TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Retailers told to adjust to millennial generation preferences
In an increasingly competitive business environment, retailers have been advised to adapt to social change and apply creative marketing strategies to keep their businesses afloat
Change Size
I
n an increasingly competitive business environment, retailers have been advised to adapt to social change and apply creative marketing strategies to keep their businesses afloat.
By 2020, more than half of Indonesia’s population, which currently numbers some 260 million people, will be dominated by the youth.
The young generation, often called the millennials, had different shopping habits and preferences that retailers needed to be aware of, Finance Minister Sri Mulyani warned businesspeople in the retail sector.
“Even though [the millennials] don’t necessarily have money, they are confident, connected and creative,” Sri Mulyani said recently when opening the Modern Retail Expo 2017.
As young shoppers become more connected to the internet, many of them buy what they need through e-commerce sites using their mobile phones rather than visiting brick and mortar stores.
As evidence of the shift from offline to online shopping, Sri Mulyani pointed to data showing that tax revenue from courier services and warehousing climbed by 35.58 percent and 16.85 percent, respectively, in the January-October period of this year from last year.
She added that retailers needed to look at the demographic composition, preferences and purchasing power to lure visitors.
At present, the digital economy contributes 7.3 percent to the gross domestic product (GDP) and e-commerce only accounts for some 2 percent of total retail sales.
The increasing accessibility of the internet in Indonesia, along with the surging number of young people, however, are expected to drive the growth of the digital economy, including e-commerce.
Shopping malls in the country’s urban centers have become popular places for recreation and shopping under one roof. The number of malls has expanded to 312 as of 2017 from 240 in 2014, with the majority located in Greater Jakarta.
A number of malls booked double-digit growth in visitor numbers in the first half of 2017 from the corresponding period of last year, such as Gandaria City (up 20 percent) and Kasablanka Mall (up 18 percent) in Jakarta.
At the same time, however, many malls are struggling to attract buyers to their shops, as visitors tend to engage in activities other than purchasing goods, such as dining. The number of visitors to Metro Pasar Baru in Central Jakarta, for instance, dropped by 59 percent year-on-year (yoy) in the first half of 2017.
The government is drafting a regulation to tax e-commerce firms to create a level playing field between online and offline retailers.
It is also promoting 10 priority tourist destinations across the country to attract more tourists to regions other than Bali. Surging tourist visits are expected to help the retail industry.
To further support offline retailers, the Indonesian Shopping Center Tenant Association (Hippindo) demanded the government promote tax refund facilities for tourists and lower the minimum purchase amount for such facilities.
“Tax refund is a discount concept for tourists that will encourage them to shop,” Hippindo chairman Budihardjo Iduansjah said.
