Indonesia Retail Report Q1 2013Published by: Business Monitor International Published: Nov. 21, 2012 - 86 Pages Table of Contents
AbstractThe Indonesian Retail Report examines the long-term potential of the local consumer market, but flagsshort-term concerns about the impact on Indonesia's economic outlook of inflationary pressures.The report examines how best to maximise returns in the Indonesian retail market while minimisinginvestment risk, and also explores the impact of the evolving eurozone debt crisis, a hard landing in Chinaas well as tepid growth in the US and Japan on the Indonesian consumer and on the ability of producersand exporters to realise returns in the short term. The report also analyses the growth and risk management strategies being employed by the leadingplayers in the Indonesian retail sector, as they seek to maximise the growth opportunities offered by thelocal market. Indonesia comes fifth out of seven in BMI's Asia Retail risk/reward ratings, although it outperformsslightly for rewards. Among all retail categories, Mass Grocery Retail (MGR) will be the outperformer through to 2017 ingrowth terms, with sales forecast to increase by 69.7% between 2013 and 2017, from US$42.41bn toUS$71.97bn as the large population is tempted by certain aspects of modern retailing such as privatelabelling, price promotions and bulk selling. In the competitive arena, BMI sees upside potential in the government's interference in hypermarketplanning, which should encourage growth in the medium-sized supermarket sector and the conveniencesector. Over the last quarter, BMI has revised the following forecasts and views: The Indonesian economy's strong H112 performance has led BMI to upgrade its 2012 GDPforecast to 6.0% from 5.4%. However, we believe that signs of overheating as a result of BankIndonesia (BI)'s easy monetary policy are beginning to emerge, a phenomenon that will begin tounwind as we move into 2013. This, combined with declining external demand and achallenging outlook for commodities, has led us to downgrade materially our 2013 GDP forecastto 5.6% from 6.4% previously in line with slowing investment growth. Still, we note that evenwith this downgrade, we expect Indonesia to remain a regional outperformer. Despite the resilient strength of the Indonesian consumer, BMI sees scope for a temperedslowdown in private consumption in 2013 as well. Indeed, indicators such as consumption goodsimports (0.3% y-o-y in July versus 6.8% in June) and overall consumer lending (19.1% in Julyversus a cyclical peak of 26.1% in November, 2011) suggest that the consumer's surge mayalready be moderating. Beyond the BI-led credit tightening, the considerable slowdown ininvestment activity is also likely to have knock-on effects for the Indonesian consumer, as hasbeen the case in the past. For this reason, we have downgraded our 2013 private consumptionforecast to 5.5% from 5.9% previously, and caution that risks are weighted to the downside. Get full details about this report >> |
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