Indonesia has an approximate population of 280 million and is the most populous economy in the Southeast Asia region. Its economy is expected to expand by 5% in 2025. The country also sees a fast-growing young middle-class population paired with higher connectivity in the digital world. The retail market's sales volume is forecasted to go from $133 billion in 2021 to $243 billion by 2026.

Here are the ideal retail strategies for the brands to target the country of Indonesia.

Youthful Lifestyle

Indonesia has recorded a total of 74,93 million Gen Z population, the country's highest percentage (27,94%). The brands have to target them with lifestyle and educational-based strategies. It will include cross-industry partnerships and collaborations with influencers and brands that go well with the market and open new paths. For instance, the activewear brands can team up with health and wellness apps.

Lifestyle-driven strategies will make the audience discover more about the brands through common hobbies and interests such as K-pop, gaming, outdoor activities, etc. The retail stores can act as educational spaces for the customers that assist the brands in communicating their equity and fostering a long-term relationship with the younger audience. The store staff must be trained well in product description along with in-depth knowledge of the product.

The educational approach can also happen in live streams with influencers explaining about the products. It will show the brand’s transparency about its production and make it more appealing to Gen Z.

Sunday Space Market is a youth-targeting weekend bazaar in Indonesia that brings together domestic brands, artists, and thrift stores to showcase their products. Sun & Sand Sports, the sports retailer from Dubai, partnered with the brand On to organise a community run and coach event, elevating the enthusiasm for running. Lippo Mall Puri hosted a Hallyu-themed festival, named Puri Daebak, featuring fashion and food booths with K-pop karaoke and dancing sessions in Jakarta in May 2024.

Elite Exclusivity

Brands can offer highly-curated, exclusive products and services for the highest-spacing customers to maintain prestige and a good relationship with them despite the luxury democratisation. The country’s richest population offered at least 46,71% of the total expenditure in 2023. The services will also include hospitality with privacy and a relaxing nature. The space must create a sensorial wonder and be highly Instagram-mable.

Here, by-appointment-based catering will help the luxury brands to fence the exclusivity more. These services can be combined with an intimate, thoughtful, and gentle sale. Even for the product selling, the staff must be equipped well enough to have a rich conversation with the clients which leads to a zero-party data collection. This data will also help in personalising the complimentary offerings for the client.

In August 2023, the Pacific Place flagship of Louis Vuitton in Jakarta showcased a function room for important clients to relax and shop in privacy. The digital retailer from Indonesia, Sonderstudio, runs the business on a by-appointment basis on weekends only. The customers will get access to in-house styling schedules with free service and a minimum fee.

Go Over and Beyond Traditional Retail

The middle-class community in Indonesia has disposable income to spend. For them, contemporary retailing won't be captivating. Brands have to combine entertainment such as competitions, broadcasts, events, live performances, and more with retail to offer an experiential service.

The retail space must have gamified and fun touchpoints for the consumers to play with. It also can include some complementary services or reward programs and in-store services to drive the consumers to buy products.

Brands and retailers have to approach the consumers with a highly-curated strategy in in-mall bazaars and fairs. There must be social elements embedded in the space for the shoppers to enjoy and feel relevant to enjoy and socialise with their family and friends. It also opens the opportunity to provide hospitality like cafes and other corners.

Coach has a restaurant and coffee shop at the Grand Indonesia Mall, launched in March 2024. The space features the brand’s curated designs, playlist, and menu reflecting the New York City heritage.

Foster to Rural Areas

Global and local brands have to get familiar with the domestic retail networks to curate the right offering in the right place to connect the rural population (which accounts for more than 41% of the total population) of Indonesia. They have researched rural shoppers and decided whether the particular population will be the audience who comes to shop. The mass-market brands can gain immediate attraction, whereas the premium brands have to think about launching more cheaper and affordable sub-brands.

The brands can penetrate to the region by collaborating with local retail networks such as the e-commerce platforms and last-mile logistics bearers. This region can also foster rural empowerment programs that will offer support and training for budding entrepreneurs and other individuals. It is also ideal to think of selling products at affordable prices or offering mini-sizes of the products.

Influencers and sellers who are well-known for their rural dialects on TikTok and Instagram will be a good way to collaborate and promote the products.

Japanese department store chain Lawson started working with domestic minimart company Alfamart to experiment with establishing mini-outlets inside supermarkets and malls. It allows the company to expand itself in the country without major investments.

TikTok, in collaboration with Indonesia-based e-commerce website Tokopedia, is focusing on growth to support and assist domestic micro, mini, and medium-sized enterprises (MSMEs).

Consider Religious Aspects

98% of Indonesia’s population believe religion to be a very important factor in their lives. Around 87% of the total population are Muslim. Therefore, the brands and retailers have to cater to Islamic lifestyles. They have to work on their marketing calendars focusing on the Islamic calendar such as Lebaran and Ramadan to surge the sales.

They have to offer gift hampers, packaging, and products as well as flexible designing and retail formats that go well with the festival season. Launching a pre-selected shopping list for consumers to streamline their shopping experience during the season is a good option.

With a relevance of cultural aspects, the brands have to work on new KPIs that will prioritise authenticity and ethics while selling products. Especially during the Lebaran, the shoppers have experienced distress due to consumerist culture. They have to assure the consumers that their products are halal-certified.

Here, the brands have the opportunity to partner with local Islamic banking networks. 65% of young Indonesian consumers directly prefer traditional payment methods. They can include new rewards, charitable events, and financial education campaigns.

In December 2023, Rose All Day Cosmetics, an Indonesian beauty brand with halal certification, earned $5,41 million in funding due to the strong demand for halal beauty products. METRO, the department store in Indonesia, started the METRO Festive Raya Fashion Show in Jakarta at Plaza Senayan to highlight the Eid collections of four local designers.

BOSS reopened its flagship store with a new concept in Plaza Jakarta, Indonesia in March 2024, showcasing the Spring Summer 2024 collection of primarily menswear. In May 2024, Fendi Casa, in collaboration with the domestic retailer Moie, unveiled its first flagship store in Indonesia at Pacific Place Mall in Jakarta. At the same time, Louis Vuitton opened its new flagship store in Indonesia at Plaza. Apart from that, Miniso opened its world’s largest store in Jakarta at Central Park Mall. The store spans around 3.0000 square metres.

Cover image: Louis Vuitton's Pacific Place Outlet in Jakarta, Indonesia, courtesy Louis Vuitton official website.