Electronics and Appliance Specialist Retailers in

Indonesia
Category Briefing | 24 Apr 2014

HEADLINES

Electronics and appliance specialist retailers reaches value of Rp148.2 trillion in 2013, up

18% from 2012

Rising electricity costs toned down the dynamic growth of electronics and appliance

specialist retailers in 2013

Electronic Solution Indonesia PT, with a 2% share, is the leader in an otherwise

fragmented channel
Electronics and appliance specialist retailers is expected to see a robust constant value
CAGR of 7% over the forecast period

TRENDS

Electronics and appliance specialist retailers saw further dynamic current value growth,
registering 18% growth in 2013. Nonetheless, the growth was slower compared to the previous
year, where the electronics and appliance specialist retailers posted 22% current value growth in
2012. Despite its continuous growing market, the growth of electronic and appliance specialist
retailers in 2013 was toned down as a result of rising electricity costs in early 2013. Under the
Ministry of Energy and Mineral Resources Regulation No 30 Year 2012 about Electricity Costs,the
Indonesian government applies a gradual 4.3% increase in electricity cost per quarter of 2013.
The new regulation especially applies to private households or commercial properties with
electricity subscriptions above 1,300 Volt Amperes. As a result, many consumers reconsider their

decision to purchase new electronics and appliances, due to the increasing cost of electricity.
Electronic and appliance specialist retailers witnesses moderate outlet growth of 3% in
2013, with 198 new stores established within the year. Independent traditional retailers remained
the majority of the outlets, with chained modern retailers express rising growth through
expanding their outlets in shopping malls, hence higher brand awareness and shopping

convenience.
The types of stores within electronics and appliance specialist retailers are mainly
communication device stores and one-stop-shopping solutions for electronics and appliances.
Erajaya Swasembada with Erafone and Trikomsel Oke with Okeshop are the two largest
companies among electronics and appliance specialist retailers selling a collection of
communication devices and accessories, such as cell phones, smartphones, simcards and many
more. Leading companies belonging to the latter categories are Electronic Solution, Electronic

City and Best Denki, providing a broad range of electronics and appliances.
Aside from the leading retailers, most of the electronics and appliance specialist retailers
are independent ones. Those stores are generally in stand-alone format, located in smaller cities
nationwide, where the modern ones have little or no presence. The existence of independent
retailers in bigger cities was gradually eroded by the rising popularity of modern retailers, as they
were able to provide broader rangesof products at more competitive prices.

Most of the chained leading companies within electronics and appliance specialist
retailers implemented aggressive store expansion, to capture the growing middle-income
consumers, which are the emerging targeted audience of the leading electronics and appliance
specialist retailers. The prominent retailers, such as Electronic City, Oke Shop and Global Teleshop
established more than 30 outlets in 2013. The expansion of those companies remained
concentrated in Java as the countrys commercial hub, while also starting to extend their

presence to smaller cities on other islands.

The market of electronic and appliance specialist retailers also follows seasonal trends.
The sales usually peak during the second week of Ramadan or fasting month, prior to Hari Raya
Idul Fitri, the most celebrated holiday in Indonesia. Within this period, most companies are
generally giving their employees Tunjangan Hari Raya (Religious Holiday Allowances where the
employers give their staffa bonus equal to one months salary). Having higher disposable income,
consumers then increase their spending on home appliances. Ovens and refrigerators are among
the best-selling home appliances during such period, as they are used to make cookies for
celebrating the festivities. Washing machines are also among the best-sellers, as housemaids are
absent for one to two weeks during Hari Raya Idul Fitri. According to trade sources, washing
machines remained the most popular home appliances product in 2013, followed by air

conditioners and refrigerators.

Electronic Solution PT and Graha Sudirman Centre PT remained the two leading
companies within electronics and appliance specialist retailers in 2013, with their respective
flagship brands Electronic Solution and Electronic City. Both company excel as one-stop shopping
solution for electronic products, providing broad range of appliances, cellphones, laptops and
many othes. To encourage more consumer purchase, Electronic Solution offers 0% instalment

payments up to 24 months, free credit card charges, delivery and an installation service.
Among the dynamic growth of most leading electronics and appliance specialist retailers,
Agis Electronics Superstore posted negative growth in 2013. The company witnessed diminishing
performance up to the end of the review period, despite being one of the largest retailers in
electronics prior to the review period. With the closure of other remaining stores up to 2011, the

company currently only has one outlet remaining and is unlikely to expand its stores.
Electronic and appliance specialist retailers is expected to see a robust constant value
CAGR of 7% over the forecast period, thanks to the increasing usage of smartphones.
Smartphones, especially Blackberry, are getting increasingly popular among middle-class
consumers. Affordable smartphones and tablets with a price lower than Rp1 million are also
available, tapping into the lower-middle-income demographic. Other electronic products, such as
liquid crystal display (LCD) and light-emitting diode (LED) televisionsare also predicted to enjoy

increasing popularity among middle-class and above, following the shift from tube television.
The growth constraints on electronics and appliance specialist retailers come from other
channels, such as hypermarkets and internet retailing. Hypermarkets also sell various brands of
electronics and appliances, including low-priced imported products, hence appealing to the low
and lower-middle income class. The threat also comes from emerging popularity of internet
retailing, where notable sellers such as Bhinneka, Rakuten and Lazada gained increasing
consumer trust. Facing this challenge, some retailers such as Hartono Elektronika also provide
online services, allowing consumers to choose from its range of electronics and appliance

products then have them delivered to their home. This action is expected to be followed by other

leading retailers, in order to maintain their competitive edge within the market.
Instalment payments remained the most popular credit facility offered by electronics and
appliance specialist retailers to induce more consumer purchases. This credit facility helps to
lessen consumers burden by paying for their purchases in instalments through selected
prominent banksover a period of up to 24-months. Despite the given discount for cash payments,
the majority of consumers chose to pay in instalments for more stable monthly financial
management. Some retailers, such as Hartono Elektronika and Electronic Solution, also offer 0%interest instalments.
hart 2 Electronics and Appliance Specialist Retailers: Agis Electronic in Jakarta

Source: Euromonitor International

CHANNEL DATA
Table 1 Electronics and Appliance Specialist Retailers: Value Sales, Outlets and Selling
Space 2008-2013

2008

2009

2010

2011

2012

2013

Value sales Rp billion

61,547.9 65,240.8 75,679.3 102,923.8 125,567.1 148,169.1

Outlets

5,770.0

6,001.0

6,211.0

6,622.0

6,827.0

7,134.0

Selling Space '000 sq m

2,680.1

2,800.7

2,912.7

3,120.4

3,232.5

3,394.1

Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 2 Electronics and Appliance Specialist Retailers: Value Sales, Outlets and Selling
Space: % Growth 2008-2013

% growth

2012/13

2008-13 CAGR

2008/13 TOTAL

Value sales Rp billion

18.0

19.2

140.7

Outlets

4.5

4.3

23.6

Selling Space '000 sq m

5.0

4.8

26.6

% growth

2012/13

2008-13 CAGR

2008/13 TOTAL

Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 3 Electronics and Appliance Specialist Retailers Company Shares: % Value 20092013

% retail value rsp excl sales tax

2009

2010

2011

2012

2013

Electronic Solution Indonesia PT

1.1

1.4

1.3

1.5

1.7

Graha Sudirman Centre PT

1.0

1.1

1.1

1.1

1.4

PT Trikomsel Oke Tbk

2.0

1.7

1.5

1.2

1.2

Erajaya Swasembada Tbk PT

0.2

0.2

0.2

0.4

1.1

Best Denki Indonesia PT

0.7

0.6

0.6

0.6

Global Teleshop Tbk PT

0.4

0.3

0.4

Hartono Elektronika PT

0.3

0.3

0.3

0.3

0.3

Wihisindo Jaya Sukses PT

0.1

0.0

0.0

0.0

0.0

Agis Electronic PT

0.1

0.0

0.0

0.0

0.0

Others

95.3

94.6

94.5

94.5

93.4

Total

100.0

100.0

100.0

100.0

100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 4 Electronics and Appliance Specialist Retailers Brand Shares: % Value 20102013

% retail value rsp excl sales

tax

Company

2010

2011

2012

2013

% retail value rsp excl sales

tax

Company

2010

2011

2012

2013

Electronic Solution

Electronic Solution Indonesia

PT

1.4

1.3

1.5

1.7

Electronic City

Graha Sudirman Centre PT

1.1

1.1

1.1

1.4

Oke Shop

PT Trikomsel Oke Tbk

1.7

1.5

1.2

1.2

iBox

Erajaya Swasembada Tbk PT

0.1

0.7

Best Denki

Best Denki Indonesia PT

0.7

0.6

0.6

0.6

Global Teleshop

Global Teleshop Tbk PT

0.4

0.3

0.4

Erafone

Erajaya Swasembada Tbk PT

0.2

0.2

0.3

0.3

Hartono Elektronika

Hartono Elektronika PT

0.3

0.3

0.3

0.3

Erafone Megastore

Erajaya Swasembada Tbk PT

0.0

0.0

0.0

Audio Plaza

Wihisindo Jaya Sukses PT

0.0

0.0

0.0

0.0

Agis Electronic Superstore

Agis Electronic PT

0.0

0.0

0.0

0.0

Others

Others

94.6

94.5

94.5

93.4

Total

100.
0

100.
0

100.
0

100.
0

Total

Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 5 Electronics and Appliance Specialist Retailers Brand Shares: Outlets 20102013

sites/outlets

Company

2010

2011

2012

2013

Oke Shop

PT Trikomsel Oke Tbk

808.0

860.0

707.0

750.0

Global Teleshop

Global Teleshop Tbk PT

172.0

151.0

201.0

Erafone

Erajaya Swasembada Tbk PT

75.0

92.0

123.0

150.0

sites/outlets

Company

2010

2011

2012

2013

iBox

Erajaya Swasembada Tbk PT

21.0

56.0

Electronic City

Graha Sudirman Centre PT

9.0

11.0

23.0

53.0

Electronic Solution

Electronic Solution Indonesia

PT

20.0

27.0

40.0

50.0

Best Denki

Best Denki Indonesia PT

6.0

9.0

15.0

18.0

Erafone Megastore

Erajaya Swasembada Tbk PT

2.0

7.0

13.0

Hartono Elektronika

Hartono Elektronika PT

6.0

7.0

7.0

8.0

Audio Plaza

Wihisindo Jaya Sukses PT

3.0

3.0

3.0

3.0

Agis Electronic
Superstore

Agis Electronic PT

4.0

1.0

1.0

1.0

Others

5,280.
0

5,438.
0

5,729.
0

5,831.
0

Total

6,211.
0

6,622.
0

6,827.
0

7,134.
0

Others

Total

Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 6 Electronics and Appliance Specialist Retailers Brand Shares: Selling Space
2010-2013

surface area '000 sq m

Company

2010

2011

2012

2013

Electronic City

Graha Sudirman Centre PT

26.5

28.4

56.8

127.7

Electronic Solution

Electronic Solution Indonesia

PT

47.9

64.6

95.6

120.5

Best Denki

Best Denki Indonesia PT

18.0

25.9

39.4

43.2

Oke Shop

PT Trikomsel Oke Tbk

42.1

44.2

35.3

35.3

Hartono Elektronika

Hartono Elektronika PT

9.0

10.5

10.5

12.0

surface area '000 sq m

Company

2010

2011

2012

2013

Global Teleshop

Global Teleshop Tbk PT

8.6

7.6

10.1

Erafone

Erajaya Swasembada Tbk PT

4.1

5.1

6.8

8.2

Erafone Megastore

Erajaya Swasembada Tbk PT

0.6

1.8

3.6

iBox

Erajaya Swasembada Tbk PT

1.3

3.4

Audio Plaza

Wihisindo Jaya Sukses PT

2.9

2.9

2.9

2.9

Agis Electronic
Superstore

Agis Electronic PT

3.5

2.0

2.0

2.0

Others

Others

2,758.
8

2,927.
6

2,972.
5

3,025.
1

Total

Total

2,912.
7

3,120.
4

3,232.
5

3,394.
1

Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 7 Electronics and Appliance Specialist Retailers Forecasts: Value Sales, Outlets
and Selling Space 2013-2018

2013

2014

2015

2016

2017

2018

Value sales Rp billion

148,169.
1

161,504.
4

174,424.
7

186,634.
4

197,832.
5

207,724.
1

Outlets

7,134.0

7,348.0

7,554.0

7,750.0

7,937.0

8,112.0

Selling Space '000 sq

m

3,394.1

3,508.1

3,618.3

3,723.2

3,823.4

3,917.4

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Note: Forecast value data in constant terms

Table 8 Electronics and Appliance Specialist Retailers Forecasts: Value Sales, Outlets
and Selling Space: % Growth 2013-2018

% growth

2017/18

2013-18 CAGR

2013/18 TOTAL

Value sales Rp billion

5.0

7.0

40.2

Outlets

2.2

2.6

13.7

Selling Space '000 sq m

2.5

2.9

15.4

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources