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Most analysts agree the first semester of 2006 was a period
of adaptation for retail businesses following the previous semester's
fuel price increases, which weakened the people's purchasing power.
However, there was no such setback in sales of consumer goods, which --
modern and traditional markets combined -- grew by 10 percent in the
first half of the year, according to the latest research by AC Nielsen.
"Compared to last year's first semester, the total sales of consumer
goods in the first semester rose by 10 percent. I estimate that by the
end of 2006, we will see growth of at least 15 percent," said AC
Nielsen retailer and business development director Yongky Surya Susilo
last week.
The research also shows the consumer goods year-on-year sales up to
June 2006, of Rp 60.1 trillion (around US$6.5 billion), marked a 12
percent increase from last year's Rp 53.8 trillion.
Yongky said the 120 percent fuel price increase (on average) in October
2005 did have a significant effect, especially on 2005's total sales.
"In August 2005, I was so sure sales growth would reach around 25
percent by the end of the year, but then came the fuel price hike in
October, forcing the growth to rest at 18 percent by the end of the
year," he said.
According to an AC Nielson study in 15 Asian countries, Indonesia's 18
percent sales growth in 2005 was the second highest after India's 21
percent. In 2004, when the country saw a 14 percent growth, Indonesia
was the fastest growing in terms of consumer goods sales in Asia, as
compared to India, in ninth place, with a 5.5 percent growth.
"Judging from the trend of sales in terms of volume from 51 product
categories, excluding fashion goods, there are almost no decreases
resulting from the fuel price hike," Yongky said.
Among the reasons put forward to explain the trend in Indonesia were:
the advertising spending of big retailers, which rises 30 percent
annually; product innovations and the establishment of new modern
retailers.
"Recently, we collected data from bankers showing the use of credit
cards in the first semester increased by 20 percent. This proves that
Indonesian people continue to consume regardless of the conditions at
hand," he said.
Another anomaly in the research, Yongky said, was the high demand for
electronics products, like televisions, DVD players, cellular phones
and other tech-gadgets, in the country.
"Indonesians prefer tech-goods to clothes. Clothes are a lower priority
for them."
Another conclusion drawn from the research is that Indonesians tend to
use all shopping channels accessible, both modern and traditional ones,
regardless of their purchasing power. Meaning that, the haves still go
to traditional markets for lower prices while the poor also go to
hypermarkets for recreational purposes.
Even so, traditional markets still draw the largest number of visitors
on average at 25 visits a month per person, as compared to
hypermarkets' two times and supermarkets' three times and four times
for mini marts.
"There is no loyalty when it comes to prices. The poor like low prices
and so do the rich," he said.
Yongky said Indonesians were not generally loyal to one store.
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