Market Trends of Indonesia Retail Sector Industry
This section covers the major market trends shaping the Indonesia Retail Sector Market according to our research experts:
Online Retailing is Gaining More Traction, Yet Physical Retailing is Dominating the Market
Indonesians have started embracing digital technology with enthusiasm and are among the world's most avid users of social media. Likewise, Indonesia has a growing digital ecosystem featuring online commerce, media distribution, ride-sharing services, financial services, etc., and also, the country has the leading number of billion-dollar tech startups in the Southeast Asian region, which includes Bukalapak, Tokopedia, Go-Jek, Traveloka, and others. Similarly, the retail sector has started an experienced growth in market share of the online distribution channel during the study period, yet due to customer sentiments and beliefs, physical retailing has dominated the market. Amidst the COVID-19 pandemic, online retailing has become very strong during 2020, which is expected to continue in the forecast period as well, owing to the high adoptability rate and convenience it offers.
Food and Beverage Sector Plays a Vital Role in the Indonesian Economy
The F&B sector plays a vital role in the Indonesian economy. Indonesia's position in the global F&B market is uncertain, as, on the one hand, Indonesia is one of the largest producers of palm oil, fish, cocoa, and coffee, exporting its production surpluses abroad, while on the other hand, Indonesia relies on imports of products that cannot be produced (either at all or insufficient quantity) locally, such as wheat, dairy, or processed food products. Amid the COVID-19 pandemic, the F&B sector has emerged as one of the more resilient pockets of growth in Indonesia's economy. Despite the plunge in demand during the annual Ramadan period as a result of the outbreak, the sector was able to record positive year-on-year growth rates of 3.94% and 0.22% for the first and second quarter of 2020, respectively.
