Report: 76% of Indonesians to cut back on non-essentials this Ramadan

Nearly 80% of Indonesians (76%) plan to cut back on non-essential spending this Ramadan, reflecting a growing trend towards financial prudence, according to a recent whitepaper by creative agency Moonfolks.

This is the sixth edition of Moonfolks' Ramadan whitepaper series, titled "The Ramadan Reset: Why Indonesians are Rethinking Festive Consumerism." Against a backdrop of economic uncertainty and a shrinking middle class, the whitepaper examines how Indonesian consumers are adapting their spending habits.

With rising costs and economic challenges, consumers are becoming more selective, prioritising essential purchases over discretionary indulgences. With 64% of middle-class families reported cutting back on non-essentials in 2024, this report underscores how this shift is influencing festive traditions, reshaping brand strategies, and reinforcing the importance of value-driven consumer engagement.

Don't miss: How marketers can balance faith and consumerism during Ramadan

Ramadan has long been a time of joy, generosity, and shared experiences, but in 2025, financial constraints are pushing consumers towards a more frugal approach. The report highlights key shifts, including a preference for local brands, a reconsideration of discounts and promotions, and a renewed focus on communal values.

One of the most significant trends identified is the rise of "Ramadan LocaInomics," where consumers increasingly support local products. Driven in part by geopolitical concerns, including ongoing conflicts in the Middle East, this shift reflects a growing sense of national pride and a move towards self-reliance.

According to the report, this shift goes beyond mere cost-cutting. It's also about embracing identity and supporting local businesses. For instance, 55% of respondents have opted for Wardah as a homegrown alternative to international skincare brands.

The report also explores the concept of "promo fatigue," where traditional discounts are losing their appeal as consumers seek deeper, more meaningful value. Instead of chasing price cuts, they are prioritising quality, practicality, and transparent pricing.

Despite financial hardships, the spirit of giving and togetherness remains strong. The report underscores how the Indonesian principle of "gotong royong" - a deep-rooted sense of communal solidarity - continues to shape consumer behaviour. Even with limited resources, Indonesians find innovative ways to celebrate, reinforcing the country's standing as the world's most generous nation.

This Ramadan, 42% of respondents plan to allocate funds to zakat and sadaqah, reinforcing a growing commitment to charity. This follows last year's 30% surge in online zakat transactions. Notably, 67% of middle-class families are willing to reduce Ramadan expenses to contribute more to charitable causes.

For brands looking to stay relevant, the whitepaper offers strategic insights. It advises a shift from volume-driven promotions to value-based offerings, focusing on affordability and authenticity. Digital innovations, particularly through Buy Now, Pay Later platforms and Muslim fintech apps, are becoming essential tools for engaging consumers. Emotional storytelling and purpose-driven campaigns that align with Ramadan's spiritual essence are also highlighted as effective ways to foster deeper connections with audiences.

Anish Daryani, founder, president director, and CEO of Moonfolks, emphasised the resilience of Indonesian consumers, stating, "In yet another Ramadan shrouded by economic stress, declining earnings and increasing costs, the ingenuity and creativity of consumers to overcome these challenges leaves us with a feeling of awe."

"We have used these insights, and more, in developing all our Ramadan campaigns this year. We believe having years to the ground gives our brands an edge in staying ahead of the market challenges, ensuring we continue to deliver audacious commerce for them, even in times that are less favourable," he added.

Elki Hendria, chief strategy and digital officer at Moonfolks and co-author of the whitepaper, echoed this sentiment, noting that Indonesians refuse to let economic struggles dampen their celebrations.

"There's clearly nothing coming in the way of Indonesians making the most of their Ramadan," he said. "We saw this during Covid-19, and we're seeing this again during an economic squeeze. Brands need to fuel this spirit to win hearts of consumers, and a share of their wallet."

Related articles:
Dettol redefines cleanliness in Ramadan campaign
Ramadan ads in Malaysia muted due to geo-political tensions. How are ad agencies coping?
How to deal with online critics: A lesson from Frank on Wheels' Ramadan Bazaar episode