The COVID–19 pandemic has affected various aspects of people’s lives. Not only in terms of health, but also socially and economically. Not a few countries eventually fell into recession due to the cessation of a few activities in important sectors driving the country’s economy, including Indonesia.
The Statistics Indonesia (BPS) noted that Indonesia’s economic growth in the first quarter of 2020 was only 2.97 percent. In the second quarter (Q2) of 2020, BPS noted that Indonesia’s economic growth contracted by 5.32 percent year on year (yoy). This figure worsened from Q1 2020 which reached 2.97 percent and Q2 2019 which reached 5.05 percent.
In Q2/2020, BPS noted that most sectors were still experiencing negative growth. Some that are still positive include the information and communication sector, financial services, agriculture, real estate, education services, health services, and water supply. If the COVID–19 pandemic conditions continue in the third quarter, it is predicted that the Indonesian economy will enter a very tough scenario.
This pandemic condition has also forced a few consumers in Southeast Asia, including Indonesia, to adapt to a new lifestyle known as The New Normal.
Therefore, it is very important for industry players to understand the changes in people’s consumption behavior that have occurred due to the COVID–19 pandemic, so that they can anticipate steps to support positive growth and develop appropriate innovations.
This change is inseparable from the conditions in which people generally shop through offline stores such as: repair shops, dealers, tire shops, car or motorcycle accessories stores, and others. But since the pandemic hit, it has forced consumers to stay at home; and to fulfill their daily needs, they buy it through the online store: online marketplace, official product brand website, and social media.
One sector that is under considerable pressure is automotive. Since the COVID-19 pandemic emerged in Indonesia, demand for automotive products has plummeted as people’s purchasing power weakens. This has not a little forced automotive manufacturer in various parts of the world to close their production facilities. It took a long time for the auto industry to recover. In Indonesia, automotive manufacturers have announced the cessation of production following the implementation of Large-Scale Social Restrictions (PSBB) to prevent the minimize the spread of the COVID-19.
BPS stated that car production in the second quarter of 2020 reached 41,520 units or decreased by 87.34 percent (q-to-q) and decreased by 85.02 percent (y-on-y).
Meanwhile, wholesale car sales (sales to dealer level) in the second quarter of 2020 reached 24,042 units or decreased by 89.85 percent (q-to-q) and decreased by 89.44 percent (y-on-y).
Wholesale motorcycle sales in the second quarter of 2020 reached 313,625 units or decreased by 80.06 percent (q-to-q) and decreased by 79.70 percent (y-on-y). Meanwhile, based on the results of the latest research conducted by PT. Visi Globalindo Data Utama (Visi), we confirm that oil and lubricants are still the top priority products in automotive business.
In addition, products related to vehicle cleanliness, engine maintenance and vehicle functioning are also a priority to be purchased during the New Normal period for various levels of Social Economic Status (SES). Spare parts, batteries, tires, and fluids for vehicles are the second priority. Meanwhile, for the upper middle SES level, there is a new trend that is taking place during the New Normal period, namely the increase in the purchase of bicycle products.
On the other hand, most respondents did not buy automotive products that were classified as Occasionally Purchased Products (OPP), such as cars, motorbikes, and entertainment products for their vehicles from the beginning of the pandemic to the new normal.
Changes in consumer behavior during the New Normal period were influenced by at least three main factors, namely, affordable prices, product quality, and product brands. This applies to all levels of SES.