Minimarkets are booming in Indonesia with rapidly-growing customer bases grow faster.

According to the data from the Indonesian retail employees association Aprindo, the number of minimarkets in Indonesia increased 63 per cent to 16,720 in 2011 from 10,289 just three years earlier. On the contrary, the number of supermarkets decreased 17 per cent to 1229 in 2011 from 1477 stores in 2008.

In Indonesia, an archipelago, logistics pose a challenge. However, minimarkets have overcome these difficulties by supplying streamlined product ranges to 200-400 outlets from a central warehouse, says Aprindo vice chairman Tutum Rahanta.

“The future for Indonesian retailers is the minimarket because we live in an island nation. It’s a story of how the small slowly eat up the big players’ cake because they rapidly grow in local communities,” said Rahanta.

Cheaper prices are also a big appeal drawing consumers into minimarkets.

Ramayana, a supermarket and department store retailer in Indonesia, said their supermarkets are now money-losing business.

“Our worst enemy is the minimarket. We are under siege in the Greater Jakarta area and in Surabaya. Some of their products are even cheaper than ours,” said Ramayana director Setyadi Surya.

Supermarket retailers are trying to counteract the burgeoning of minimarkets by seeking strong international partners that will aid them financially to expand business or to diversify into other areas.

GB