Presented on Retail Supply Chain Summit, Jakarta, Indonesia on Oct 9th, 2015

1. The future of malls in Indonesia:
Where the shoppers will be?
By Jeffrey Bahar, Deputy CEO Spire Research and Consulting

2. COMPETITOR
ANALYSIS
BUSINESS
PARTNER
SELECTION
CORPORATE
SOCIAL
RESPONSIBILITY
CONSULTING
CHANNEL
HEALTH
MANAGEMENT
KNOWLEDGE
PROCESS
OUTSOURCING
GEO-
MARKETING
DECISION
ANALYTICS
CUSTOMER
VALUE
CO-CREATION
CONSULTING
MARKET
ENVIRONMENT
RESEARCH
MARKET SIZING
AND
FEASIBILITY
VALUE CHAIN
ANALYSIS
PRICE
RESEARCH
SUPPLY CHAIN
MANAGEMENT
CONSULTING
CUSTOMER
DECISION
DYNAMICS
ANALYSIS
COUNTRY
RESEARCH
CONSUMER
RESEARCH
CROSS-BORDER
CONSULTING
THOUGHT
LEADERSHIP
CONSULTING
ANTI-
COUNTERFEIT
CONSULTING
HOLISTIC MARKET
ENVIRONMENT RESEARCH
We are…

3. Table of contents:
ASEAN macro economic situation and retail growth
The development of modern retail in Indonesia
The incoming era of e-commerce
Case study: Online shoppers in Indonesia
Conclusion

4. ASEAN Macro Economic Situation and Retail Growth
The future of malls in Indonesia:
Where the shoppers will be?

5. Source: Worldbank, Bank of Indonesia, Indonesia Bureau of Statistics, Euromonitor
ASEAN Macro Economic Situation
5.0
0.7
6.0
6.0
2.9
6.1
Middle Class Income Growth 2012 - 2020
Malaysia Indonesia
Thailand Singapore
Philippines
18% 174%
72%
39% 10%

6. Source: CEICdata, Bank of Indonesia, Economist Intelligence Unit
82,554
87,939
93,295
106,831
123,451
336,557
335,024
328,268
376,877
468,809
117,445
118,471
114,692
119,811
129,414
39,385
40,760
43,573
46,443
49,769
60,525
66,452
75,606
85,371
96,909
110,918
118,608
124,748
138,803
151,781
2012
2013
2014*
2015*
2016*
Retail sales in several countries in ASEAN (US$ million)
Philippines
Vietnam
Singapore
Thailand
Indonesia
Malaysia
ASEAN Macro Economic Situation:
Retail Sales

7. Source: Economist Intelligence Unit, Indonesian Retail Merchants Association (APRINDO), Indonesia Bureau of Statistics
3.5 4.3 4.3 4.3 4.8 4.7
2011 2012 2013 2014 2015 2016
Food, Beverage &
Tobacco
Indonesia Modern Retail Revenue Growth and Retail
Sales Based on Type of Product
6.1
6.7 6.8
7.2 7.2 7.2
2011 2012 2013 2014 2015 2016
Fashion & Apparel
7.8 8.4 9.3 9.6 9.6 10
2011 2012 2013 2014 2015 2016
Consumer Goods
7.9
11.3 9.3 9.7 9.8 9.7
2011 2012 2013 2014 2015 2016
Electrical Appliances &
Housewares
9.5
13.7
11.3 11.2 10.7 10.2
2011 2012 2013 2014 2015 2016
Household Audio & Video
Equipment6.2 6 5.6 5 4.8
20
12.5
10 9.5
8
2011 2012 2013 2014 2015*
Indonesia GDP and Modern Retail
Revenue Growth
GDP Growth (%) Modern Retail Revenue Growth (%)

8. The Development of Modern Retail in Indonesia
The future of malls in Indonesia:
Where the shoppers will be?

9. 20
5
75
22
10
65
22 22
56
Hyper/Supermarket Minimarket Traditional Grocery
Retail Trade Share (%)
2002 2007 2012
Source: Indonesian Commercial Newsletter
Spread of Modern Retail in Indonesia 2010 (%)
DKI Jakarta
38.1%
Sumatera
8.2%
West Java
14.08%
Central Java
10.2%
East Java
12.12%
Modern Retail Development and Spread

10. Jakarta: The City of Malls
21.7
11.3
20
21.5
17.5
8.1
Jakarta Retail Supply by District 1Q 2015
CBD
Central
North
South
West
East
Source: Cushman & Wakefield, Lamudi
3,505 3,560 3,824 3,984 4,015 3,985
2,790 2,884 3,113 3,327 3,424 3,406
2010 2011 2012 2013 2014 Q1 2015
Retail Space Supply and Demand in Jakarta
Cumulative Supply ('000 sqm) Cumulative Demand ('000 sqm)
4 million m²
retail space
= 6x
Singapore
173 Malls
(World’s most malls per city*)

11. Mall Kelapa Gading
147,000 m²
North Jakarta
2.9 million visitor per month
Grand Indonesia
130,000 m²
Central Jakarta
1.8 million visitor per month
Kota Kasablanka
195,000 m²
South Jakarta
2 million visitor per month
Gandaria City
93,840 m²
South Jakarta
1.8 million visitor per month
Central Park
125,626 m²
West Jakarta
2.9 million visitor per month
P
o
p
u
l
a
r
M
a
l
l
s
i
n
J
a
k
a
r
t
a
Aeon Mall
185,000 m²
Tangerang, West Java
1.2 million visitor per month
S
o
u
r
c
e
:
m
a
r
k
e
t
i
n
g
.
c
o
.
i
d

12. What are their
secrets?

13. “Good access
and location”

14. “Size does
matter”

15. “Well-
matched
anchor client
& targeted
visitor”

16. “Bring up new and
fresh ideas”

17. The Incoming Era of e-Commerce
The future of malls in Indonesia:
Where the shoppers will be?

18. 42.2
55.2
61.1
74.6
83.6
93.4
102.8
8 13.8 24.2 31.7 37.62 45.36 53.66
18.98
24.99
39.62 42.49 45.15
48.56
52.2
2010 2011 2012 2013 2014 2015 2016
Indonesia Internet User & Growth
Internet User (million) Netizens (in million)
Netizens Proportion (%)
Source: Tech in Asia, eMarketer, Spire Analysis
The Growth of Internet in South East Asia
20.1 74.6 17.6 9.1 32.4 34.8
67
29.8
26.4
104.2
36 34.8
Malaysia Indonesia Thailand Singapore Vietnam Philippines
Internet Users in South East Asia (2013)
Internet Users (in million) Internet Penetration (%)

19. 20%
Conventional
online shopping
sites
26.4
%
Social media
platform
26.6
%
Online forums or
classified sites
27%Messenger
groups
2013
335
1.8
2014
328
2.6
2015
377
3.56
2016
469
4.49
2015
2014
2016
2013
4.6
million
5.9
million
7.4
million
8.7
million
Growth of Online Shoppers in Indonesia (million users)
E-commerce Development in Indonesia
Preferred e-commerce Channel for
Online Shopping
Source: Tech in Asia, Statista, Economist Intelligence Unit
Online Sales vs Retail Sales in Indonesia (billion US$)
Percentage of online sales in total retail sales Retail Sales Online sales
0.6% 0.8% 0.9% 1%

20. Case Study: Online shoppers in Indonesia
The future of malls in Indonesia:
Where the shoppers will be?

21. Who Shops Online?
99%Have shops online before
vs
80%
Who shops more often?
Slightly
often
Very
often
Shops more efficiently? 7/10 4/10
Source: Spire Online Survey
11.36%
6.82%
29.55%
51.14%
1.14%
0.10%
41-50 years old
35-40 years old
28-34 years old
21-27 years old
16-20 years old
< 15 years old
Shoppers Age Breakdown

22. 15%
18%
20.5%
22%
Things people buy online
Source: Spire Online Survey
Beauty
Products 12%
Sports
Equipment 4%
Automotive
Accessories 4%
Health
Supplement 4%
Books
Fashion Products
Electronics &
Gadget
Gaming Products

23. Free shipping
Exclusive items / deals
Product warranty
Safe and simple payment methods
Turn on vs Turn off While Shopping Online
Source: Spire Online Survey
Trust issue on product quality
No hands on experience before
buying
High shipping cost and slow delivery
time
Unreliable payment method
Mostly expressed by female shopper

24. Solution
Combine the best of online and
offline world
Increase the profit in both world
Source: Spire Online Survey
User Offline
Business
Link the online and offline
Demand Value
Offline Online Ultimate
The O2O Cycle
Create the ultimate hands on experience
Improve quality and monitor your online
reviews
Support “buy online and pick up at a store”
or vice versa

25. Conclusion
The future of malls in Indonesia:
Where the shoppers will be?

26. Retailers are challenged by the growth of e-commerce
Solution: Create a mutualism with e-commerce in form of O2O model, utilizing
both channels in order to maximize profit.
Urbanite lifestyle changing people’s purpose in going to malls
Solution: Urbanite the malls. Mold the malls into a place that can be
appreciated by the time-poor, city-proud, media-literate, brand-centric,
trend-sensitive, culturally-aware people of Jakarta.
High market saturation (173 malls)
Solution: Need to find a sustainable “wow” factor that could be used for a long
run.

27. Tel: (62) 5794 5800
Fax: (62) 5794 5808
Wisma 46, Kota BNI 25th Floor,
Unit #08-10
Jakarta 10220
indonesia.info@spireresearch.com
www.spireresearch.com