Indonesia Retail Market 2020

UNPREDICT THE PREDICTABLE

Waking up the giant in the middle of cold winter

Yongky Susilo - Board Expert HIPPINDO

 Its market story full of …

MYSTERY SURPRISE
Infrastructure and
Human Capital Development
Next growth factors
Indonesia and ASEAN infrastructure was behind
 Catching Up
2015 2018 2015 2018

Toll Roads 909 1.562 BTS Tower 103 189

(thousand)
Container 21.9 28.8
Capacity Fiber Optic 82 162
(million TEUS) (thousand
kilometer)
Dwelling Time 7.36 3.12
Days
27 New seaports
Air Passenger 158 208 10 New airports
(million)
Jakarta MRT
Electrification 86.2 97.2 Palembang LRT
Ratio (%)
Next is the Human Capital Development

2024
75.54
Consumption
Recovery
Growth Momentum
Weak consumption growth starting Q3 2016
BUT a sign of rebound in Q2 2018

Source BPS
Whats happening during RED periods ?
 2019 : political stability become THE TOP MAJOR CONCERN this
semester
TREND OF RECESSIONARY TOP 5 MAJOR CONCERN
SENTIMENT AMONG CONSUMER

Q1 18 Q4 18 Q1 19

61
57 POLITICAL STABILITY 20% 24% 34%
55 56
53 53
52 51
Copyright © 2019 The Nielsen Company. Confidential and proprietary.

THE ECONOMY 30% 30% 31%

49
48
47 47 45 TOLERANCE TOWARDS DIFFERENT
44 22% 15% 17%
43 RELIGIONS
39
WORK/LIFE BALANCE 15% 17% 16%
Q217 Q317 Q417 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

CRIME 10% 12% 12%

Yes No

Q : Do you think your country is in an economic recession at the moment? Q : What are the top 5 major concern among consumer ?

Source: The Conference Board ® Consumer Confidence Survey, conducted in collaboration with Nielsen
Elections
During election economy growth is impacted

Pre
and
GDP GROWTH
% Post

2015

Election 9 July 2014

Q1 2019 yet is very low

Pre and Post

FMCG national growth had doubled in first semester 2019

2018 H1 2019 2021

National 1% 2% 9%

H1 2019 2021
Modern Trade 2018
4.5% 9% 15%
Minimarket lead growth, on the way to high double
digit

2018 H1 2019 2021

Minimarket 8% 15% 23%
Has been high growth for cosmetic

Q419
30

Q1 2020
Digital lifestyle and marketing change behavior and … look

Selebgrams
 Walking thru 2019

Gaji 13

17 april 5 may- 5 juni 28 Juni 1 July 17 Agustus

Semester One Semester Two

Jan Dec
Retail Growth

GT 5%
MT 13% = Exp 9% - Infl 4%
Bottom Low Good Higher Peak
The rise of mid layer
middle class
Premiumization
Indonesia is 3rd Largest in APAC
In 2020, Java will have more mac than thailand; sumatra
exceed malaysia+singapore
Uplifting class means format and product upgrade

2010 2018

56.5% 65%
Mid Middleclass
Food Beverage and Apparel consumption still on TOP
 Adventures
Luxury Brands
Quality & Experience International Brand Retailing
Indoor/Outdoor Shopping Streets
Culinary F&B Diversity
Lifestyle, Fashion & Accessories
Entertainment
Quantity & Sports
Price Licensed Brand Fashion
Consumer Durables
Store with Resto
Malls
Local Department Stores
Hypermarket/Minimarket /Fastfood
Street market & Supermarket
Create Next Premium
260 million Indonesian are to Live Better

MegaTrends:

Convenience
Healthy
Feeling/
Looking Good
The upcoming
retail digitalization
Fast and Personalized
Technology kills what Consumer Hates

Searching products
Cashier queue
Take home big purchases
Relevant offering
 Fast eat slow
Today Economy Tomorrow Economy

Big eat

Big eat small Fast eat slow Smart eat dumb Ecosystem vs solo
Fast eat slow

• Fashion : Zara Search : Online

• Snickers : Nike Pay : Gopay
• Loan : P2P Big eat Movie : Netflix
• Share : Uber, Dress Medicine : Halodoc
• Ads : Instagram Network : Linkedin
Nike : 18 months vs 4 months
 Zara : produces around 450 million items a year

Store managers communicate customer feedback on what shoppers like, what they dislike, and what they’re looking for.
That demand forecasting data is instantly funneled back to Zara’s designers, who begin sketching on the spot.
Unsold items account for less than 10 percent of its stock, compared with an industry average of 17 to 20 percent.
NEW not only NOW
• Buying as they browse
• 25 pair shoes a year
• Blogs, celebrity, fashion
news

• Middle class Want to BUY

NEW
• Fashion is NOT NEW
enough

• Ultra Convenient habit

that sticks; than loyalty
The Rise of Small players

Fast trend
New basic needs
 Mall/ Shop Digitalization

IDR

Super Platform for the New Retail Ecosystem

Parking lot booking Mall Directory Pre Order and Book Personal Offering E Payment
 Shopper Acquisition

Digital Physical Print Calls Radio and TV

From people’s From their presence Tourist scan QR From people making From people
Social media in community popular From paper Ads telephony calls watching TV
Retail & Mall web visit, spots, other malls TV ads enquiry tour, activity etc Listen to radio
Apps Board ads etc

Retail Ecosystem Super Platform

 The Era of Personalized Retail
Somebody Acquisition Profiling Me Personalized

Behavior Offerings
Her mobile ID
+ Preferences Rewards
Social Media
Demand Report

Purchase VIP Treats

Power
Unified Data
Customer Engagement Lifestyles Platform Platform
Platform
 THANK YOU

Board Expert HIPPINDO Yongky.Susilo@gmail.com