JAKARTA (Reuters) - Jakartans love new things, and the rapidly growing middle classes of Indonesia’s capital always fight to be first — whether watching the latest Hollywood blockbuster, owning the newest gadget, or being seen in a trendy bar.
But even the most avid trendspotters have been surprised by the craze for Magnum ice cream that has swept the city since the February opening in central Jakarta of the Magnum Cafe, months after the brand was relaunched in Indonesia by parent company and consumer goods giant Unilever (ULVR.L) (UNc.AS).
The success of the cafe, which features the iconic chocolate-coated ice cream on a stick, is a tribute to the rising power of the middle-class, empowered by robust demand and growing investment in the far-flung archipelago.
The queues snake longer each day as ice cream lovers come in droves, waiting for several hours at peak times. “It’s the Belgian chocolate that makes it different to other ice creams,” said Githa, a teacher in Jakarta.
“The chocolate is amazing.” The cafe offers different ways of enjoying Magnums, from dipping into sauces to Magnum appetizers, main courses, desserts and mocktails. The menu, created by an Italian chef, includes Waffle de Aristocrat, Goblet of Chocolate, Crown Jewel and Truffle Royale. “Since its opening day, the café has received great enthusiasm from ice cream lovers in Jakarta,” said Meila Putri Handayani, a senior brand manager at Unilever Indonesia. “During peak time, it takes approximately 2.5 to 3 hours.” Handayani declined to give the exact number of Magnums sold but said the cafe sells hundreds each day, with numbers ramping up at the weekend.
Magnum is not your average ice cream. With a slick advertising campaign aimed at adult ice cream lovers, endorsements for the “luxury” ice cream have come from television stars such as Eva Longoria of Desperate Housewives and Hollywood’s Benicio del Toro. Last year, fashion guru Karl Lagerfeld was recruited to help launch Magnum products in the United States. At the Magnum Cafe in Jakarta, a Magnum will cost each punter 12,000 rupiah each, in a nation where the average person lives on less than $6 per day, according to World Bank data from 2009. Magnum’s popularity is seen by some economists as further proof that Indonesia’s surging economy, the largest in Southeast Asia, is benefiting many, with growth of over 6 percent predicted this year. “The World Bank is always going to make a big point about the income gap, which is always going to be present,” said Wellian Wiranto, an economist with HSBC in Singapore.
“Consumption for a long time has been the story for Indonesia, and this is just one way it has been manifesting — both in terms of the lines ... and the purchasing power,” he added, referring to the domestic demand for consumer goods that helps keep the economy armoured against global shocks. Ensuring that the economy of 17,000-island Indonesia does not overheat is still a concern for many investors. Helping allay these fears, in February the central bank surprised markets by raising its policy rate by 25 basis points to 6.75 percent from a record low of 6.5 percent. But questions remain about whether this has been successful. “Bank Indonesia has been very reluctantly hawkish — although the stance it has about currency position, may indeed help cut the price of imported ice-cream,” added Wiranto, referring to the bank’s policy of allowing the rupiah to appreciate and cut the cost of imported goods. “It takes more than just Magnum to cool down the economy.”
Editing by Elaine Lies