MPPA launched Tokopedia virtual stores for its 23 supermarket chains on Thursday, including Foodmart, Hyfresh, Hypermart and Primo.

MPPA corporate secretary and public relations director Danny Kojongian said online sales made up around 8 percent of the company’s total sales. It aims to increase that figure to 15 percent by 2021.

Prior to the pandemic, he said, online sales made up no more than 0.1 percent of the company’s total sales.

“We’re trying to be a sustainable business by shifting our strategy to have an omnichannel presence, and this strategy will be adjacent to our offline retail stores,” he said during an online press conference.

The COVID-19 outbreak has brought about a consumer shift to digital platforms.

Read also: Retailers embrace consumers’ shift to online channels

According to the 2020 Global Consumer Insights Survey by PricewaterhouseCoopers, 69 percent of Indonesian respondents said they were buying more groceries online under COVID-19 social restrictions.

More than half of the respondents – 57 percent – said they would likely continue shopping online even after the restrictions were removed.

According to management consulting company Redseer, the number of Indonesian online shoppers grew to 85 million during the pandemic, up from 75 million before.

The virtual stores on Tokopedia will be available for consumers in the Greater Jakarta area, but the company will soon expand its area of service, Danny said.

One of the company’s supermarket chains, Hypermart, has also established its own online marketplace and has partnered with other e-commerce platforms to strengthen its online presence, he added. It also has maintained a social commerce platform through messaging service WhatsApp.

Danny said a digital transformation was necessary to counter the 40 to 60 percent decline in offline sales as a result of social distancing measures.

MPPA saw its revenue dwindle by 22.7 percent year-on-year (yoy) to Rp 5.1 trillion in the January-September period, down from Rp 6.6 trillion in the same period last year. It also suffered a loss of Rp 332.4 billion as of September, compared to its Rp 265.7 billion loss in the same period last year.

Danny said MPPA would maintain and expand its offline stores next year and would develop additional online channels.

“With all of our omnichannel efforts, offline sales are still higher than online sales, so we will continue to develop an online presence while maintaining our offline stores,” he said. “We are also planning to expand our offline stores, particularly in rolling out plans that were on pause this year, but we’re still keeping a lookout on the economic situation next year.”

Tokopedia corporate communications vice president Nuraini Razak said that by joining the e-commerce platform, MPPA would have the potential to reach Tokopedia’s more than 100 million users.

“The demand for groceries, especially food and beverages, rose sharply amid the pandemic, and I believe this trend will continue in the future,” she said.

Indonesia Retail Association (Aprindo) chairman Roy Nicholas Mandey said offline stores were still relevant for retailers, but they needed to have a more robust online presence and collaborate with e-commerce platforms even after the pandemic.

“This kind of collaboration can create more demand and accelerate digitalization, especially in this era of digital companies,” he said.

Read also: Offline retail still necessary amid e-commerce boom: Business

Roy added that physical stores were regaining demand as the potential for a vaccine added to consumer confidence in offline shopping. Indonesia received a shipment of 1.2 million doses of a COVID-19 vaccine produced by China's Sinovac Biotech on Dec. 6.

The Aprindo chairman quoted a recent survey by Bank Indonesia (BI) that showed that the consumer confidence index (IKK) had risen to 92 in November, up from 79 in October. An IKK value above 100 reflects general hopefulness, while a value below 100 signifies pessimism.

 

Editor's note: This article has been revised as MPPA corporate secretary and public relations director Danny Kojongian later corrected his statement and said that prior to the pandemic, online sales made up no more than 0.1 percent of the company’s total sales.