- Explain product benefits concretely.
77.2% of Income for Consumption: How Brands Reach the Low-Class
7 min read
Intinya Sih
Consumers who spend Rp1-2 million per month allocate 77.2% of their income to consumption, and they are the only spending group that is pessimistic about their current income.
Cost-of-living pressures lead budget-constrained consumers to weigh price, benefits, function, experience, and product size; they do not automatically choose the cheapest option.
Brands need to communicate benefits concretely, tailor packaging and pricing to consumer needs, and understand consumer priorities so that purchases do not depend on discounts alone.
This section summary was AI-assisted and reviewed by our editorial team.
Reaching budget-constrained consumers is not just a matter of offering low prices. They still have to meet a range of needs, so both the benefits of a product and the ability to pay for it factor into their shopping decisions.
The Bank Indonesia Consumer Survey for September 2026 shows that the group with monthly expenditure of Rp1–2 million spends 77.2% of its income on consumption. This is also the only expenditure group that is pessimistic about its current income (Hariyanto, 2026).
These findings give a picture of the budget pressure this group faces, although they cannot directly represent all lower-income consumers. Under such conditions, price does matter, but it is not necessarily the only determinant of choice.
Therefore, a cheaper product is not automatically the one that gets chosen. Consumers also need to consider whether the benefits offered match their needs and are worth the money they have to spend.
Limited Budgets Make Every Choice Count More
Cost-of-living pressures are shaping how Indonesian consumers shop. In its 2025 Voice of the Consumer survey, PwC Indonesia (2025) found that 50% of respondents were concerned about economic instability and rising living costs. This concern has led consumers to plan to cut back on purchases and opt for cheaper alternatives.
For consumers on limited budgets, a single purchase has to be weighed against other needs that remain unmet. Price matters because spending on one product can reduce the room left for other necessities. However, choosing a product is not always as simple as looking for the lowest price.
This is where brands need to understand why consumers choose one product over another. Is it more affordable, are its benefits clearer, does its size fit their needs, or does it feel more efficient to use?
Consumers on limited budgets are not always looking for the cheapest product. They also need to consider the benefits they gain and whether the product is worth buying with the money available to them.
Seeking Value Does Not Always Mean Choosing the Cheapest
A limited budget does not mean consumers disregard the functional quality and experience of a product. Findings from Worldpanel by Numerator (2026b) show that Indonesian consumers prioritize basic necessities and use household products more sparingly, yet remain open to small indulgences. In the personal care category, product function and experience also remain important considerations.
These findings indicate that consumers still weigh product benefits despite budget constraints. Therefore, a low price alone is not necessarily enough to get a product chosen. Consumers also need to see the benefits they will gain and how well the product fits their needs.
For brands, the challenge is to make those benefits easy to recognize. Worldpanel by Numerator (2026b) recommends that brands clarify product benefits, make value more visible, and offer pack sizes and formats that match consumer needs. This helps consumers judge whether a product is worth buying without having to rely on price as the sole consideration.
Ultimately, a product that appeals to budget-constrained consumers is not necessarily the cheapest one. What brands need to show is why a product’s benefits are worth the money consumers must spend, whether through function, experience, or a pack size that suits their needs.
Winning Consumer Spending Takes More Than a Pricing Strategy
Data from Worldpanel by Numerator (2026a) show that in the first quarter of 2026, lower socioeconomic groups drove FMCG growth through larger basket sizes. Meanwhile, higher socioeconomic groups contributed through higher shopping frequency.
This difference shows that the two groups contribute to FMCG growth through different shopping patterns. However, basket size alone does not explain why consumers buy more products. From that pattern alone, we cannot tell whether the decision is driven by price, product benefits, or other considerations.
For brands, the question is how to make a product worth choosing amid the many needs consumers must meet. A competitive price can be an initial draw, but consumers also need to see benefits that fit their needs.
To that end, brands need to understand which product categories consumers prioritize, the benefits they seek, and the product sizes or formats that fit their spending patterns. Without this understanding, discounts may attract consumers to shop occasionally, but they are not necessarily enough to make them choose the same product again.
What Does This Mean for Brands?
These findings suggest several directions brands can consider when building strategies for budget-constrained consumers.
Communicate the product’s main benefits in language that is easy to understand. Consumers need to know what they stand to gain and how the product meets their needs, not just how much it costs.
- Match the offering to needs and budgets.
Pack size, product format, and price level need to be tailored to consumer needs. The right options give consumers the flexibility to choose a product that fits both their needs and their spending capacity.
- Assess product value from the consumer’s perspective.
A competitive price is not necessarily a sufficient reason to choose a product. Brands need to examine whether the benefits they offer are genuinely needed by consumers and whether the product suits the needs they want to fulfill.
These three approaches do not mean that all lower-income consumers have the same needs and preferences. Brands still need to understand the characteristics of their target consumers so that the strategies they develop do not rest solely on assumptions about consumers’ purchasing power.
Winning Spending Starts with Understanding Value
The group with monthly expenditure of Rp1–2 million spends 77.2% of its income on consumption, according to the Bank Indonesia Consumer Survey for September 2026 as cited by Hariyanto (2026). This figure gives a picture of how large a share of income this group devotes to consumption. Under such conditions, brands need to compete not only on price, but also on the reasons that make their products worth choosing.
Budget-constrained consumers still consider the function and benefits of a product. A low price may attract attention, but consumers also need to assess whether the product suits their needs and is worth the money they spend.
Understanding consumers means seeing how price, needs, and benefits are weighed against one another in shopping decisions. With that understanding, brands can design offerings that are more relevant to consumers, rather than simply cutting prices.
References
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