retail sector in indonesia

8/6/2019 RETAIL SECTOR IN INDONESIA

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RETAIL INDUSTRY IN INDONESIA

BY

VAISHALI PATILROHAN SHINDE

( MMS 2010 2012 )


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Overview of Retail Business in

Indonesia Retail business in Indonesia - Modern Retail and Traditional Retail

Modern retail first emerged in Indonesia when Sarinah Department

Store was established in 1962 and this system continued to growduring 1970-1980

Early 1990 foreign retailer entrance into Indonesia - first operation

of the largest Japaneses retail chain Sogo

Various types of modern retail ranging from modern market,

supermarket, department store, boutique, factory outlet, specialty

store, trade centre, and mall / super mall / plaza.


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Characteristics of Modern Retail (1/2)

MODERN MARKETSelling Method : By retail, directly to end consumers in asupermarket method (buyers them self get the good from shelves

and pay to cashier)

DEPARTMENT STORE

Selling Method : By retail, usually assisted by sales attendant

SPECIALTY STORE

Selling method : By retail, directly to end consumers in asupermarket method


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Characteristics of Modern Retail (2/2)

MALL/ SUPERMALL / PLAZA

Selling method : By retail, directly to end consumer, service method

is a combination between supermarket method and with assistance

from sale attendance

TRADE CENTER

Selling Method : By retail or wholesale, generally assisted by sale

attendance


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Development of Modern Market

Selling is done in retail and is conducted through a swalayansystem (refers to a format of selling where consumer gets thegoods they need directly from the shelves and pays to thecashier)

In the past 5 years, Modern Markets have been the primemover developing modern retail in Indonesia

During2004 2008, turnover of Modern Market grew as high

as 19.8%

Department Store, Specialty Store, and other forms ofmodern retail grew 5.2%, 8.1%, and 10% per year respectively


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Development of Modern Retail

Turnover, 2004-2008 (IDR Quintillion)


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In 2004, of the total turnover, market share of Modern Market

is 70.5%; and by 2008 the share had increased to 78.7%

The share of Modern Market also increased from 18.3% in2004 to 24.4% in 2008


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Modern Markets in Indonesia

Presently there are three types of Modern Market;

namely Minimarket, Supermarket, and Hypermarket.

Characteristics of Modern Markets in Indonesia

moderate profit level, typically around 7-15% of turnover

relatively strong bargaining position against their suppliers

offer relatively cheap and competitive prices compared to that

of Traditional Markets

have maintained outlet comfort to a level that meets with

demands of society lifestyle


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Development of Modern Market by

Type

During 2004 - 2008,

Minimarkets turnover increased very high,

average 38.1% per year

Hypermarkets turnover also grew significantly at

21.5% per year

Supermarkets turnover grew at only 6.2% per

year


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In 2008,

Hypermarket recorded turnover IDR 23.1 quintillion or 41.7% of total turnover

Modern Market, while Minimarket 32.1% and

Supermarket 26.2%


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Hypermarkets domination over market share ofModern Markets turnover have occurred since 2005

In 2004, the largest market share was held bySupermarkets

Key reason for such decline is that

Supermarket is not as accessible as Minimarkets

whereas in terms of item goods sold, Hypermarket hasmore to offer than Supermarket


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Hypermarkets strong performance is also reinforced

by the increase number of outlets.

From 2004 to 2008, the increase was exceptionally

high at almost 40% per year. Minimarkets outlets

also grew significantly at 16.4% while Supermarkets

only increased 10.9% per year.


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Key Players in Modern Market


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Indomaret is the largest player with turnover reached IDR 7.7

trillion in 2008, which was 43.2% of total turnover of Minimarket in

Indonesia.

Alfamart follows with turnover of IDR 7.3 trillion or around 40.8%

Indomaret is also the network of minimarket with the largest

number of outlets, followed by Alfamart.

In 2008, Indomarets outlet reached 3.116 units that accounted for

30% of number of Minimarket outlets in Indonesia and Alfamarts

outlets were as many as 2.755 units or 26.8%.


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Within group of Supermarket, there are six major

players i.e. Hero, Carrefour, Superindo, Foodmart,

Ramayana, and Yogya + Griya. These six retailnetworks account for 76% supermarket turnover in

Indonesia


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Within Hypermarket group, there are only five retailers; three

of them dominate about 88.5% market share of Hypermarket

turnover in Indonesia. The three players are

Carrefour that holds almost 50% of total turnover of

Hypermarket in Indonesia,

Hypermart (MatahariP

utraP

rima) with 22.1%, and Giant (Hero Group) with 17.8%


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Thank You

retail sector in indonesia

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