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launched after a three-and-a-half year hiatus,” years. “Many middle-class customers are now operates Sogo, Seibu, Galeries Lafayette and she adds. moving up to try premium products such as the two Sephora stores in the country. Its main Until now, prestige beauty brands have SK-II,” says beauty training company Red Scout competitor is Metro, which has nine department largely targeted Indonesia’s 1% of “ultra- founder Simone Pedersen. stores, including fve in Jakarta. Observers note wealthy” consumers, which due to the country’s Nevertheless, Euromonitor International that prime spots in the top department stores population represents a signifcant number. As said in a recent white paper that Indonesia is are more diffcult to negotiate. Most of the such, many brand efforts have been centered seeing growing income inequality, inhibiting competition in the market is among the leading on targeting wealthy consumers with special discretionary spending among middle-class skincare brands, Ioma’s Karam says. events such as mall roadshows. “Customer consumers, and this situation is likely to continue The medispa segment is also seen as a events are popular and create great engagement for many years to come. growing channel for selling beauty products, opportunities with customers who like to be “in especially skincare. In addition, standalone the know” for luxury brands,” says La Prairie Retail dominated by malls stores are seeing expansion. “The majority of Group president and ceo Patrick Rasquinet. When it comes to retail, Indonesia, especially our business comes from freestanding stores,” “Facial services are particularly appreciated by Jakarta, now has a wealth of high-end malls. says La Prairie’s Rasquinet. Make Up For Ever’s Currently, there are more than 170 malls in standalones are operated by local distributor Jakarta. Outside the capital, prestige cosmetics PT Kreasi Maharani, which also operates the sales are also growing in cities like Medan BeautyBox chain of 11 multibrand outlets “ and Surabaya as well as in Bali, according to offering brands like GlamGlow, Sampar and Oscar Blandi, which it also distributes. observers. “The rate of growth is higher outside Growth is higher outside With plenty of room still to grow, Indonesia is Jakarta/Java; however the Jakarta/Java; however the infrastructure is not likely to be a continued area of focus for beauty the most effcient—this is another challenge to infrastructure is not the overcome,” says Irwan. brands. Nevertheless, lower predicted growth The retail market is dominated by a single rates and barriers to entry mean that business most effcient player, Mitra Adiperkasa (MAP), which there is likely to be a long-term project. n Wendy Irwan” Indonesia retail at a glance Luxasia Indonesia country manager No of prestige points of sale: around 100 Sogo: 14 stores affuent consumers, who are ready to spend.” Sogo, operated in Indonesia by Mitra Adiperkasa, is the country’s largest department-store chain “We make a lot of money with events,” says offering prestige beauty products. Ioma’s Karam frankly, adding that well-off Indonesian women like to spend a lot of time at Metro: 9 stores the beauty counter fnding out about products Singapore-based Metro entered Indonesia in 1991, and now has nine outlets offering prestige and having consultations. cosmetics around the country: fve in Jakarta, one in Bandung, one in Makassar, one in But increasingly, the country’s growing middle Surabaya and one in Solo. class—those earning more than $10,000 per year—is also a target for prestige brands, and Sephora: 2 stores this population is expected to double in coming Sephora entered Indonesia in 2014 with licensee Mitra Adiperkasa. It now has two stores, and is expected to end the year with a total of fve. Complex regulations Galeries Lafayette: 1 store Indonesia beauty & personal-care sales* by Galeries Lafayette’s Jakarta outpost, operated by Mitra Adiperkasa, opened in mid-2013 in category 2014 South Jakarta’s Pacifc Place mall. Category Sales $m % change 2014/2013 Central: 1 store Skincare 1,455 +23.5 Thailand’s Central opened its frst store in Indonesia in 2014 in Jakarta’s Grand Indonesia mall, Color cosmetics 330 +14.6 where Seibu is also situated. Another store is planned for 2016. Fragrance 210.3 +17.1 Seibu: 1 store Beauty & 3,873 +16.5 The one Seibu store in Indonesia, operated by Mitra Adiperkasa, is generally considered to be personal care the top-end department store in the country. Source: Euromonitor International *Retail sales November-December 2015 - N°24 - BW Confidential 87