As Indonesia navigates economic deflation, millennials and Generation Z are increasingly engaging in a behavior known as “doom spending”.
Doom spending refers to consumers’ tendency to make impulsive purchases of non-essential items to cope with economic anxiety. For many young Indonesians, this behavior serves as an escape, providing a temporary relief from the stress and uncertainty of financial difficulties. Most of the time, items that they bought are not essential and after the purchase many people feel regret.
Factors That Make People Doom Spending
Social media significantly contributes to doom spending. Platforms like Instagram and TikTok showcase influencers flaunting luxury items and experiences, creating pressure for young consumers to keep up with these lifestyles (Pew Research Center, 2022). This constant exposure can lead to impulsive buying decisions, as millennials and Gen Z seek comfort and joy in material possessions, even when facing economic challenges. The fear of missing out (FOMO) that they feel from the information from social media, make them do irrational purchases.
The economic instability right now (deflation) makes them feel stressed. Their psychological condition also contributes to the habit because most of the time their mental well being is fragile. With the advancement of technology, it is easy for people to spend their money with ecommerce, buy now pay later (BNPL) and credit cards. This easy payment method also supports the instant culture to seek fast gratification. This phenomenon is also supported by a big gap between the financial literation and application in real life that contribute to the spending habit.
Economic Context and Consumer Behavior
Despite deflation’s financial constraints, millennials and Gen Z are still drawn to experiences and products that offer immediate gratification. This paradox highlights a psychological response to stress, where spending becomes a coping mechanism for feelings of insecurity and anxiety (Nielsen, 2023).
This trend among millennials and Generation Z in Indonesia during economic deflation underscores a complex interplay of psychological, social, and economic factors. While this behavior provides temporary relief from financial stress, it ultimately poses risks to both individual financial health and broader economic stability.
As young consumers navigate a landscape marked by social media influence and easy access to credit, the need for more sustainable spending habits becomes increasingly critical. Addressing the root causes of doom spending—such as economic insecurity and mental health challenges—can help foster healthier consumer behaviors, ultimately benefiting both individuals and the economy as a whole.
Moving forward, financial literacy initiatives and mental health support will be essential in equipping young Indonesians to make informed choices, ensuring that their spending aligns with their long-term financial well-being. Brands that understand this dynamic can tailor their marketing strategies to connect with young consumers, offering products and experiences that provide comfort and joy during uncertain times.
References
Snapcart. (2023). Understanding the spending habits of millennials and Gen Z in Indonesia.
Pew Research Center. (2022). The impact of social media on consumer behavior among young people.
Nielsen. (2023). Consumption trends in Southeast Asia during economic downturns.
