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Jakarta Post

Offline retail sales still holding up

Selling like hotcakes: Shoppers crowd around a container of Hot Wheels toy cars during the Toys Christmas Sale at Grand Indonesia mall in Jakarta on Friday

Rachmadea Aisyah (The Jakarta Post)
Jakarta
Sat, December 15, 2018

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Offline retail sales still holding up

S

elling like hotcakes: Shoppers crowd around a container of Hot Wheels toy cars during the Toys Christmas Sale at Grand Indonesia mall in Jakarta on Friday. Ahead of Christmas, many people shop for gifts for their relatives and friends, while retailers attempt to attract shoppers with discounts.(JP/Ricky Yudhistira)

Despite the easy access to online shopping and its heavily discounted prices, 26-year-old Kenji Bisma is sticking with shopping with his family in bricks-and-mortar stores, which he says continue to provide special
experiences.

Kenji said that more than anything else shopping for the Christmas and New Year holidays should be about spending time with loved ones.

“Offline shopping is more of a tradition [for me] as it is, most importantly, about going out together with family members,” Kenji, a native of Depok, West Java, told The Jakarta Post on Friday.

He said that although online sellers offered many discounts and sweet deals, most of what he needed for the Christmas celebrations was available in local businesses.

“In terms of stock, there are items which I can only be sure about when I check them directly, especially for personal needs and home decorations,” he said.

For others, shopping at local shopping malls supplemented their habit of buying things online.

Reza Hadyan, 23, said he regretted spending too much during the recent National Online Shopping Day (Harbolnas), now that he could not afford to buy a pair of sneakers he had his eye on at a shopping mall near his home in Bekasi, West Java.

“All my friends from work are just the same. They shopped so much during Harbolnas that our office’s reception desk is starting to look like a shipping company there are so many packages on it.”

The appeal of direct shopping has also driven companies to continue running bricks-and-mortar stores despite migrating some of their businesses to online platforms.

One company that continues to have faith in its offline operations is listed multi-brand retailer PT Mitra Adiperkasa (MAP), which launched in 2016 its online store, mapemall.com, after more than two decades running its offline retail business.

MAP head of corporate communications Fetty Kwartati said MAP’s offline stores had remained the biggest driver of the company’s sales, especially during the Christmas and New Year holidays.

“The peak season for MAP’s [offline] stores has always been the end of the year,” Fetty told the Post on Friday.

“The purchasing power of the middle-upper income bracket, which is our main target, is not showing any sign of slowing down, with demand remaining very strong,” she said.

Traditionally, the fourth quarter has always been the biggest contributor to MAP’s yearly sales, which have been showing 18 to 20 percent growth year-on-year, Fetty added.

Furthermore, the recent recovery in the rupiah’s exchange rate is expected to further improve MAP’s revenue toward the end of the year as the company, which imports 50 percent of its stock, will be able to sell goods at more competitive prices, she said.

Other retailers like publicly listed Matahari Putra Prima (MPP) have also banked on their offline operations to improve sales.

Head of corporate communication for MPP, Fernando Repi, said the company was optimistic toward the end of the year, expecting that shoppers would spend big on their holiday bonuses.

MPP, which operates superstore chain Hypermart in Indonesia, expected that its latest marketing strategy could generate an increase of at least 20 percent in year-on-year sales this December.

“We have been improving our [sales] data management so we can see what products sell the most in each province,” Fernando said.

“For example, the demand for carbonated drinks in eastern Indonesia is much higher than in the other regions, so we provide promotions for that product specifically in the region.”

While MPP had yet to calculate the actual surge in sales in the first two weeks of December, it had observed a visible increase in store traffic, Fernando said.

In the final analysis, Fernando said that offline transactions would continue to generate most sales.

“We have to admit there has been fluctuations in our customers’ shopping patterns [between offline and online stores], but we have an advantage over online stores. With physical stores we can arrange better promotions based on past experience,” said Fernando.

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