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Indonesia Retail Report Q1 2013 - New Market Research Report

New Retailing research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 01/22/2013 -- The Indonesian Retail Report examines the long-term potential of the local consumer market, but flags short-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 minimising investment risk, and also explores the impact of the evolving eurozone debt crisis, a hard landing in China as well as tepid growth in the US and Japan on the Indonesian consumer and on the ability of producers and exporters to realise returns in the short term.

The report also analyses the growth and risk management strategies being employed by the leading players in the Indonesian retail sector, as they seek to maximise the growth opportunities offered by the local market.

View Full Report Details and Table of Contents

Indonesia comes fifth out of seven in BMI's Asia Retail risk/reward ratings, although it outperforms slightly for rewards.

Among all retail categories, Mass Grocery Retail (MGR) will be the outperformer through to 2017 in growth terms, with sales forecast to increase by 69.7% between 2013 and 2017, from US$42.41bn to US$71.97bn as the large population is tempted by certain aspects of modern retailing such as private labelling, price promotions and bulk selling.

In the competitive arena, BMI sees upside potential in the government's interference in hypermarket planning, which should encourage growth in the medium-sized supermarket sector and the convenience sector.

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 GDP forecast to 6.0% from 5.4%. However, we believe that signs of overheating as a result of Bank Indonesia (BI)'s easy monetary policy are beginning to emerge, a phenomenon that will begin to unwind as we move into 2013. This, combined with declining external demand and a challenging outlook for commodities, has led us to downgrade materially our 2013 GDP forecast to 5.6% from 6.4% previously in line with slowing investment growth. Still, we note that even with this downgrade, we expect Indonesia to remain a regional outperformer.
- Despite the resilient strength of the Indonesian consumer, BMI sees scope for a tempered slowdown in private consumption in 2013 as well. Indeed, indicators such as consumption goods imports (0.3% y-o-y in July versus 6.8% in June) and overall consumer lending (19.1% in July versus a cyclical peak of 26.1% in November, 2011) suggest that the consumer's surge may already be moderating. Beyond the BI-led credit tightening, the considerable slowdown in investment activity is also likely to have knock-on effects for the Indonesian consumer, as has been the case in the past. For this reason, we have downgraded our 2013 private consumption forecast to 5.5% from 5.9% previously, and caution that risks are weighted to the downside.

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