Immense potential in Indonesia's mass grocery retail sector

With its vast size and the currently low levels of penetration, Indonesia has emerged as one of the rapidly growing food and drinks industry in the South East Asia. Various factors, such as economic growth, increasing urbanization, young affluent population, and numerous regional food health and safety concerns have led to a surge in the industry. Increasing health awareness and safety concerns among Indonesian consumers have further propelled the segment. Considering the growth potential, numerous domestic and international players have set up their facilities in a move to penetrate the flourishing market.

Notably, mass grocery retail (MGR) has very strong long-term potential in Indonesia. As the Indonesian economy has developed, so has demand for MGR. Delhaize, a Belgium-based international MGR operator, recently announced plans to triple its expansion efforts in Indonesia. While the retailer experienced solid growth in its home market, it was emerging markets that really helped boost results, with year-on-year revenue growth of 15.5% in Indonesia. French retailer Carrefour has also been expanding rapidly through its local subsidiary and is now the leading foreign MGR operator in the country. Indonesia's MGR sector is forecast to rise 57.7% in sales to US$10.44 billion by 2014.