Big Retailers Start To Explore Small Shop Concept

Illustration. (Photo: Lippo Malls)

JAKARTA - Currently, large retailers are starting to experiment with the concept of small shops. It is also supported by online sales to reach out to millennial buyers who prefer a personal experience.

"The occupancy rate (malls / shopping centers) has decreased because the retail format has begun to move towards a smaller direction," said Senior Associate Director of Colliers International Indonesia, Ferry Salanto in Jakarta, Thursday, January 9.

According to this property consultant, the phenomenon of many large-sized outlets or stores closing down from a number of large retailers in 2019 is likely to continue in 2020 if they do not adapt.

Moreover, he reminded that current market conditions are more driven by millennials and buyer behavior which tends to change. Colliers' research suggests that the retail market has been fragmented for a long time, so retailers are looking for a more consolidated and comprehensive model.

Previously, a researcher at the Center for Economic Research, the Indonesian Research Institute (LIPI), Nika Pranata, launched the results of research on online sellers and buyers in Indonesia, one of which explores the reasons Indonesians like to shop for imported products online.

"There are two reasons, first is the product is rare or not available in Indonesia and secondly the price is cheap," said Nika.

Nika explained that the results of the study were obtained from a survey conducted on 1,626 respondents consisting of 820 online buyers and 806 online sellers in Java, Riau Islands, West Java, and North Sulawesi.

From the buyer side, there are three digital platforms that are most often used by online buyers from Indonesia, namely Alibaba and Aliexpress from China, and Amazon from the United States.

According to Nika, most Indonesian buyers use the platform to shop for electronic equipment such as cell phones, cameras, laptops and computers. Apart from that, electronic accessory products, namely audio, printers, data storage, to cellphone accessories are also in great demand.

He added, based on field findings, almost all Indonesian online sellers stated that this practice was reducing their sales and threatening the sustainability of their business.

"Based on data from the Ministry of Industry, 90 percent of goods sold online are imported products. Well, this makes the competition even tighter, "said Nika.

Nika said that currently the world is entering an era of borderless trade, the movement of goods and services is very easy. As a result, imports of goods through e-commerce have increased sharply.

Previously, former Trade Minister Enggartiasto Lukita said that exports made through an online platform would be able to save the Indonesian economy amid the current global economic uncertainty.

"One thing is for sure, we will be able to survive what seems small but if we do it together, namely selling (exports) via online, this will really help," he said some time ago.

According to Enggar, currently Indonesia is competing with the rest of the world to seize the existing market. However, the traditional method is no longer relevant to use because it takes a long time.