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Indonesia retail Summit 2012
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Indonesia Retail Summit 2012
Thursday, May 10th, 2012
Aryaduta Hotel jakarta
Strategy in Fashion RetailThe future of fashion retail in Indonesia
CHAPTER
1. Background
2. Indonesia Retail Insight 2012
3. Strategy & Approach
4. How to Grow Market
5. Summary
Background
• It is regrettable that the Indonesian government signed the ASEAN-China Free Trade Area (ACFTA) agreement which becomes effective since January 10, 2010– Currently Indonesia is not ready to compete with Chinese products
– The fundamental reasons: High cost and in-efficiency (materials, energy cost, logistics, loan interest, low productivity of workers, regional minimum wage, lack of basic materials, spare part supply, etc)
– Impacts toward the industry: declining turnover, industrial production, earning fell, lay-offs, significant decline of Indonesian products total export while import of Chinese product increase significantly
• Indonesia’s economy and export rate is growing, but they are only contributed by coal, natural gas, palm oil, and other sectors which are exported in their raw forms without added value. On the other hand, the real sector is becoming more worrying, especially the textile industry
BACKGROUND
Insights on Retail Forecast Scenario for 2012
Indonesia's nominal GDP is forecast to be US$814.93bn
in 2011, and BMI predicts average annual GDP growth of
6.1% through to 2015. With the population forecast to
increase from 242mn in 2011 to 252mn by 2015, GDP per
capita is predicted to grow 67% by the end of the period,
reaching US$5,608 from $3,367 in 2011.
BMI forecasts that in 2011 retail sales will
be worth 19.3% of nominal GDP. By the
end of the forecast period we expect that
there will be a 19.9% contribution to GDP.
According to BMI, a combination of higher
employment, economic growth, large and expanding
population, rising per capita incomes and the
continue development of organized retail
infrastructure support our positive view of retail sales
development.
Source BMI
Indonesia Retail Insight 2012
Indonesia Retail Sales Indicators
2008-2015
According to BMI (2012), key factors behind the substantial forecast growth in Indonesia’s retail sales are strong underlying economic growth, an enormous and expanding population (the world's fourth largest, after China, India and the US), rising per capita incomes and the continued development of organized retail infrastructure.
The population's steady adoption of consumerism will also contribute to a trend that is likely to see the value of the retail segment grow from a forecast IDR1,382trn (US$132.82bn) in 2011 to IDR2,289trn (US$219.96bn) by 2015.
Source BMI | f = forecast BMI
Indonesia Retail Insight 2012
International Fashion Brands
MANGGA 2
ITC
Defining
Strategies and
Prioritize
Processes
Approach
Identifying & evaluating
the company’s SWOT that
are favorable and
unfavorable to achieve a
specific objective
Understanding the future
directions and actions
required by company in
order to fulfill company’s
objectives: setting goal,
options and strategies
formulation
Identifying business
processes critical to
defined strategies and
setting priorities
#2. Understand
Business Strategies
#2. Understand
Business Strategies
#1 . Perform SWOT
Analysis
#1 . Perform SWOT
Analysis
#3. Identify Key/Core
Business Process
#3. Identify Key/Core
Business Process
Strategy & Approach
Business Strategy OutlookBranding
• Brand
• Market & Product
• Franchising
• Supplier Relationship Management
Producing• Product
• Packaging
Selling• Location
• Places
• Distribution
• Pricing
• Advertisement
Strategy & Approach
Inspirational Indonesian Fashion Brands
• Consider these two t-shirts
• The basic materials are almost
the same
• But each has its own different
target market
Strategy & Approach
Generic
Strategic
Directions
Cost Led, a cost focused strategy: all areas are streamlines, efficiencies
Differentiated, about value added- finding way to be different from competition in away that customer will appreciate and pay for
Segmented, fulfilling a very specific market segment
Strategy & Approach
How to Grow the Market
#2 SHOPPER KNOW HOW
• The product should fit the customers' characters,
based on the store's area
• Promotion should fit customers' characters, based on
the store's area
• Ease of payment (COD, etc)
• Engage customers through social media
• Optimize your CRM (Customer Relationship
Management) tools to personalized each customers#3 REDEFINED RETAIL CARTOGRAPHY
• Categorized product line up based on the target
market
• Use fitting room as a place for experimenting and
delightful experience for your customers, with a
unique design
• Combine technology with the fitting room to spark
call to action
#1 ONLINE EXPECTATIONS | OFFLINE EXPERIENCE
• Exist in both off-line (conventional store) and on-
line (on-line store)
• Make your store (on-line/off-line) unique in
accordance with the product's characters
• Always use the latest technology for your store
(on-line/off-line)
• Product catalogues (touch screen technology, pdf
format)
• Affiliated member card (on-line/off-line)
How to Grow the Market
The New Indonesian Consumers
• Indonesia’s economic growth predicted to be an average 6,7 %
from 2012 - 2015
• There are around 130 million Indonesia middle class (World
Bank) or around 48% of the population
• Those 95% of middle and lower middle class is in pursuit to be,
or to be identified, as the upper middle class
Many companies are trying to get the 5% to attract the 95%
5%
30%
65%
Middle Market
Upper Middle
Middle
Lower Middle
Summary
Summary
#1CREATIVE #2
DIFFERENTIATION
#3TECHNOLOGY #4
QUALITY ORIENTED
THANK YOU
Medina L. Harjani (CEO – Pasaraya)