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Distribution Systems
Dyah Ayu Rahmawati
External Matters
For foreign company
and Challenges

Orientation & Unique Modern Period

Characteristics Convenience store
Relationship orientation Characteristics in Modern
Customer Service
Unique Features

Distribution system
In History in Indonesia
Japanese distribution In general
system from Edo
Period until 1998
Japanese Distribution
viewed as the most complex,
inefficient and expensive
In History

Edo Period

Government encouraged 8
formation of SMEs &

Retail shop
Number of

Japan divided into 500 began to
regions decreasing
Small manufacturers

heavily depend on
wholesaler for survival
Product often
overpriced independent retailers

Wholesalers Role :
Provide appropriate and timely market information
Financial support to smaller manufacturers & retailers
Relationship Orientation & Emphasis on Customer Services

Relationship orientation advantages :

Can easily
suggest for
innovation Conducive
information sharing

Customer Service is not only priority but a necessity

Price almost set

by manufacturers Competition happens in :
Unique Attributes of Japan Wholesalers

Manufacturers Process is similar to

rarely sell product Prefer to work with consignment
directly to retailer domestic wholesaler (accept unsold goods)

train retailers how to sell, Supply & Deliver small

display, advertising, and etc. quantity to retailer
Unique Attributes of Japan Wholesalers

Japanese company choose its distribution channel based on

2 primary factors :
Demands of Consumer
Production technology used & nature of the industry

Japan : order specific models from salesman who visits

consumer house. Salesman send the order to manufacturer
Factory Finish Deliver after1 or 2 weeks
For Foreign Company
Japanese business partner is very important
They also play central role in develop a close relationship
In modern area, theres a change in Import Management :

Conventional Route :

Import Processing + Primary Intermediary Small

Producer Agent Packing plant Wholesalers Wholesalers Wholesalers Retailers

Restructured Route :

Importing Processing & Distribution

Producer Packing plant
company centers
Challenges for Japanese Distribution Systems

There was In store brands After 1998s Wholesalers

unspoken agreement developed by Small retailers ventured with
regarding appropriate retailers and foreign suppliers
price for non-durable become less Bigger & import become
goods dependent wholesalers important

They become more Western in Practice!!

Created an original distribution system. Everything done
by the company

80% of its product produced in China & selected item

produced in high volume

Nowadays they try to integrate their real stores with virtual

store. Currently online sales is 5% of total sales.
They offer the convenience of same day or next day
deliveries, or the opportunity to pickup or return online orders
at the nearest UNIQLO / local convenience stores.
Convenience Stores
1970 : aim not only to satisfy consumers needs but also to
circumvent the law and expand the supermarket business.
Focus on convenience

Natural Lawson Seven Eleven

Targeted health conscious people They place ATM machines and
Ex : free agricultural chemicals make an E-Money, Nanako
Characteristics in Modernization Period

Importing goods in large quantity & absences of wholesalers

Recent changes indicate a move toward greater efficiency
Modification made it easier for larger retail store to open & suit in
Japanese market
Japanese lifestyle changes & shifts in consumer values, behavior, and
innovative product solutions.
Distribution system in Indonesia
Java :
65 / Ltr
Papua :
600 / Ltr
Fastest : 2-3 Days

Fastest : 7-8 Days Java :

15.500 / 100kg 700 800 / 40 kg
Papua :
8.000 25.000 / 40 kg
Any difference with your


South Korea