Department Stores in Indonesia

PROSPECTS

Targeting of higher income consumers helps to boost value sales

Over the review period, a number of large modern retail outlets were closed in response to changing public spending trends. On the other hand, small retail outlets continued to grow and make a profit.

Partnerships with shopping centres key to attracting consumers

The growth in the number of department stores reflects the increase in shopping centres in Indonesia. This is because shopping centres usually have at least one department store to act as a crowd-puller.

Expansion of fast fashion players represents threat to growth

Although there was a decline in the number of outlets during the review period, over the forecast period a number of new department stores are set to be opened every year. For example, in 2019, at least four new shopping centres are expected to be launched in Jakarta alone.

COMPETITIVE LANDSCAPE

Leading players tailor offering to evolving consumer trends

Matahari Department Store is trying to gain a more competitive edge by increasing average sales per store. Outlets located in the Jabodetabek area and outside Java are contributing strongly to growth in store sales.

Price sensitive consumers attracted by promotional activity

After challenging retail conditions for department stores towards the end of the review period, many players adapted their strategies. Although recovery is partly being supported by increasing incomes, Sogo, for example, is also utilising the momentum of holiday periods to encourage people to shop more often.

Responding to evolving consumer trends key to success

Focusing on consumers is a key strategy to maintaining competitiveness within department stores. Metro still faces challenges due to changes in consumer behaviour, such as the preference for experiences like traveling instead of shopping, which made sales stall.

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