Home to a growing base of consumers, Indonesia has seen the rising purchasing power of its fast-expanding middle class drive the retail industry to new highs in recent years. Foreign and domestic retailers alike are investing heavily in new construction and expansion projects that will see traditional retail models increasingly supplanted by modern franchises and chains. Although retail could be set for a volatile year, with the rupiah’s depreciation expected to cut into purchasing power and increase pressure on retailers, lower inflation and rising wages should help offset this. The market remains highly attractive to foreign investors despite its stringent regulatory environment, and growth is expected in 2015 as a result of rising domestic consumption and e-commerce expansion. While retail space in Jakarta will remain limited in the medium term, rising rents will help spread industry growth across the nation. This will keep the sector robust and dynamic into 2016, as well as present lucrative opportunities to foreign and local investors.
This chapter contains an interview with Irwan Danny Mussry, President and CEO, Time International.