Department stores has been amongst the retailing channels to be hit hardest by the COVID-19 crisis and, after experiencing a steep decline in the previous year, it was expected to see continued contraction in 2021. The large-scale social restrictions of PSBB and PPKM led to the closure of shopping centres, which provide the location for the majority of department stores.
Department stores players looked to appeal to price-sensitive consumers to try to stay afloat in 2021. Promotion programmes that included food and beverages, such as that introduced by Yogya Department Store, were amongst the most successful strategies employed in the channel.
Department stores players are pivoting to online channels, such as online marketplaces and social media. The shift in strategy in response to changes in consumer behaviours, which have been accelerated by the experiences of the COVID-19 crisis, is set to further shrink the store-based department store market, not only in the medium term but for the longer term.
During the forecast period, the Indonesian Government's easing of the restrictions on the operations of shopping centres will create more favourable conditions for the channel. As seen at the end of 2021, the enthusiasm of consumers to return to shopping at shopping centres after the PPKM period is revoked could be the basis for some optimism amongst department stores players.
The department stores channel is expected to see the continued contraction of the outlet network during the forecast period, maintaining a trend that was seen even before the pandemic. The decreasing number of department store visitors is the main reason for players in this channel to rationalise their store networks.
Alongside department stores players developing their own e-commerce platforms, they are expected to increasingly collaborate with third party e-commerce players to achieve a more positive performance over the forecast period. For example, Matahari Dept Store, has collaborated with Shopee to launch the Matahari Official Store.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in Indonesia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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Outlets selling mainly non-grocery merchandise and at least five lines in different departments, usually with a sales area of over 2,500 sq metres and arranged over several floors. Example brands include Macy’s, Bloomingdale’s, Marks & Spencer, Harrods, Sears, JC Penney, Takashimaya, Mitsukoshi, Daimaru, Karstadt, Rinascente.See All of Our Definitions
This report originates from Passport, our Department Stores research and analysis database.
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