Food retail industry in Indonesia - statistics & facts
The food retail industry in Indonesia is one of the largest in the Asia Pacific region, with retail sales values steadily increasing in the last few years. This industry encompasses food products sold by both modern and traditional grocery retailers. In 2023, there were approximately four million grocery retail outlets across the country.
Another significant shift that is worth noting in the food retail industry is the shift in consumer attitudes towards food. Indonesian consumers are becoming more environmentally responsible and health conscious. This has been shaping the current food trends among consumers in Indonesia, which, in turn, influences their purchase preferences. A recent study revealed current consumers’ top criteria for purchasing food in Indonesia included fresh and natural ingredients.
Indonesia’s food retail market in changing, with traditional stores holding strong while modern and online platforms continue to grow. As urbanization continues and consumer preferences evolve, the industry is poised for significant growth. The future offers promising opportunities for businesses ready to adapt to these evolving trends.
A shift in the retailing ecosystem and consumer preferences
The COVID-19 pandemic has reshaped the food retail industry in Indonesia by introducing a new environment that enables digital innovations and operational changes within the industry. Unprecedented demand for online shopping and food delivery due to social restrictions during the pandemic has had a lasting impact on the structure of the retail ecosystem. Even though offline retailers remain the key purchase channels for groceries in Indonesia, online retailers have seen an increasing revenue share in the Indonesian food market in the last few years. The positive development in the revenue of the online grocery delivery market in the country indicates the growing popularity of this grocery shopping method. In addition, the number of online grocery delivery service users in Indonesia is expected to continue to increase in the next year, pointing to a favorable prospect of the market. a favorable prospect of the market.Another significant shift that is worth noting in the food retail industry is the shift in consumer attitudes towards food. Indonesian consumers are becoming more environmentally responsible and health conscious. This has been shaping the current food trends among consumers in Indonesia, which, in turn, influences their purchase preferences. A recent study revealed current consumers’ top criteria for purchasing food in Indonesia included fresh and natural ingredients.
The distribution channel structure
In terms of distribution channels, traditional grocery retailers continue to dominate the market. This has been the preferred food retail channel for many Indonesians, especially those living in rural areas, due to its accessibility. Modern and online grocery retailers may face significant challenges to their supply chains when serving the rural areas and outlying islands in Indonesia. However, in urban areas and on Indonesia’s larger, more populous, and well-connected islands, such as Java, modern and online grocery retailers can thrive. Traditional retailers may consequently see their market share in such areas decline. Increasing urbanization in the country could contribute to significant changes in the future distribution channel structure of its food retail industry.Indonesia’s food retail market in changing, with traditional stores holding strong while modern and online platforms continue to grow. As urbanization continues and consumer preferences evolve, the industry is poised for significant growth. The future offers promising opportunities for businesses ready to adapt to these evolving trends.
