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Booming Convenience Stores Industry in Indonesia
Added: (Mon Feb 13 2006)
Ever since the inauguration of Jakarta’s second subway line last December, 7-Eleven one of the world’s largest convenience store chain has made its presence felt in the subway stations of Jakarta and other cities.
7-Eleven is slated to open their stores at all the 16 subway stations en route. This US backed convenience store giant caters to regular-use products such as milk, newspapers, batteries, beverages, and snacks. It plans to upgrade its merchandise and facilities depending on customer requirements and hike in subway passenger traffic.
Based on the findings of the market research report named, “Asian C-Store Industry: An Overview” presented by RNCOS, Indonesia with a growth of 43% is going to lead all the South East Asian countries, as the center of all convenience store and retail store expansion.
The Indonesian Retailers Association is upbeat about an upsurge in retail sales in the current year. This fast growing sector is becoming the cynosure of foreign investors eyeing this market. The convenience store chain 7-Eleven is shortly scheduled to launch its mini-markets spread over entire Indonesia.
While giving an in-depth analysis of the shopping and spending patterns in Indonesia, the report reveals that nearly fifty percent income of all Indonesians is spent on either food or food related products. Indonesia’s convenience store chains are gearing up to provide ready-to-eat meals at takeaway outlets and open drive-in meal joints at subway stations, gas stations, and major intersections on expressways.
The report also provides an insight into the mindset of the consumers, giving an item wise break-up of the total expenditure on food. As observed from this break-up, people spend the most on cereals followed by tobacco and packaged food.
The SWOT Analysis provided by the report highlights the reasons for the unprecedented growth of the convenience store industry as being due to the growth in Indonesian economy. This fact is reflected by the upward inclination of the spending graph, thus also proving that the increased incomes of the middle class are responsible for this spurt in spending.
The market research analysts at RNCOS believe that the growth of the convenience store industry has been possible due to rising urbanization trends. The increase in urbanization has increased the taste for fresh organic foods including fresh fruits and vegetables, salads, sandwiches and a wide array of beverages. Today shopping is an experience that people pursue for fun, recreation and adventure, as well as a way to buy more stuff.
On the other side, insecure political scenario coupled with the rising unemployment rate is the major deterrents to foreign direct investment (FDI) in the convenience store sector. The government needs to resolve these complex issues if it wants the industry to scale greater heights in the near future