Distribution Networks in Indonesia
Types of Outlet
- Department stores
- Located in big cities, they have several floors with specialized departments.
Matahari Putra Prima,
- Hypermarkets and supermarkets
- Located in big cities, they offer all types of products at reasonable prices.
Carrefour Indonesia, Hero Supermarket Tbk,
- Local shops/ superettes
- Located especially in residential areas, they offer a complete range of goods, at competitive prices.
Circle K, AM/PM, First Inti Retailindo, Sumber Alpharia Trijaya
- Specialized stores
- Supermarkets specialized in a particular field, located in town
Electronics: Electronic City
Toys: Trusindo Bina Pramata
Pharmaceutical products: Guardian
DIY/Home: Ace Hardware
Sport: Athlete's Foot
Culture: Toko Gunung Agung,
Shoes: Sepatu Bata
- Discount stores
- All products, located in towns, price is more important than quality
Ramayana Lestari Sentosa Tbk,
- Markets, traditional shops
- Itinerant merchants, traditional stalls, which you can find practically everywhere and which are part of the daily life of most of the population.
Evolution of the Retail Sector
- Growth and Regulation
- Consumer goods were originally sold on traditional markets which could be categorized in different sectors like wholesalers and retailers. With modern markets, most manufacturing companies do not distribute their products themselves as this is too expensive; they call on companies specialized in distribution, which, in turn, use traditional channels.
Doing business in Indonesia means going through a wide spectrum of agents, distributors or economic intermediaries. It may be difficult to find a distributor for storage, as expenses linked to warehousing are rather crippling. Corruption is everywhere, especially in the Customs, and this makes offshore warehousing more attractive (especially in Singapore). Likewise, corruption in police services and among local officials makes goods transport across Indonesia from a central warehouse very costly.
- Market Shares
- Although traditional markets are still dominant in Indonesia, modern retail shops, such as hypermarkets, are rapidly becoming more popular, especially in urban areas. Hypermarkets enjoyed the fastest growth rate in 2005: their number rose by 55% and their area by 51%. In spite of the rapid growth of modern retail shops, the "other" retailers of grocery products (small traditional stalls, itinerant merchants and other small retailers) represent 95% of all retailers and almost 56% of sales.
- Organizations in the Retail Sector
Indonesian shopkeeper's association on Multiply (APIM)
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Indonesia is a great long-term market for franchise businesses. The local industry started with three franchises in the 1970s and grew to some 35 franchises with 308 outlets by the early 1990s.
U.S. Commercial Service Poland on 3 Mar 2010 related to Distribution Networks in Indonesia
One critical aspect of a product's successful launch and sustainability is customer support and after-sales service. Some U.S. firms face difficulties providing this support due to distance from the U.S. and the costs of maintaining product support facilities.
U.S. Commercial Service Poland on 2 Mar 2010 related to Distribution Networks in Indonesia
The entry of U.S. firms into Indonesia's franchise industry largely ground to a halt due to the 1997 economic crisis in Indonesia. The depreciated and fluctuating rupiah made it difficult to pay franchise royalties in foreign exchange.
U.S. Commercial Service Poland on 1 Mar 2010 related to Distribution Networks in Indonesia
U.S. Department Of Commerce, Indonesia