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Indonesia retail Summit 2012

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  • 1. Strategy in Fashion RetailThe future of fashion retail in Indonesia Indonesia Retail Summit 2012 Thursday, May 10th, 2012 Aryaduta Hotel jakarta
  • 2. 1. Background2. Indonesia Retail Insight 20123. Strategy & Approach4. How to Grow Market5. SummaryCHAPTER
  • 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 Indonesias 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 industryBACKGROUND
  • 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. Indonesias 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 Indonesias retail sales are strong underlying economic growth, an enormous and expanding population (the worlds fourth largest, after China, India and the US), rising per capita incomes and the continued development of organized retail infrastructure. The populations 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 BMIIndonesia 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 companys 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 companys setting priorities specific objective objectives: setting goal, options and strategies formulation #1 . Perform SWOT #3. Identify Key/Core Analysis Business ProcessStrategy & Approach
  • 8. Business Strategy Outlook Branding Brand Market & Product Franchising Supplier Relationship Management Producing Product Packaging Selling Location Places Distribution Pricing AdvertisementStrategy & 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 marketStrategy & 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 segmentStrategy & 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 products characters Always use the latest technology for your store The product should fit the customers characters, (on-line/off-line) based on the stores area Product catalogues (touch screen technology, pdf Promotion should fit customers characters, based on format) the stores 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 actionHow to Grow the Market
  • 13. The New Indonesian Consumers Middle Market Indonesias 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. #1CREATIVE #2 DIFFERENTIATION#3TECHNOLOGY #4 QUALITY ORIENTEDSummary