LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Retail Market Overviewfrom the UK in 2004. More recently, Japanese retailer Seibu has confirmed plans to open their first outlet inJakarta.Increased consumerism, growing expatriate communities (particularly in Jakarta) and changing lifestylepatterns in major urban areas have lead to foreign cafés, restaurants and food operators opening stores.When Starbucks first opened their outlet in Jakarta in 2002, they gained an overwhelming response fromboth local and expatriate communities in Indonesia. On four years, they have expanded their outlets toaround 40 throughout Indonesia.Breadtalk, a bakery chain from Singapore, has also enjoyed a positive reception, growing to 14 outlets inprime shopping malls in Indonesia’s major cities since, from one in 2003.Other international food and beverage (F&B) chains are enjoying strong growth and acceptance in thelocal market. Leading brands that were already present in Indonesia before 1998 include McDonald’s,Kentucky Fried Chicken and Pizza Hut. These international fast food chains not only have outlets in majorcities but have also expanded into smaller cities throughout the country.The leisure and entertainment retailing sector, which includes cinemas, amusement parks, fitness clubs,billiard halls and bowling centres, has witnessed growth in line with the growing middle and upper incomegroups, and have become particularly popular with young families and the under 25 age groups. Populardestinations in this sector include Timezone, FitnessFirst, Celebrity Fitness and, more recently, BlitzMegaplex from Singapore. Kidzania, a children’s edutainment (education and entertainment) park fromBrazil is continuing this trend, having entered into pre-commitments to expand into Jakarta.Increasing media exposure, better education and higher levels of domestic and international travel haveprovided consumers with knowledge and exposure to major international brands. Coupled with this newlyacquired knowledge is the development of new shopping malls in major cities which adopt modern lifestyleconcepts.2.5 New retail formats and retailersThe Indonesian retail industry has evolved from traditional markets to modern department stores andshopping malls over the past 30 years. Despite the fact that many Indonesian consumers still purchasedaily necessities at traditional markets, they have become more accustomed to shopping in large, modernmalls. In most larger cities, particularly in Greater Jakarta, which include the surrounding cities of Bogor,Tangerang, Depok and Bekasi, shopping malls have played a significant role in the development of thecountry’s modern retail industry.Some of the more prevalent modern retailing formats are described below.2.5.1 Department storeA department store which carries a wide range of merchandise that is organised into separatedepartments for the purpose of promotion, service and control. This format was first introduced in the1960s with the launch of the government-run department store, Sarinah. Department store expansionincreased in the 1980s with several local privately-owned department stores entering the market. Thesepioneers include Matahari, Ramayana and Pasaraya, which share overall market dominance with foreigndepartment stores such as Sogo and Metro. The former primarily target the middle and middle-lowerincome group, while Sogo and Metro cater to the middle-upper and upper class segment.2.5.2 SupermarketsA large self-service retail market that sells food and grocery items. The supermarket format wasintroduced in Indonesia in the 1970s with the launch of Hero and Gelael. The growth of supermarketsis concentrated in major metropolitan markets, focusing more on the middle-upper and upper incomegroups.2.5.3 MinimarketA mini version of supermarkets offering basic and daily necessities. This concept was initially introduced byforeign retailers, such as Circle K and 7 Eleven, starting in the late 1980s in major cities. However, theseF-26