Writer: Charisiotto Van
Food retail in Indonesia has proliferated; where according to Statista, the revenue of the food market in Indonesia was up to USD 200 million in 2017 and estimated to reached over of USD 277 million in 2022. In 2020, Indonesia also ranked 4th in the total consumer spending on food & non-alcoholic beverages in Asia, spending more than USD 233 million. However, the COVID-19 pandemic has negatively impacted various sectors in Indonesia but not the food and beverage business.
Since March 2020 – when the government initially declared that COVID-19 is a pandemic and enacted public social restrictions – platforms that work in the food and beverage business with online meal delivery services have been surviving and expanding with greater profits than in the past. The analysis indicates that the average income from the online meal delivery business has increased to about USD 58 million by 2021, up from just USD 51 million in 2017. The presence of large companies that provide an online food delivery platform makes food and beverage businesses in Indonesia still able to survive during the pandemic.
Online Retail Delivery Service
Gojek (78%) and Grab (71%) continue to dominate the top two positions for apps with the most platform users in the online retail market due to the all-in-one platform app that enables users to do anything (send package, purchase credit, top up, etc). People utilize one-stop applications because they perceive them to be more straightforward, versatile, and efficient. In addition to Grab and Gojek, other retail startups contribute to the growth of the retail industry, including Kedaimart, Sayurbox, Luxefood, Tanihub, and the online service for Hypermart. These companies provide online retail focusing on fresh goods such as vegetables, fruits, meat and others. Besides the development of the food and beverage sector, the retail industry also continues to survive and thrive even though it was in quite a problematic situation. the reason that keeps it afloat is that retailers serve or provide goods that become people’s daily needs.
Big Retail Industries in Indonesia
Behind the most influential online platforms for online delivery service for retail store, Transmart/Carrefour, Hypermart, and Super Indo are the three largest hypermarket businesses in the Indonesian retail industry. Transmart in 2021 has the highest revenue of more than USD 1 billion. Taking second place, Hypermart has a gain of USD 455 million, and following not far behind in third place is Super Indo, with a revenue of USD 432.5 million.
Amid a pandemic and economic crisis, the government encourages retail companies to work with SMEs to create new value opportunities. The retail sector is an essential supporter of SMEs in Indonesia in selling their products. The government also plays a role in providing a stimulus to restore declining economic conditions by focusing on paving SME products into the retail trade sector chain. During the COVID-19 coronavirus pandemic, the NielsenIQ survey agency found that retail food sales in Indonesia rebounded the quickest compared to other categories of fast-moving consumer goods (FMCG). This is evident from the growth of food retail which only contracted 1% annually in April 2021.
Opportunities and Advantages of the Food Retail Industry
Judging from the significant developments in the food retail industry, it is certain that Indonesia has become a promising place for the food retail industry and the potential of this industry can be explored and utilized even more. For example, the inclusion of micro and small retailers (warung/kiosk) into the digital distribution ecosystem of goods or food products.
Each year, Indonesia’s Gross Domestic Product (GDP) from the manufacture of food products and beverages in Indonesia has consistently improved. In the first quarter of 2022, the food and beverage industry contributed more than a third, or 37.77%, of the GDP of the non-oil and gas processing industry.
With the increase in GDP in the food manufacturing sector, indirectly, the distribution of food products to the retail industry will continue to be available and supplied. To promote the expansion of the food and beverage industry, the Ministry of Industry continues to enable the promotion of food and beverage industry products through domestic and international exhibitions. It is anticipated that Indonesia’s G20 Presidency in 2022 will increase the export market for national industrial products, especially food and beverage products.