Traditional Markets Dominate Indonesia's Food Retail Sector, E-commerce Lags Far Behind

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Adi Ahdiat 24/07/2023 14:30 WIB

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Despite the trend of online shopping, traditional markets remain the center of retail sales for food, beverages, and daily necessities in Indonesia.

Retail Sales Value of Food/Beverages/Daily Necessities in Indonesia by Sales Channel (2022)

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Retail Sales Value of Food/Beverages/Daily Necessities in Indonesia by Sales Channel (2022)

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Despite the trend of online shopping, traditional markets remain the center of food, beverage, and grocery retail activity in Indonesia.

This is evident from the United States Department of Agriculture (USDA) report titled *Indonesia: Retail Foods*, July 2023 edition.

Based on Euromonitor data cited in the report, throughout 2022, the value of grocery retail sales in traditional markets across Indonesia reached USD 77.55 billion.

Meanwhile, the value of retail sales in similar categories in minimarkets, supermarkets, hypermarkets, and e-commerce was significantly lower, as shown in the graph above.

"Most customers of traditional markets are middle-to-lower income households. This retail channel accounts for approximately 77 percent of the total retail value of daily necessities in Indonesia," stated the USDA in its report.

According to the USDA, the main strength of traditional markets lies in their wider distribution and lower product prices compared to modern retail stores.

However, their growth rate is slower than that of minimarkets, supermarkets, hypermarkets, and e-commerce.

In 2022, the value of retail sales of food, beverages, and daily necessities in Indonesian traditional markets grew by 9.9% compared to 2021 (year-on-year/yoy).

In the same period, retail sales in similar categories in e-commerce grew significantly, reaching 47.5% (yoy).

Minimarket sales grew by 15.5% (yoy), supermarkets by 12.5% (yoy), but hypermarkets only grew by 4.9% (yoy).

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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Traditional Markets Dominate Indonesia's Food Retail Sector, E-commerce Lags Far Behind

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