Variety Stores in Indonesia

2020 IMPACT

Miniso collaborates with Jet Commerce to adapt to changing consumer behaviours and improve operation efficiency

Online shopping activity has experienced a significant increase during the pandemic in Indonesia due to consumers preferring to shop from the safety of their homes. This is no different in variety stores, with Miniso, a modern variety store from Japan and the dominant category leader, forming a collaboration with Jet Commerce, an e-commerce enabler company that provides integrated digital solutions.

MINISO expands across e-commerce channels to reach a wider pool of consumers

Over the review period, digital operations have continued to develop rapidly in Indonesia, especially with the emergence of various local and global e-commerce players. This has created an opportunity for offline retailers to increase their sales by venturing online.

Value growth boosted by expansion of new foreign brands

Despite only entering variety stores within December 2016, Miniso was able to expand aggressively (having 50 outlets within eight months of launching) and instantly became the second-ranked brand. Throughout 2017, Miniso opened another 88 outlets, half of which are located outside Java, and became the dominant first-placed brand.

RECOVERY AND OPPORTUNITIES

Recovery expected within a couple of years as products within channel are set to remain popular

Given new initiatives from channel players and the popularity of the dominant player Miniso, the performance of variety stores is expected to recover to pre-COVID-19 levels within the early forecast period. Whilst the products carried by variety stores are not primary or essential products, they are typically related to hobbies, home improvement, and appliance support.

Aggressive outlet expansion expected from Miniso as in-store retailing remains important in brand growth

Online marketplaces will continue to develop strongly over the forecast period and will offer a bridge for players reach to consumers in areas in which there are no physical stores. Although a smaller range of products are typically offered via e-commerce, the fact that they are accessible to consumers throughout the country will help to boost sales over the coming years, particularly whilst consumers are wary of making unnecessary trips outside the home as the fear of contracting/transmitting COVID-19 lingers.

Emerging variety store players set to stimulate channel growth

Since the easing of the Negative Investment List (DNI) in Indonesia in mid-2016, foreign retailers have flooded the country, including with foreign variety stores brands. While existing local players are forced to comply with regulations, the compliance of new foreign brands is low.