Looking up for Opportunities of Thailand Food Products in Indonesia Market. Flora Chrisantie Deputy General Treasurer of APRINDO

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1 Looking up for Opportunities of Thailand Food Products in Indonesia Market Flora Chrisantie Deputy General Treasurer of APRINDO

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5 Indonesia Fact File Strategic geographic location and strong global presence Total land area Indonesia is around km² and sea area is around km² (BPS, Feb2012) Second biggest coastline in the world with km. (BPS, Feb 2012 ) and +/ Islands Estimated more than ,800 populations in June 2014 (BPS, 2015). The 4 th most populous country in the world

6 Indonesia Fact File Average population growth within : 1,4% (BPS, 2015) Dynamic and youthful population (+/- 53% < 29years old) (BPS, 2015) % Women, 50.25% Man (BPS, 2015) 46.7 % living in rural area and 53.3% in urban (prediction in 2015, BPS)

7 Indonesia Fact File Population distribution : Java 56,9%, Sumatera 21,6%, Sulawesi 7,3, Kalimantan 6,0%, Bali /Nusa Tenggara 5,5%, and Maluku/Papua 2,7% (BPS,2015) Estimates 30 millions Peoples have strong buying power 56.5% middle class income in 2010 (World Bank report, 2011; Bank Indonesia) GINI Index 0.41 (SUSENAS, 2012) 64% of GDP is contributed by domestic consumption which helps Indonesia to buffer external exposure Average expenditure for food per capita 47.19%, in which 12.46% is contributed by processed food (BPS, Sept 2013)

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9 Indonesia Fact File Rice as a main staple food 87% of Indonesian people are Moslem: Hallal & Thoyyiban Indonesian population consist of 480 ethnics Abundance of natural resources

10 Trade structure and trends

11 Create the second largest service based jobs in Indonesia and the largest contributor for economic growth 1.6 % out of 6% economic growth 20% of national employment

12 Create the second largest service based jobs in Indonesia and the largest contributor for economic growth

13 Indonesia Retail Sector Traditional Retail Market dominate 60% of market Modern Retail Market grew about 31.4% in 2015

14 2.67 million traditional store with almost one million new store built in last decade. Average 90,000 new store per year (ave. 5% annual growth) Nielsen Retail Establishment Census : Indonesia store universe

15 Traditional store spread is similar to population spread STORES BY REGIONS MAJOR CONTRIBUTORS WITHIN REGIONS 7% Pop BANDUNG GREATER (WEST JAVA) YOGYAKARTA GREATER (CENTRAL JAVA) 3.5% 1.0% 5% Pop 6% Pop SEMARANG GREATER (CENTRAL JAVA) 2.3% 9% Pop 15% Pop 11% Pop 15% Pop 16% Pop 5% Pop 7% Pop SURYABAYA GREATER (EAST JAVA) MEDAN (NORTH SUMATRA) MAKASAR GREATER (SULAWASI) 3.1% 0.8% 1.2% Source: Nielsen Rolling Retail Establishment Survey (RRES)

16 Its basically small stores in residential neighborhood SELLING AREA (IN SQM) HOW ARE THEY SERVICED STORE FACILITIES Less than 10 57% % % More than 41 1% Wholesalers 29% Self-purchase 85% Company Salesmen 21% Other Stores 10% Electric Cooler 17% Ice Cream Cabinet 2% Refrigerator 29% Standing Cabinet 87% Source: Nielsen Rolling Retail Establishment Survey (RRES)

17 Its basically small stores in residential neighborhood TYPE OF LOCATION TYPE OF STREET Residential Area Around/ Inside Market Main Street / Main Road Others Small street/ motor cycle way 1 way car 2 way car >2 way car Source: Nielsen Rolling Retail Establishment Survey (RRES)

18 Traditional store still the dominant channel Nielsen Retail Index: Trade Channel Contribution Total 56 Categories including cigarette 2014 Ave Annual Value growth 6-9% 15% 17.1% 24.9%

19 Traditional stores dominate commodity categories Nielsen Retail Index: Top General Trade Concentrated Categories Last 12 Mths

20 While modern store dominate modern living categories Nielsen Retail Index : Top Modern Trade Concentrated Categories Last 12 Mths

21 Traditional trade is still most frequently visited Frequency of visiting key trade channels (Times in Month) Hypermarket 4 24 Provision Supermarket 5 15 Wet market Minimarket 8 24 Vegetable Vendor Nielsen Shopper trend 2014

22 Total revenue retail (estimate) (grocery and non grocery) Grocery Trillion Non Grocery Trillion Total Trillion Source BPS 2010: Non Grocery : clothing footwear, electronic, appliance, H&B, Home Garden, Leisure, personal, Mixed, Others Est : Grocery annual growth 10%, Non Grocery Annual growth 7%)

23 Packaged food continues to enjoy robust value growth Double-digit value growth Tendency towards healthier food especially middle- and upper-class & urban residents Wider range of packaged food products frozen processed food, chilled processed food, dairy products & meal replacement products,

24 Thank You