This document discusses strategies for fashion retail in Indonesia. It provides background on Indonesia's economy and the textile industry. Retail sales are forecast to grow substantially through 2015 due to economic growth, population expansion, and rising incomes. International brands are entering the market. Successful strategies include understanding business objectives, identifying core processes, and developing brand, product, and distribution strategies. Recommendations for market growth include integrating online and offline experiences, understanding customer segments, and redefining retail locations using technology and unique designs. The future of Indonesian retail is promising due to a growing middle class seeking quality fashion brands.

1. Strategy in Fashion Retail
The future of fashion retail in Indonesia
Indonesia Retail Summit 2012
Thursday, May 10th, 2012
Aryaduta Hotel jakarta

2. 1. Background
2. Indonesia Retail Insight 2012
3. Strategy & Approach
4. How to Grow Market
5. Summary
CHAPTER

3. 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

4. Insights on Retail Forecast Scenario for 2012
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.
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. Source BMI
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.
Indonesia Retail Insight 2012

5. 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

6. International Fashion Brands
MANGGA 2
ITC

7. Defining
Strategies and
Prioritize
Processes
Approach
#2. Understand
Business Strategies
Identifying & evaluating Understanding the future Identifying business
the company’s SWOT that directions and actions processes critical to
are favorable and required by company in defined strategies and
unfavorable to achieve a order to fulfill company’s setting priorities
specific objective objectives: setting goal,
options and strategies
formulation
#1 . Perform SWOT #3. Identify Key/Core
Analysis Business Process
Strategy & Approach

8. Business Strategy Outlook
Branding
• Brand
• Market & Product
• Franchising
• Supplier Relationship Management
Producing
• Product
• Packaging
Selling
• Location
• Places
• Distribution
• Pricing
• Advertisement
Strategy & Approach

9. Inspirational Indonesian Fashion Brands

10. • Consider these two t-shirts
• The basic materials are almost
the same
• But each has its own different
target market
Strategy & Approach

11. 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

12. How to Grow the Market
#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
#2 SHOPPER KNOW HOW accordance with the product's characters
• Always use the latest technology for your store
• The product should fit the customers' characters, (on-line/off-line)
based on the store's area • Product catalogues (touch screen technology, pdf
• Promotion should fit customers' characters, based on format)
the store's area • Affiliated member card (on-line/off-line)
• Ease of payment (COD, etc)
• Engage customers through social media
• Optimize your CRM (Customer Relationship
#3 REDEFINED RETAIL CARTOGRAPHY
Management) tools to personalized each customers
• 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
How to Grow the Market

13. The New Indonesian Consumers
Middle Market • Indonesia’s economic growth predicted to be an average 6,7 %
Upper Middle from 2012 - 2015
Middle • There are around 130 million Indonesia middle class (World
Lower Middle Bank) or around 48% of the population
5%
• Those 95% of middle and lower middle class is in pursuit to be,
or to be identified, as the upper middle class
30%
Many companies are trying to get the 5% to attract the 95%
65%
Summary

14. #1
CREATIVE #2
DIFFERENTIATION
#3
TECHNOLOGY #4
QUALITY ORIENTED
Summary

15. Medina L. Harjani (CEO – Pasaraya)
THANK YOU