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Traditional stores go by many names: mom-and-pop stores, kiranas (India); warung (Indonesia); kedai runcit (Malaysia); sari-sari (Philippines). They include markets, street vendors and kiosks, and are a major feature of Asia’s grocery retail landscape. 

They’re also the specialist subject of Johann, one of our Singapore-based senior retail analysts. We asked Johann for his views on the traditional channel and the opportunities it presents for suppliers.

Q: How are traditional stores making themselves stand out? 

A: They’re known for providing the freshest produce. In fact, the traditional channel began when farmers’ markets started selling excess produce directly to consumers. Stores prepare products – like cheese – freshly every day or offer ranges shoppers can’t find elsewhere.

Offering personalised service is another way to be distinctive. Many traditional stores serve a small catchment area, so owners inevitably get to know their shoppers well. They can then offer advice, product recommendations and value-added services like free home delivery.

Q: What do shoppers like about the channel?

A: As well as the above, many shopkeepers are willing to sell loose products in smaller quantities. We’ve seen this flexibility across many product categories – rice, spices, dried goods, vegetables, biscuits, snacks. 

Shoppers can buy what they need, manage their spending and reduce wastage. It can also encourage them to sample a wider range of products. So, if you supply traditional stores, you should consider whether you can help provide this level of choice. 

Q: How does traditional trade compete with the rise of online shopping? 

A: It’s quick to recognise the benefits of modern innovations and adopt them to attract shoppers. In India, banks are giving traditional shopkeepers handheld payment devices that operate on a mobile network. In China, stores and even market vendors are increasingly accepting cashless payments by displaying a QR code. 

Traditional retailers are also improving their in-store environments. In Malaysia, we’ve seen stores with spacious, clutter-free aisles and attractive displays. Some stores in India have upgraded to include air-conditioning, bright lights and electronic tills.

Q: What’s the outlook for traditional trade in Asia?

A: Traditional trade forms 79-98% of the grocery market in Indonesia, India, the Philippines and Vietnam. We forecast that by 2022 it will still dominate these markets. 

However, the growth rate varies greatly across the region. We expect it to decline in Singapore and Japan over the next five years. 

Q: What’s the one thing suppliers need to know about the channel?

A: Traditional trade remains a vital part of Asia’s grocery retail market. You’ll need to continue investing in it, as it’s here to stay. 

Subscribers to IGD Asia can find more examples of best practice in traditional trade here

Asia’s FMCG market is the largest in the world, making it the number one growth opportunity for suppliers and retailers. We can help you trade successfully in Asian markets, and benefit from this growth, with our new IGD Asia service.
 

Groceries delivered directly to shoppers’ homes.

Making use of QR technology

JD Indonesia has launched a grocery delivery service that allows train commuters to shop for groceries whilst on the way home. JDVirtual, the new service, is now available at selected Commuter Line train stations in Jakarta.

Commuters can order food, beverages as well as other everyday groceries by scanning a QR code at these train stations. Designed to be fast and easy to use via the JD mobile app, these purchases will then be delivered to the shopper’s registered address.

Begun in 2008, the commuter line serves the greater Jakarta Metropolitan Area and sees an average daily ridership of more than one million passengers.

New shopping experiences

The launch of JDVirtual follows the opening of JD’s first unmanned store in Indonesia last month. If successful, similar virtual stores can be rolled out to airports, bus terminals and ship ports around Indonesia. JD.ID President Director, Zhang Li said, “we believe that with JDVirtual, a borderless shopping concept will provide a real solution for modern retail industry, while also helping to run our mandate to help bring Indonesia forward.”

Find out more about JD.com here.

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Technology first introduced in China is now available in Jakarta.

First of its kind store

JD.com, a leading online retailer in China, has opened its first unmanned store outside of China. Called JD.ID X-Mart, this store is located in PIK Avenue, an upmarket shopping mall in Jakarta. The 270 sq m store stocks a range of food, health and beauty products as well as an assortment of fashion apparel.

This store relies on a combination of radio frequency identification (RFID), in-store cameras and facial recognition to remove the need for queuing up at the cashier. The technology was first introduced in China, where JD.com now operates 20 similarly unmanned stores.

More about JD.com

JD.com launched its ecommerce site in Indonesia in 2016 and currently serves 20m customers there. It has nine fulfilment centres throughout Indonesia and has announced plans to open another four more this year.

An overview of JD.com can also be found here.

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Transmart Carrefour partners with Indonesian Mosque Council to open up to 300 stores.

Convenience stores located in mosque districts

Trans Retail Indonesia, the operator of Transmart Carrefour hypermarkets, has signed a memorandum of understanding with the Indonesian Mosque Council (Dewan Masjid Indonesia, DMI) to launch up to 300 convenience stores.  

These stores, with a maximum size of 250 sq m, will operate in selected mosque districts. The stores will be located in Jakarta, Sukabumi, Bandung, Bekasi and Depok, as well as other provincial centres.

Under the agreement, Trans Retail Indonesia will supply and stock the stores while DMI will look after operations and retail infrastructure. Trans Retail Indonesia will also share its retail experience in areas such as merchandising, purchasing and logistics. Revenues from this partnership will be split evenly between both parties.

Providing different facilities to remain competitive

Although these stores will compete with existing retailers such as Indomaret and Alfamart, the Transmart Carrefour stores intend to provide different facilities and services to differentiate itself from the competition. Such facilities include co-working spaces and specialised loyalty discount programs.

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This in-depth guide to Indonesia explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

Five year growth forecasts for the grocery market, the leading retailers and modern trade grocery channels in Indonesia.

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