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apanese retailer AEON Co. Ltd. is set to enter Indonesia through its subsidiaries, PT AEON Mall Indonesia and PT AEON Indonesia, in the hope of benefiting from growing domestic consumerism.

“We consider that Indonesia has great prospects. We are confident we can take a share of the Indonesian market as a unique retail player,” AEON Indonesia president director Toyofumi Kashi said.

“We will offer alternatives in shopping services, product quality and the shopping environment. We predict that in the near future, middle-class customers will no longer be satisfied with the existing services and products,” Kashi added.

AEON Mall Indonesia will focus on the development of shopping malls, while AEON Indonesia will be in the retail business.

AEON Co. Ltd. currently operates in 12 countries, including China, Thailand and Vietnam, according to its website. The company has various forms of business, including a supermarket chain, general merchandise stores, shopping centers and credit services.

It also manufactures its own brand, Topvalu.

Kashi confirmed that AEON had appointed PT Bahagia Niaga Lestari as the franchisee for its convenience store, Ministop.

“The appointment of PT Bahagia Niaga Lestari is only for our convenience store business. We are always on the lookout for potential partners to strengthen our future business in Indonesia,” Kashi said.

Indonesia’s retail sector is benefiting from increased domestic purchasing power, which has helped the country offset the slowdown in the global economy. The country’s retailers reported two-digit growth in business last year.

The Jakarta-listed PT Hero Supermarket, which runs supermarket chains Hero Supermarket and Giant as well as beauty and drugstore Guardian and minimarket Starmart, reported 19 percent growth in revenue for the first nine months of 2012 year-on-year.

Fashion retailer PT Matahari Department Store announced on Monday that it had also posted 19 percent growth in its net revenue for 2012 to Rp 5.62 trillion (US$584.19 million) from Rp 4.7 trillion in 2011.

The A. T. Kearney Global Retail Development Index 2012 stated that countries in Asia Pacific still showed potential for retail sector growth. The main propeller of that growth was the growing middle classes in these countries, whose members were becoming increasingly brand-conscious.

“Even as its tier 1 cities become saturated, global retailers are moving on to tier 2 and 3 cities to become the first movers in untapped growth markets. In recent years, Asia has been a target for Japanese and Korean retailers seeking to offset domestic declines,” the report added.

Several large retail groups have entered the Indonesian market, such as Korea’s Lotte Mart, convenience-store chain 7-eleven and Circle-K, while Hero Supermarket announced last year that it had agreed to collaborate with Scandinavian furniture retailer IKEA.

Just last week, holding company PT Multipolar announced that it would be selling its 26.1 percent stake in PT Matahari Putra Prima — the owner of the Hypermart store chain — to Singapore’s Temasek Holdings Ltd.

In some cases, however, local businesses are proving resilient. Last year, a business belonging to tycoon Chairul Tanjung, PT Trans Retail, purchased a 60 percent stake in PT Carrefour Indonesia from French Carrefour SA, making Trans the sole owner of the retail giant.

Given the degree of competition in the marketplace along with several new government regulations, lower growth was expected this year, the deputy secretary-general of the Indonesian Retailers Association (Aprindo), Satria Hamid, said. He pointed out that the higher electricity tariff, a possible increase in fuel prices, the higher minimum wage and a government regulation limiting franchisors and franchisees to a maximum of 150 outlets, would put pressure on the retail sector this year.

“Retail turnover will only increase by 8 to 10 percent,” Satria said. He added that the combined turnover of Aprindo members — 460 companies with 18,000 outlets — totaled Rp 135 trillion last year, a 12.5 percent increase compared to Rp 120 trillion in 2011.

“We have to improve domestic retailers. The market is very competitive and Indonesian consumers have high expectations in terms of prices and services,” Satria said.