Indonesia Retail Report Q1 2013

The Indonesian Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on Indonesia's economic outlook of inflationary pressures. The report examines how best to maximise returns in the Indonesian retail market while minimising investment risk, and also explores the impact of the evolving eurozone debt crisis, a hard landing in China as well as tepid growth in the US and Japan on the Indonesian consumer and on the ability of producers and exporters to realise returns in the short term.

The report also analyses the growth and risk management strategies being employed by the leading players in the Indonesian retail sector, as they seek to maximise the growth opportunities offered by the local market.

Indonesia comes fifth out of seven in BMI's Asia Retail risk/reward ratings, although it outperforms slightly for rewards.

Among all retail categories, Mass Grocery Retail (MGR) will be the outperformer through to 2017 in growth terms, with sales forecast to increase by 69.7% between 2013 and 2017, from US$42.41bn to US$71.97bn as the large population is tempted by certain aspects of modern retailing such as private labelling, price promotions and bulk selling.

In the competitive arena, BMI sees upside potential in the government's interference in hypermarket planning, which should encourage growth in the medium-sized supermarket sector and the convenience sector.

Over the last quarter, BMI has revised the following forecasts and views:

?? The Indonesian economy's strong H112 performance has led BMI to upgrade its 2012 GDP forecast to 6.0% from 5.4%. However, we believe that signs of overheating as a result of Bank Indonesia (BI)'s easy monetary policy are beginning to emerge, a phenomenon that will begin to unwind as we move into 2013. This, combined with declining external demand and a challenging outlook for commodities, has led us to downgrade materially our 2013 GDP forecast to 5.6% from 6.4% previously in line with slowing investment growth. Still, we note that even with this downgrade, we expect Indonesia to remain a regional outperformer.

?? Despite the resilient strength of the Indonesian consumer, BMI sees scope for a tempered slowdown in private consumption in 2013 as well. Indeed, indicators such as consumption goods imports (0.3% y-o-y in July versus 6.8% in June) and overall consumer lending (19.1% in July versus a cyclical peak of 26.1% in November, 2011) suggest that the consumer's surge may already be moderating. Beyond the BI-led credit tightening, the considerable slowdown in investment activity is also likely to have knock-on effects for the Indonesian consumer, as has been the case in the past. For this reason, we have downgraded our 2013 private consumption forecast to 5.5% from 5.9% previously, and caution that risks are weighted to the downside.

Table of contents

Chapter - Executive Summary

Chapter - SWOT Analysis

Indonesia Retail Business Environment SWOT

Indonesia Political SWOT

Indonesia Economic SWOT

Chapter - Market Overview

Current Trends

Key Players

Chapter - Industry Forecast Scenario

Consumer Outlook

Retail Growth Outlook

Table: Indonesia Retail Sales Indicators,-

Table: Retail Sales Breakdown By Key Segment, f

Macroeconomic Outlook

Table:Economic Activity

Chapter - Regional Retail Outlook

Asia Pacific Retail Outlook

Table: Asia Pacific Retail Sales, - (US$bn)

Table: Share Of Regional Retail Sales, - (%)

Table: Asia Pacific Food Consumption, - (US$bn)

Table: Asia Pacific Macroeconomic Outlook, -

Chapter - Risk/Reward Ratings

Asia Pacific Risk/Reward Ratings

Table: Regional Retail Business Environment Ratings

Indonesia's Retail Rating

Limits To Potential Returns

Risks To Realisation Of Returns

Chapter - Mass Grocery Retail

Indonesia Mass Grocery Retail Industry SWOT

Market Overview

Table: Mass Grocery Retail Sector – Estimated Number of Outlets by Format, -

Table: Mass Grocery Retail Sector – Sales by Format (IDRbn), -

Table: Mass Grocery Retail Sector – Sales by Format (US$mn), -

Table: Average Annual Sales by Format –

Industry Forecast Scenario

Table: Mass Grocery Retail Sales by Format, -

Table: Grocery Retail Sales by Format (%) – Historical Data & Forecasts

Industry Developments

Chapter - Consumer Electronics

Indonesia Consumer Electronics Market SWOT

Indonesia Electronics Industry SWOT

Market Overview

Computers

Table: Computer Spending By Sector (estimate)

Table: Computers: Sales

AV

Table: AV: Demand

Mobile Handsets

Table: Mobile Telephone Industry Sales

Industry Forecast Scenario

Table: Consumer Electronics Overview, -

Industry Developments

Chapter - Automotives

Indonesia Autos Industry SWOT

Industry Forecast Scenario

Table: Indonesia Automotive Market Overview, -

Sales

Production

Trade

Table: Automotive Market Trade, -

Industry Developments

Passenger Cars

Table: Automotive Market Passenger Sales And Production, -

Segment Developments

Premium Segment

Chapter - Demographic Outlook

Table: Indonesia's Population By Age Group, - (')

Table: Indonesia's Population By Age Group, - (% of total)

Table: Indonesia's Key Population Ratios, -

Table: Indonesia's Rural And Urban Population, -

Chapter - BMI Methodology

How We Generate Our Industry Forecasts

Sources

Related research categories

By sector: Retail (in Off-trade)

By market: Indonesia (in Asia)