relevancy and convenience to the consumers remain key to mobile content distribution.

Key media usage trends for middle class Indonesians include:

• Middle class Indonesian households watch an average of 4.5 hours of TV a day. Sports programming is the most popular, followed by drama series and other entertainment genres.
• Local content is appealing to middle class, which is why each city has its own newspaper.
• Almost a quarter (22%) of middle class consumers have Internet access, and spend 1.5 hours a day accessing the internet.
• Nearly three-quarters of middle class consumers in major cities (71%) have a mobile phone, with almost half saying they use the devices to access the Internet. More than one-third (35%) have a smartphone.
• Indonesians love social networking: 94 percent are connected to social networks, and 89 percent have a Facebook account.

Reaching the middle class
Given the abundance of opportunities in the marketplace, how can retailers, manufacturers, marketers and media companies connect with the middle class consumer? In a number of consumer goods categories, innovation has proven to be a growth engine. For example, in the ice cream category, the number of new varieties has surged by nearly 32 percent, with single packs the driver of sales. Volume sales of snack noodles surged 92 percent in the past year, thanks in large part to new flavors and a repositioning of the category (what used to be seen as a basic meal now is a great, convenient snack). The instant coffee market has expanded, and middle class consumers contributed 71 percent of volume growth within that category.  In contrast, categories that presented few innovations saw slower growth.

In addition to innovation, other trends seen among Indonesia’s middle class consumers include:

• Kids playing a role in modern shopping: 95 percent said that they “hardly ever refuse” the invitation from their kids to go to the minimarket.
• Convenience is key: today’s middle class consumers are pressed for time, with the demands of work and family life. Products that make life a bit easier are clear winners.
• Appeal to the fact that they are smart shoppers: Indonesians know how much items cost and where they are located in the store. Retailers must create a welcoming environment, promote value for money and win customers’ loyalty.
• Connect with consumers: they are increasingly online, and they discuss brands and products in that space. Retailers must strive to engage with them on social networks.
• Be relevant: tailor marketing – especially online and mobile campaigns – to consumers and their need-states.

Combined with Apple’s other best-selling handsets, the iPhone 4 and iPhone 3GS, Apple phones accounted for nearly two-thirds of all mentions about smartphones between July through December 2011. A handful of Android phones such as the Samsung Galaxy Nexus, Droid Bionic, and HTC Evo series phones attracted substantial buzz leading up to the holiday shopping season, accounting for nearly a quarter of buzz.

BlackBerry models took in 10 percent of the buzz, led by the BlackBerry Bold series which was the third-most mentioned handset with over 6 percent of online buzz about these top smartphones.

Methodology: Using a list of the top 20 recently acquired smartphone handsets during the 3rd quarter, as well as a handful of recently released handsets such the Samsung Galaxy Nexus and Apple’s iPhone 4S, Nielsen looked at online buzz mentioning these smartphones from July – December 2011 posted in blogs, message boards/groups, public posts on Twitter and Facebook, and online news sites.

According to The Nielsen Company’s monthly surveys of U.S. mobile consumers from July-September 2010, consumers planning on getting a new smartphone had a very clear preference: A third (33%) wanted an Apple iPhone. Slightly more than a quarter (26%) said they desired a device with the Google Android operating system (OS). And 13 percent said they wanted a RIM Blackberry.

But consumer preferences can be fickle. Those same surveys for January 2011 – March 2011 show just how much things have changed: According to the latest figures, 31 percent of consumers who plan to get a new smartphone indicated Android was now their preferred OS. Apple’s iOS has slipped slightly in popularity to 30 percent and RIM Blackberry is down to 11 percent. Almost 20 percent of consumers are unsure of what to choose next.

Those dynamics are already translating into sales. Half of those surveyed in March 2011 who indicated they had purchased a smartphone in the past six months said they had chosen an Android device. A quarter of recent acquirers said they bought an iPhone and 15 percent said they had picked a Blackberry phone.

Which brings us to the installed base of smartphone consumers: As of March 2011, 37 percent of mobile consumers who owned a smartphone had a device with an Android OS. Apple’s iOS, claimed by 27 percent of consumers, is now outpacing Blackberry, which has 22 percent of the market.

There are more than 50 million Hispanics living in the United States, making them the single largest ethnic group, according to the U.S. Census Bureau. If U.S. Hispanics were a country, they would rank as the 12th largest global economy, somewhere between Mexico and Australia, commanding more than $1 trillion in purchasing power. The fact that U.S. Hispanics represent more than half (56%) of net population growth from 2000 to 2010 and are projected to contribute 100 percent of the population growth between the ages of 18-49, is game changing.

By 2050, Hispanics are projected to account for more than 30 percent of the U.S. population – a significant growth driver that marketers can no longer overlook. But the questions for many remain:

• How do I reach and successfully engage Hispanics?
• Will general market campaigns capture enough of the Hispanic demographic?
• Is online relevant?
• Should I consider mobile in my market mix?

To answer these questions, Nielsen breaks down the prevailing myths surrounding Hispanic interaction with today’s media.

Myth #1: Bilingual Hispanics don’t watch Spanish television

There is a belief that once Hispanics learn to speak English well and become bilingual, they become “acculturated” and use English as their primary language. However, acculturation is a process rather than an absolute classification whereby Hispanics adopt American customs while still guarding their culture, heritage and traditions. While 77 percent of U.S. Hispanics speak English well, according to current American Community Survey estimates, 61 percent of Hispanics aged 18+ tell Nielsen they prefer to speak Spanish in their homes versus only 17 percent who say they speak only English. Spanish language remains a core component of the Hispanic home long after English proficiency is gained. Language spoken at home rather than English ability tends to be a better indicator of TV viewing behavior.

While there is general consensus that Spanish-language-dominant homes (speak mostly or only Spanish) predominately watch Spanish-language TV, there is debate about viewing patterns in multi-language homes (where English and Spanish are spoken equally). The viewing breakdown during the 2009-2010 TV season for persons 18-49 is as follows:

• Spanish-language-dominant homes viewed 78 percent of TV in Spanish.
• Multi-language homes viewed about 50 percent Spanish-language TV.
• English-language-dominant homes (speak mostly or only English) spent only three percent of time viewing Spanish-language TV.

Digging deeper into a multi-language home reveals that English- and Spanish-dominant members primarily watch TV in their preferred language, but as expected, the time spent viewing in English and Spanish language eases towards the middle. English-dominant Hispanics in multi-language homes spend 80 percent of viewing on average in English and 20 percent in Spanish versus English-dominant-homes where the split is about 97 percent English and three percent Spanish.

The same movement toward the middle is seen with Spanish-dominant members in a multi-language home where 65 percent of viewing is in Spanish versus 77 percent for a Spanish-dominant home. Despite the variability across the different Hispanic language groups, in 2010, the top ten broadcast shows for the Hispanic demographic were all Spanish-language programs. The fact that the majority of Hispanics aged 18+ prefer to speak Spanish at home underscores the growing need for advertisers to better connect with Hispanics in the native language.

Myth #2: I can reach Hispanics through my general market campaigns; Spanish-Language advertising is an expendable part of my budget

In 2010,Nielsen reports that only 75 percent of the top 200 advertisers spent money on Spanish-language cable or broadcast, and those that did only spent about eight percent of the total advertising budget on Spanish-language TV.

For English-language television, Hispanic viewing time is dispersed over a large number of networks, while Spanish-language viewing is more concentrated. A brand advertised across all English-language national broadcast networks in primetime would only reach about 40 percent of all Hispanics aged 18-49, while a Spanish-language broadcast would reach 53 percent. However, when looking into Hispanics 18-49 who are Spanish-language dominant, the gap widens substantially. An English-language broadcast campaign in primetime only reaches 19 percent of Spanish-language dominant Hispanics versus a Spanish-language campaign that reaches 85 percent of Spanish-language dominant Hispanics over a month. That’s a difference of 5.6 million Spanish-language-dominant Hispanics 18-49 or roughly 60 percent of the demographic. A primetime English-language-focused broadcast campaign effectively leaves out Spanish-dominant Hispanics.

Besides providing access to a unique audience, Spanish-language advertising is generally more effective than English-language advertising for Hispanics. Nielsen’s advertising effectiveness studies show that advertisers who translate English ads into Spanish receive an increase in general recall among Hispanics when compared to general market English-language commercials. However, original Spanish ads (ads that do not have an English counterpart or that are based on existing ads by modifying the narrative and soundtrack) see a 15 percent general recall lift from English-dominant Hispanics and a 69 percent general recall increase from Spanish-dominant Hispanics. Two reasons for this effect are that Spanish ads create a deeper personal connection to Hispanic consumers and Hispanics are less likely to time shift Spanish-language programming.

While only 30 percent of Hispanic homes have DVRs compared with 38 percent for the general market, the format in Spanish-language television programming (i.e., daily novellas) make it less likely to be time shifted than English-language TV. As an example, during 2010, English-dominant Hispanics were twice as likely to time shift programs in English as in Spanish while Spanish-dominant Hispanics were three times more likely to do so.

Myth #3: Hispanics are late adopters of technology, so using online and mobile campaigns is unnecessary

According to Nielsen 2010 universe estimates, approximately 30 million Hispanics (62%) have access to the Internet at home. Include the number of Hispanics who have online access via work, school or in other public places and Internet penetration rises to about 88 percent. And mobile Internet access closes this gap even further, since Hispanics are more likely to have a video and Internet enabled cell phone than the general market (44% vs. 35%). While Hispanics spend 20 percent less time online than non-Hispanics, they stream twice as much video online, accounting for almost 30 percent of their online activity.

New studies are finding that Hispanics are equally, if not more involved in emerging technologies than the general market. A recent look at Nielsen’s national people meter panel reveals that Hispanics are just as likely as non-Hispanics to own an HDTV (69% vs.66%). And Nielsen’s 2010 Q4 mobile insights survey of more than 50,000 people and more than 8,000 Hispanics reveals that Hispanics are not only more likely to own a smartphone, but also they are part of the most valuable mobile consumer segments, carrying an average monthly bill that is 14 percent higher than the market average. Hispanics also lead all ethnic groups with an average of 40 percent more calls made per day and are the most likely ethnic group to use text messaging, mobile Internet and e-mail. They are also more likely to download pictures or music on mobile devices.

The Hispanic consumer represents the greatest potential for sustained growth in the U.S. today. At the current rate of expansion, Hispanics will drive population growth and, in turn, consumption in America for the next generation. Reaching Hispanics effectively should be at the top of every marketer’s to-do list. Hispanics actively embrace new technologies and platforms, while keeping close ties to their roots, especially language. And while Hispanics do consume English-language media, Spanish-language media holds the key to connecting with the greatest number of Hispanic consumers most effectively.

Download related Nielsen information about Hispanic and media.

First launched in Japan in 2001, the speed of Third Generation (”3G”) networks have changed the way consumers use mobile phones, extending them beyond calls and simple text messages to mobile video viewing, Internet browsing and other data-intensive functions not previously available on older, slower networks.  3G rolled out across Vietnam in 2009, and The Nielsen Company used the anniversary of its launch as a check point to survey consumers’ attitudes and assess market awareness of the technology as well as examine the challenges facing mobile service providers in attracting customers to their networks.

Six months after 3G launched, just under half (48%) of Vietnamese mobile users were aware of it, and only 3 percent subscribed.  The latter number has risen to 11 percent one year on, a result on par with other markets.

Given the strong overall penetration of mobile phones in Vietnam, however, one might have expected a faster rate of adoption.  It’s not that consumers don’t know what 3G can be used for: the vast majority of those surveyed knew that 3G phones were capable of mobile TV viewing, video calling and browsing the Internet.  But a glance at what consumers are currently using their mobile phones for now might provide some insight as to why functions like those are not yet more popular.

The user of the mobile Internet in Vietnam still falls into the category of “early adopter,” and to get beyond this initial group, service providers can focus on several key areas to expand usage of their networks:

• Promote smartphones
• Price data packages creatively
• Cultivate the youth market

The Rise of Smartphones
Until 3G was widely available, there was little use for devices such as the BlackBerry or iPhone.  The faster network enables the devices to show off their many functions.  In the U.S., the smartphone has steadily taken off, with just 18% market penetration in early 2009 to 25% one year later.  In fact, Nielsen forecasts that smartphones will become the most popular device in the U.S. in 2011.  The iPhone, BlackBerry and, increasingly, Android-based devices continue to surge in popularity as mobile providers offer free or low-priced handsets and attractive data plans.  In conjunction with the rise of smartphones has come increased demand for their many features including e-mail, video and the all-popular “apps.”  By contrast, smartphones currently make up a tiny proportion of the overall mobile market in Vietnam.

Marketers in the U.S. and Europe have realized that the devices’ form and function drive data adoption and consumption more than other factors.  In other words, if the consumer has a device that features applications such as mobile video viewing or Internet browsing, he is likely to use them out.

The brand of handset to offer customers is up to the mobile service provider.  Offering branded BlackBerry or iPhone devices are safe options, but the Android makes generic or operator-branded phones worth investigating.

The experiences of two neighboring countries can also offer lessons for Vietnam’s mobile providers.  In Singapore, the two leading providers reported sharp increases in data traffic in 2009 and 2010, coinciding with promotions to boost adoption of the devices.  All of the largest provider’s promotions in Q1 2010 were for smartphones, while 80% of the devices stocked for online customers of two other providers were smartphones.  In Indonesia, two top mobile providers reported strong data use growth, coming at a time when BlackBerrys have gained a huge following among youth and students and the introduction of generic Chinese-made handsets featuring Android have brought the price of the devices below $200.

Innovate Pricing
The cost of data plans has been an issue in the U.S., where a leading carrier has sought to limit data use, while other plans have offered so-called all you can eat (AYCE) plans.  In a developing country like Vietnam, cost will also play a factor in 3G adoption.  “Data snacking,” or allowing consumers to access 3G data services for distinct periods of time for a set price, has been successful in a number of other countries where pre-paid services dominate, including in the U.K. and Malaysia.   Free trials also allow consumers to test drive 3G functionality with little or no risk.

Again, the lessons learned in Singapore and Indonesia offer some insight as to how Vietnam’s mobile providers can attract more 3G subscribers.  In the city-state, even smartphones such as the iPhone are offered free with data plans, making the cost of entry a non-issue.  In Indonesia, monthly data rates as low as $11 make 3G service affordable to more people.

Marketing a 3G lifestyle:  Cultivating the Young Generation

The real key to boosting 3G service in Vietnam is nurturing the young generation, who typically adopt new technology more quickly than their elders.  In Vietnam, people under age 24 represent more than half (54%) of the population.  Narrowing the scope of our investigation to people age 15-24 (who comprise 20% of the Vietnamese population), half (48%) are subscribed to mobile services. Initially given phones by their parents as a way to keep in touch, youth gain more control over usage and handset selection as they mature. They occasionally use their devices to make calls, but prefer to use them for texts/SMS. They are much higher than average data users, which would seem to make 3G networks and smartphones natural fits for them.  But to date, the majority of young Vietnamese know very little about 3G and/or don’t see a need for it. By the time they are young adults, they have very definite preferences when it comes to how they use service and selecting devices.

Seizing the Opportunity
By taking a few relatively simple actions, mobile service providers and handset manufacturers can attract a greater number of young consumers to 3G:

• Get them: start by focusing on parents, who will buy kids their first mobile phones and develop and promote parent/child calling plans. Incentivize current customers to recruit friends to sign-up for service.
• Educate them: Advertise on channels popular with youth such as VTV3, HTV (HCM) and subscription channels including Disney, HBO, Star Movies, and on local websites Like Hi Hi He He, ZingMe, etc. Offer discount coupons with 3g information.
• Keep them: Younger mobile users will change handsets often – sometimes as much as once a year.  Make sure they are buying your brand by staying atop of trends and pricing devices at the right point.  If smartphones are too expensive for most, try marketing media phones which feature many of the same kinds of functions.  Service providers should promote network quality.  It’s not a key concern for teens, but young adults tend to stick with those networks they view as having good coverage and quality.  Offer services of interest such as English tutorials via video (sure to appeal to parents!), Disney programming or the latest Korean soap operas – but make sure revenue comes from advertising, not subscribers.
• Sell to them: The young use multimedia but budget is a concern; try using advertising-driven models, such as sponsored text messages for service discounts.  Be creative in pricing data plans; apart from standard monthly top-ups, try daily or weekly pricing plans.  Or offer one time credits when they run out of minutes

Whether it is attracting more adults or the young generation, mobile telephone service providers have a number of tools at their disposal to accelerate adoption of 3G in Vietnam.   Adults can clearly benefit from the features enabled by 3G, but converting the young generation to 3G will pay dividends in the long run.  Once they have access to and become familiar with services such as mobile video viewing and Internet access, real-time instant messaging, they are more likely to adopt service upgrades and enhancements in the future.

Well, that depends on the country. According to a series of surveys conducted in eight countries by The Nielsen Company, U.S. youth ages 20-24 are the most likely to say someone else is footing the bill, with only 45 percent saying they pay for their own service, compared to 88 percent of those in Russia and 84 percent of those in Germany. German teens ages 15-19 also rank high for saying they pay their own mobile charges, tied with those from Brazil. (Before despairing, parents of financially-dependent teens should note that the survey did not ask whether young people paid for these services out of an independent source of income or a parent-provided allowance.)

For more information on young people and their cellphones, download our new white paper on Mobile Youth Around the World.

According to a June 2010 survey, people who use their mobile phone for web-based banking tend to be younger, male and more ethnically diverse than their online banking counterparts.

• 36 percent are between the ages of 25-34, while only 18 percent represent that same age group online
• Males represent 53 percent of this population versus 43 percent online
• 30 percent are Hispanic while this same user group represents only 11 percent of the online banking population

Those who use SMS texting for mobile banking – either from a smart phone or a standard feature phone – represent the largest group of mobile bankers. This is not surprising given the growing popularity of texting in general: As of July 2010, two out of three U.S. mobile subscribers used text messaging.

Mobile banking SMS users vary demographically from mobile web users. This group is slightly older than their mobile web banking counterparts, as 48 percent of these users are over the age of 35. With this simple easy-to-use feature, banks can provide customers the ability to track balances, set up alerts, and have much greater and immediate control of their finances.

According to David Gill, Senior Director of Mobile Marketing at The Nielsen Company, “People who are comfortable using their mobile phones for mobile banking tend to check their mobile bank site twice a week. These customers are already highly engaged and eager for real-time solutions based on their specific needs.”

Mobile banking offers something for every degree of technology adoption and comfort level, from sophisticated, mobile web-based banking services to the quick and simple, SMS texting based offerings that are driving mobile banking growth.

To better understand the growing popularity of mobile apps, The Nielsen Company launched the Mobile Apps Playbook in December 2009. The most recent version is now available. “The State of Mobile Apps,” features select highlights from the report and is based on an August 2010 survey of more than 4,000 mobile subscribers who had reported downloading a mobile app in the previous 30 days.

One of the main challenges facing apps publishers is making sure consumers “discover” their apps. According to Nielsen’s survey, searching application stores on their phones is the preferred way for discovering new apps for users of feature phones and smartphones alike (57% and 40%, respectively). The next most popular “preferred” form of app discovery is through the recommendation of a family member or friend. However, smartphone apps users are more likely than feature phone users to seek out other ways of discovering new mobile apps.

For more facts and insights on mobile app usage, mobile advertising and who’s paying for apps, download Nielsen’s “The State of Mobile Apps.”

The following alternative analysis, comparing category- and site-level data, for example, shows the different insights made possible by alternate approaches and interpretations. We have long taken pride in our leadership in measurement science and our participation in rich debate around methodology to arrive at the best insight possible. We’re looking forward to continuing the conversation to develop new ways to look at measurement both online and in the mobile arena.

For the mobile element of the research, our original share of time analysis used the average time spent at a category-level, the broad groupings of websites that offer similar types of content. This time we went to a more granular level, looking at share of time by basing it on the total time at the individual site-level.

This alternative way of slicing the data still shows Email to be, by far, the dominant sector in terms of mobile time, although this dominance shrinks by a few delta points to 38.5% from 41.6%. Search is another that nets out with a smaller share, although by less than a percentage point from 7.1% to 6.3%.

The share held by Social Networking remains very similar but News & Current Events comes out much stronger using the site-level analysis at a 7.2% share of time compared to 4.4% of time using the category-level analysis.

Share of time on Portals shows something more dramatic, with a change from 11.6% to 4.6% share of time, but this doesn’t mean that people are spending any less time on Portal sites. Nielsen classifies both channels and brands into categories and so a category-level analysis includes both brands (e.g. Google) as well as channels under than brand (e.g. Google News). Using the initial methodology means that all Google time would be assigned to Portals (because Google is a portal) but using the site-level method means the Google News element would be assigned to the News & Current Events sector. Thus, the Portal element is limited to more general and entry pages rather than including content-specific sectors such as news.

The average price of smartphones dropped 2% in the first six months of the year compared to the same period in 2009 and by 5% versus 2008.

“The drop in the average price of smartphones has put them in the hands of more Brazilians, regardless of their income level.  In the small but rapidly growing smartphone universe, 15% are owned by consumers in the two lower income levels,” said Thiago Moreira, Regional Product Manager of The Nielsen Company’s Telecom Practice in Latin America.

One of the great attractions of smartphones is the variety of functions they offer.  Survey respondents said that cameras, FM tuners and MP3 players were the most sought after features.  Sales of phones featuring cameras increased 33% in the first half of the year, while those featuring FM tuners jumped 76%.  Sales of phones featuring MP3 players grew 74%, while those with GPS products went up 52%.

Looking to the future, smartphones featuring digital TV – which currently account for 2% of the category’s sales – will be the goal for many Brazilian consumers.  More than 50% said that they intend to have such a feature on their next mobile handset.

“With the increased interest in that feature from consumers at all income levels, the strategic segmentation of that market becomes key to carriers and manufacturers alike,” said Moreira.  “It is critical that they have a deeper understanding of the criteria and motivations Brazilians have for purchasing the phones they do.”