Economic Crises Shift Consumer Brand Preference from Global to Local and Status to Practicality

Why It Matters

Understanding how economic downturns influence consumer psychology and purchasing behavior is crucial for brands to adapt their strategies. This insight allows for more targeted marketing and product development that resonates with evolving consumer values during challenging economic periods.

Key Finding

During economic downturns, consumers favored local brands and practical purchases over global brands and status symbols, with a shift towards health and community concerns in the recovery phase.

Key Findings

• Preference for global brands declined during the crisis period.
• Local brands experienced rejuvenation through community-oriented messaging.
• In the post-crisis recovery, global brands saw partial recovery, and status-related self-image shifted towards health-consciousness and community support.

Research Evidence

Aim: To investigate the impact of economic instability on consumer brand preferences and the relationship between self-image and purchasing patterns in the Indonesian e-commerce market across pre-crisis, crisis, and post-crisis recovery periods.

Method: Mixed-methods approach combining quantitative analysis of transactional data with qualitative insights from industry experts.

Procedure: Transactional data (total payment volume, average order value, purchase frequency) from an Indonesian e-commerce platform were analyzed using ANOVA and T-tests across three brand categories (global, local, unbranded) and two product subcategories (care, decorated) during pre-crisis (2017-2019), crisis (2020-2022), and post-crisis recovery (2022-2023) periods. Semi-structured interviews with 20 industry experts were conducted and analyzed thematically.

Sample Size: 20 industry experts

Context: Indonesian e-commerce market, beauty product subcategories (care, decorated).

Design Principle

Adapt brand strategy to socio-economic conditions by emphasizing community, practicality, and local relevance.

How to Apply

When designing marketing campaigns or product launch strategies, consider the current economic climate and how it might influence consumer perceptions of brand value, shifting focus from pure status to more grounded benefits.

Limitations

The study is limited to the Indonesian e-commerce market and beauty products, and the qualitative insights are from industry experts, not direct consumers, which may not fully capture consumer motivations.

Student Guide (IB Design Technology)

Simple Explanation: When money is tight, people tend to buy local brands and things they really need, rather than expensive foreign brands or things just to show off. They also start caring more about health and helping their community.

Why This Matters: Understanding how economic situations change what people want to buy helps in designing products and marketing that are more likely to succeed.

Critical Thinking: How might the specific cultural context of Indonesia have influenced these findings, and how might the results differ in a different cultural or economic environment?

IA-Ready Paragraph: Economic instability significantly alters consumer brand preferences, shifting focus from global brands and status-driven self-image towards local alternatives and practical, community-oriented values, as evidenced by shifts in purchasing patterns during crisis and recovery periods.

Project Tips

• Consider how economic factors might influence the success of a new product.
• Research competitor strategies during economic downturns.

How to Use in IA

• Use this research to justify why a particular brand strategy or product feature might be more successful in the current economic climate.

Examiner Tips

• Demonstrate an understanding of how external factors like economic conditions influence design choices and market success.

Independent Variable: ["Economic instability (pre-crisis, crisis, post-crisis)","Brand category (global, local, unbranded)","Self-image (status-related, health-conscious, community-supportive)"]

Dependent Variable: ["Brand preference","Purchasing patterns (total payment volume, average order value, purchase frequency)"]

Controlled Variables: ["E-commerce platform","Product subcategories (care, decorated)","Time periods (specific years)"]

Strengths

• Utilizes big data analytics for a large-scale quantitative analysis.
• Combines quantitative data with qualitative expert insights for a more comprehensive understanding.

Critical Questions

• To what extent are these findings generalizable beyond the Indonesian e-commerce market?
• How do individual consumer demographics interact with these broader economic trends in shaping brand preference?

Extended Essay Application

• Investigate the impact of a specific economic event (e.g., a recession, a trade war) on consumer purchasing behavior for a particular product category.

Source

Economic instability and its effect on brand preferences: big data examination of self-image and online shopping conduct · Business, Management and Economics Engineering · 2026 · 10.3846/bmee.2026.23594