Unilever’s Indonesian Boycott Woes – Consumers Are Buying into Narratives

By The Malketeer

Lessons in Consumer Sentiment, Pricing, and Local Rivalry 

In the sprawling archipelago of Indonesia, where a youthful population of 280 million fuels a vibrant consumer economy, global brands like Unilever are finding themselves in uncharted waters.

Once a trusted household name, Unilever now faces a steep decline in market share as economic shifts, local competition, and geopolitical boycotts converge to create the perfect storm.

When Sentiment Shapes Sales

Consumer sentiment is a powerful force, and Unilever is learning this the hard way.

With 87% of Indonesia’s population identifying as Muslim, pro-Palestine boycotts have intensified, accusing brands like Unilever of complicity in Israel’s military actions through continued operations there.

Apps like “No Thanks” have turned activism into actionable choices, allowing consumers to align their wallets with their values.

The impact?

A sharp 18.2% decline in quarterly underlying sales.

This is a stark reminder that brands operating in sensitive geopolitical climates must be prepared to navigate public perception with care, authenticity, and foresight.

The Price of Pricing Strategies

Beyond the boycotts, Unilever’s challenges are amplified by a shrinking middle class and fierce competition from cheaper local rivals.

Local brands like Wings Group’s SoKlin and Nuvo offer products that are 7–20% more affordable than Unilever’s Rinso and Lifebuoy, a gap that matters deeply in a price-sensitive market.

During the pandemic, Unilever raised prices sharply to counter rising costs, but this strategy alienated a significant portion of its consumer base.

The lesson here is clear: pricing strategies must adapt not just to global trends but also to local economic realities.

Local Players, Global Playbooks 

Indonesia’s evolving market dynamics have created fertile ground for local brands and new entrants.

Paragon’s halal beauty brand Wardah, ice cream maker Aice, and China’s Skintific are capitalising on Unilever’s missteps.

These brands resonate with the local market by offering culturally relevant products at competitive prices and leveraging e-commerce platforms for aggressive promotions.

Unilever, by contrast, is playing catch-up with efforts to modernise its online distribution and enhance inventory management.

However, the rise of local brands underscores the importance of deep cultural insights and agile market strategies in sustaining relevance.

The Future of Consumer Loyalty 

Unilever’s predicament raises important questions for marketers and brands worldwide: how do you rebuild trust and loyalty in a fractured landscape?

The answer lies in authenticity and adaptability.

Consumers in Indonesia are not just buying products; they are buying into narratives—stories of affordability, cultural alignment, and ethical responsibility.

For Unilever, this means rethinking not just its product mix but also its messaging.

Instead of relying solely on legacy brands, the company must invest in localising its approach, emphasising shared values, and fostering genuine connections with its audience.

Unilever’s struggles in Indonesia are a cautionary tale for multinational brands navigating complex markets.

The convergence of shifting consumer sentiment, economic pressures, and local competition demands not just a response but a reinvention.

In today’s landscape, success isn’t guaranteed by scale alone; it requires empathy, innovation, and a willingness to adapt to the unique challenges of each market.

For marketers, Unilever’s experience is a masterclass in the importance of staying attuned to the voices of the people they aim to serve.