ASCSIASI LNGLLCLA USA1 8LLANIA INDCNLSIA

(INDCNLSIAN SnCING CLN1kLS ASSCCIA1ICN)

Retail Trends &
Challenges
Retail Trends ..
The market
Huge and Changing
The shoppers
Socially Shopaholics
The challenges
Raising competition and raising cost of doing
business
Retail Trends ..
The market
Huge and Changing
The shoppers
Socially Shopaholics
The challenges
Raising competition and cost
GD Growth
Indonesia has it all ..
! Acce|eranng rea| GD growth
! 4.3 ln 2009, 6 ln 2010, 6.2 ln 2011

Grow|ng
M|dd|e C|ass
opu|anon
! 4
th
|argest popu|anon |n the wor|d w|th 23S m |nhab|tants
! Grow|ng urban|zanon
! M|dd|e c|ass
(1)
now represents over 40 of the popu|anon vs. 2S 10 years ago
! S|ze of m|dd|e c|ass has been grow|ng strong|y at a 7.S CAGk over the |ast 10 years to reach
23 m househo|ds
! GD per cap|ta to reach USD3,000 by 2012, a||ow|ng for greater d|sposab|e |ncome and faster
modern reta|| growth
!"#$%&' )#$"*"+,-"$. /01. 23""*4&$5. !-6787%8 /+9"+&8,6. !:!);<!. <8,6+ =&>&3"?*&+- 26+@
ABC =&D+&9 68 ?"?#367"+ E,-F 96,3G 8?&+9,+5 "H :!=IJIK
Iood keta||
Industry
! 1ota| food reta|| |ndustry - USDS38
! 1rad|nona| reta|| represents 89 of tota|
! Modern food reta|| (hypermarkets, supermarkets and conven|ence stores) represents on|y
11 of tota|
! Cne of the |owest modern food reta|| penetranon |eve|s |n As|a
! nypermarket has |ncreased at a 1S.1 CAGk over 2004-2009
3
Asia Pacific Landscape
In the most developed countries in Asia the modern trade is
dominant accounting for 80 to 90% of sales...compared to
developing countries 35-55%
75
80
73
61
27
33
38
40
20
90
87
89
82
57
51
48
45
36
Singapore Hongkong Taiwan Korea China Malaysia Thailand Philipines Indonesia
1999 2007
Developing Asian Countries Developed Asian Countries
Source : nlelsen
Before (Till Early 1990's) Now
- Owner Management - Professional Management
- Buy & Sell Relationship based on : - Business Building Relationship based on :
- Personal Preferrence & sometimes KKN - Customer's preference supported by research data
- Advertising Power - Combination of Above & Below The Line activity
(Holistic approach)
- No Clear Positioning & Price was considered as the main driving - Implementation of Category Management whereby each category
force in retailing. is assigned to a role whether it's Destination, Routine, Occasional or
Fill In.
- Traffic in Modern Trade was about 1,000 - 1,500 trxn/day - Traffic in Modern Trade varies from < 500 to >10,000 trxn/day
- Chain with 50+ outlets was only Hero - C4, Giant & HPM combined is almost 150 outlets
Alfamart & Indomaret combined is almost 8000 outlets
- Clear channel definition - Blurring channel (hypermarket, gourmet + f&b store)
- Operating hour : 10 to 10 - Operating hour varied but mostly are still 10 to 10
- Less brand conscious - Very brand conscious
Indonesia retail scene
Trade Sector Classification
& Example of Stores

- Carrefour
- ClanL
- PypermarL
- LouemarL
- AlfamarL
- lndomareL
- SLarmarL
- ?omarL
- Clrcle k
- 7-11
- 8orma
- Carrefour
Lxpress
- ulamond
- Celael
- ClanL
SupermarkeL
- Crlya
- Parl Parl
- Pero
- loodmarL
- naga
- 8amayana
- Slnar
- Sogo
- Superlndo
- 1lp 1op
- ?ogya
- |j;;
- [qy
- $z_z
- \z_y
1radluonal
SLore
MlnlmarkeL/
CvS
WeL MarkeL
PypermarkeL
(Large lormaL)
Crocery CarL
ueparLmenL
SLore
SupermarkeL
uenluon :

PypermarkeLs : - Pave 20 or more checkouL counLers
- Sell more varled producLs, such as grocerles,
elecLronlcs, cloLhs, shoes
SupermarkeLs : - Pave 3 Lo 20 checkouL counLers
- Sell almosL all caLegory of grocerles
MlnlmarkeLs : - Pave 1 Lo 2 checkouL counLers
- Sell some caLegory of grocerles
uepL. SLores : - Pave 3 Lo 20 checkouL counLers
- Sell some caLegorles such as fashlon apparel,
elecLronlcs, household producLs
Source : nlelsen
Retail Trends ..
The market
Huge and Changing
The shoppers
Socially Shopaholics
The challenges
Raising competition and cost
Shopplng ls recreauon
Asia-Pacic boats the worlds largest percentage of Recreational Shoppers
74% of worlds consumer admit to shopping as entertainment

Source : nlelsen
Consumer mosLly shop wlLh famlly/ relauves/ frlends.
21
19
28
17
27
29
24
22
18
79
81
72
83
73
71
76
78
82
Total Jadetabek Bandung Surabaya Makassar Medan SES A SES B SES C1
Shop Together
Shop Separately
Base: A33 LG?&$M !#?&$M 0,+,*6$@&-N O&H' PBIB
ln
<>&$65&
8y Clues 8y SLS
Source : nlelsen
1oLal !aboLabek 8andung Surabaya Makasar Medan SLS A SLS 8 SLS C
Shopping Mode

Base: A33 Q*+,4#8 O&8?"+9&+-8 A+RSBTN;RU.VKS.KKKCN O&H' PBIW
MosL of Lhe Shopper use moLorcycle, and
usually wlLh company
Hypermarkets Supermarkets Minimarkets
Traditional
Stores
Wet Markets
Mode of Transportation
Motorcycle 47 65 51 10 34
Other public transport 31 18 13 2 17
Car 14 12 1 - 1
Walk 13 11 37 89 47
Accompany by
Child 45 54 39 28 21
Spouse 34 50 32 7 19
Friend 22 7 9 1 5
Family (other than spouse
and child)
21 21 17 2 7
Alone 14 9 26 67 68
Source : nlelsen
Base: A33 Q*+,4#8 O&8?"+9&+-8 A+RSBTN;RU.VKS.KKKCN O&H' PBIW
PypermarkeLs or SupermarkeLs packed on
SaLurday and Sunday, compare Lo oLher
channel sLores
Hypermarkets Supermarkets Minimarkets Traditional Stores Wet Markets
Time
05.00 08.59 0 0 3 41 72
09.00 11.59 12 15 17 23 13
12.00 14.59 17 12 6 4 2
15.00 17.59 38 42 24 20 10
18.00 19.59 30 26 43 7 3
20.00 22.00 1 4 8 4 1
Length (Hour) 1.5 1.4 0.7 0.5 0.9
Day of Shopping
49% Uncertain, Sat/
Sun 34%
48% Uncertain,
Sat/Sun 45%
61% Uncertain,
Workdays 19%
63% Uncertain,
Workdays 36%
49% Uncertain,
Workdays 44%
Source : nlelsen
Retail Trends ..
The market
Huge and Changing
The shoppers
Socially Shopaholics
The challenges
Raising competition and cost
The Challenges
Raising competition (direct & indirect)
Less margin
Higher advertising & promotion cost
Cannibalization
More demanding & less loyal customers
Higher cost of doing business
Raising operating cost
Yearly increase of minimum wages
" 2-5% of revenue depending on the format
Raising electricity cost
" 1-2% of revenue depending on the format
The Challenges
Lack of authority control of mall
development
Unhealthy competition
Inadequate supporting facilities like parking &
waste management
Deteriorating environment
Lack of commitment from the tenants on
grand opening
Sometimes resulted from weak planning of the
developers
Lack of loyalty program from the mall
9
33
36
113
31
43
6
30
1 1
13
2
10
8aLam
SumaLera
!abar
!abodeLabek
!aLeng
!aum
8all
kallmanLan
n18
n11
Sulawesl
Maluku
apua
Shopplng CenLres ln lndonesla
(by lsland)
Shopplng CenLres ln lndonesla
(by lsland)
Shopplng CenLres ln !akarLa
13
10
9
24
13
22
3
9
6
!akarLa usaL
!akarLa 8araL
[akarLa 1lmur
!akarLa SelaLan
!akarLa uLara
1angerang/8anLen
uepok
8ekasl
8ogor

MasLerCard Worldwlde lndex of Consumer
urchaslng rlorlues P2 2011
lndonesla

MasLerCard Survey on Consumer urchaslng rlorlues-ulnlng &
LnLerLalnmenL

# lndoneslans vlslL elLher qulck serve resLauranLs (80) or food
courLs (70) for dlnlng, wlLh a very small proporuon paLronlslng
ne-dlnlng resLauranLs and pubs/bars. Powever, Lhe 2 of
lndoneslans vlslung pubs/bars do so frequenLly wlLh an average
of 6 Lrlps per monLh.
# AmusemenL parks are Lhe prlmary enLerLalnmenL ouLleL ln
lndonesla, wlLh 63 of lndoneslans vlslung Lhese. 1hls ls
followed by 36 of respondenLs who en[oy golng Lo Lhe movles.
MasLerCard Survey on Consumer urchaslng rlorlues-
1ravel

# 1he vasL ma[orlLy of lndoneslan respondenLs have noL
made an lnLernauonal Lrlp elLher for buslness or lelsure
ln Lhe pasL 12 monLhs, compared wlLh a ma[orlLy of
respondenLs havlng Lravelled domesucally.
# ln Lerms of domesuc Lravel, 73 of respondenLs Look a
lelsure Lrlp wlLhln Lhe counLry and only 18 Lravelled
for buslness.
MasLerCard Survey on Consumer urchaslng rlorlues-Luxury

# 1he luxury goods markeL ls small, wlLh a heavy skew Lowards
ownlng [ewelry. Women Lend Lo be much blgger spenders Lhan
men ln Lhls area.
# 1hree-quarLers of all luxury purchases by lndoneslans are planned
ln advance. 18 of respondenLs Lend Lo make lmpulse buys on Lhe
spoL, whlle 74 dellberaLe purchases for up Lo 6 monLhs before
acLually buylng lLems.
# AlmosL all luxury shopplng ls done locally, wlLh 42 of purchases
made aL full prlce and 36 done when lLems are on sale. 1hree-
quarLers of luxury purchases are noL mouvaLed by any speclal
reason, wlLh only 24 buylng Lo celebraLe speclal occaslons.
# lndoneslan Consumer Spendlng on LlecLronlcs up More 1han 20
# Sales of elecLronlc goods ln Lhe rsL elghL monLhs rose more Lhan 20
percenL on Lhe back of sLrong consumer spendlng, accordlng Lo an
lndusLry group.
# Sales from !anuary Lo AugusL were up 22 percenL Lo 8p 16.1 Lrllllon
($1.8 bllllon) from Lhe same perlod lasL year, and Lhe full-year gures
could be a 28 percenL lncrease Lo 8p 23 Lrllllon.
# LCu/LLu and plasma 1vs led sales, followed by alr-condluoners,
refrlgeraLors and washlng machlnes,
# Cn a monLhly basls, sales ln AugusL were down 8.7 percenL Lo 8p 2.1
Lrllllon from !uly, as many consumers refralned from spendlng on
durable goods durlng 8amadan.

.
!"#"$%" '$()*$%+ ,"$#*% -*./*0 ! 12/$3 45"$%*$ 6788




13
! !! ! Market Statistics Retail 3Q11

Shopping Malls - Lease Trade Centres - Strata Title
0 Quarterly Completions

(sqm) 0
25,700 YTD Completions
1
(sqm)

96,250
2,185,901 Total Stock (sqm) 1,481,022
29,626 Quarterly Net Absorption (sqm) 18,345
148,687 YTD Net Absorption (sqm) 94,535
88.1 Occupancy Rate (%) 66.1
260,130 Direct Vacancy (sqm) 501,927
415,484 Base Rent (IDR/sqm/mo) N/A
67,374 Service Charge (IDR/sqm/mo) N/A
482,858 Gross Rent
2
(IDR/sqm/mo) N/A
Up to 2013:
438,664
Proposed Stock (sqm)
Up to 2013:
4,908

1 Year-To-Date: additional stock from January to September 2011
2 Estimated achieved (effective) gross rent (including service charge) for typical specialty stores located in a prime area

Retail Glossary

Rental shopping malls are shopping centres that are offered for lease by the landlord on a monthly basis. The
typical lease term for a specialty store is between one and three years.
Strata-titled trade centres are shopping centres that are offered for sale by the developer. A trade centre mostly
consists of small kiosks that typically range from 4-20 sqm.
The net absorption (take-up) rate refers to the net cumulative increase in space occupied in a particular period.
Prime retail space refers to space in a mall that is located in prime areas (i.e. lobby level up to the first three
floors).
Vacancy rate is the ratio of vacant space to the total stock (leasable area) available.
Gross rent refers to the total rent payable by tenants. This is equivalent to the sum of net rent plus outgoings.
Base rent is the minimum rent for a retail space without taking into account any add-ons, such as service
charges and after-hours utility costs, that make up the total lease package.
Service charge is the collective name for the cost of air-conditioning and other services, and management
charges passed on to the tenant.

DISCLOSURE APPENDIX CONTAINS ANALYST CERTIFICATIONS AND THE
STATUS OF NON-US ANALYSTS. FOR OTHER IMPORTANT
DISCLOSURES, visit www.credit-suisse.com/ researchdisclosures or call +1
(877) 291-2683. U.S. Disclosure: Credit Suisse does and seeks to do business
with companies covered in its research reports. As a result, investors should be
aware that the Firm may have a conflict of interest that could affect the objectivity
of this report. Investors should consider this report as only a single factor in
making their investment decision.


17 January 2011
Asia Pacific/Indonesia
Equity Research
Strategy

Indonesia Consumer Survey 2011

Mapping the rising consumer spending


Global Equities Research
.


Credit Suisse
Research Institute

Thought leadership from
Credit Suisse Research
and the worlds foremost
experts

DISCLOSURE APPENDIX CONTAINS ANALYST CERTIFICATIONS AND THE
STATUS OF NON-US ANALYSTS. FOR OTHER IMPORTANT
DISCLOSURES, visit www.credit-suisse.com/ researchdisclosures or call +1
(877) 291-2683. U.S. Disclosure: Credit Suisse does and seeks to do business
with companies covered in its research reports. As a result, investors should be
aware that the Firm may have a conflict of interest that could affect the objectivity
of this report. Investors should consider this report as only a single factor in
making their investment decision.


17 January 2011
Asia Pacific/Indonesia
Equity Research
Strategy

Indonesia Consumer Survey 2011

Mapping the rising consumer spending


Global Equities Research
.


Credit Suisse
Research Institute

Thought leadership from
Credit Suisse Research
and the worlds foremost
experts
17 January 2011
Indonesia Consumer Survey 2011 13
We believe that companies operating in non-Java areas (or have a nation-wide
distribution network) should do better than those focusing on Java areas such as Astra
International, Indofood, BBRI, SMGR, and GGRM.
Regarding the use of US dollar or 2010 PPP-implied conversion rate (published by IMF)
as conversion exchange rates, we found that income distribution among the seven
emerging countries varies significantly. Saudi Arabia is much wealthier than others,
followed by Russia, China and Brazil. China and Russia look particularly good if we
calculate their income on a PPP-adjusted basis. Indonesia and Egypt are the poorest
countries, irrespective of the conversion exchange rate.
Figure 4: Huge divergence among emerging markets

Source: Credit Suisse Emerging Consumer Survey 2011, AC Nielsen
Indonesias low income profile is also suggested by the type of its monthly spending,
especially given 29% of Indonesias monthly spending on food and only 10% on saving
(Figure 10). Another finding from our respondents is also with regard to the saving method,
given 29% of the total respondents say that they did not have any extra money to save.
Figure 5: Indonesia monthly spending by category (%) Figure 6: Indonesia method of saving
0%
5%
10%
15%
20%
25%
30%
35%
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Source: Credit Suisse Emerging Consumer Survey 2011, AC Nielsen Source: Credit Suisse Emerging Consumer Survey 2011, AC Nielsen
Indonesia is among the
poorest countries in the
seven emerging countries
Saudi Arabias household
income is 2.2x that of China
and 8.9x that of Indonesia
Low spending power is
reflected in the high
proportion of food as a
percentage of total income
and saving pattern
Cur analysls lndlcaLes LhaL
$ non-!ava resldenLs exhlblL lower lncllnauon Lo spend
$ non-!ava respondenLs exhlblL hlgher aer-Lax lncome per monLh
per person Lhan !ava respondenLs (8p2.84 mn per monLh for non-
!ava versus 8p2.46 mn per monLh for !ava)
$ non-!ava respondenLs exhlblL hlgher savlng (8p0.32 mn for non-
!ava and 8p0.24 mn for !ava) per monLh as well as hlgher savlng
raLe (18 of aer Lax lncome per monLh for non-!ava versus 10
for !ava).
$ 1hus, our analysls lndlcaLes LhaL ouLslde !ava resldenLs, Lhough
Lhey earn more, Lhey also save more.
We belleve LhaL non-!ava resldenLs exhlblL hlgher purchaslng power.
Powever, Lhey are less consumpuve Lhan !ava respondenLs. 1hls
lndlcaLes LhaL a sLronger focus on markeung and adveruslng ln
ouLslde !ava reglons Lo enuce resldenLs Lo consume more may lead
Lo slgnlcanLly hlgher consumpuon growLh of ouLslde !ava reglons,
glven Lhe hlgher purchaslng power exhlblLed by Lhls segmenL.
!"#$%& ( )*+,&$%*$-
!"#$%& ( )*+,&$%*$-
!"#$%& ( )*+,&$%*$-
!"#$%& ( )*+,&$%*$-
Confidential & Proprietary Copyright 2008 The Nielsen Company
Shopper Trend Mall 2008
Page 66
r.-,.-.., .. -.... .. .... ...a .-...
0
4
10
14
27
30
15
r..-. .|| .-...a-...
s....-. .c.-|.-. r-....| o.|..- o...s.., ..-.s-. zaa.
V..- .|.. ...- . a.,
r.-., a.,
,- ...-. . --|
o..- .. ...- . --|
z, ...-. . ....|
o..- . ....| .. |-..
-.-.
i.a..-...
1
4
9
20
28
26
12
.... r......
i. ..-..- i.a..-.... -.. ... ...- .|.. ..-..- .r.c
Confidential & Proprietary Copyright 2008 The Nielsen Company
Shopper Trend Mall 2008
Page 76
12%
15%
17%
24%
38%
11%
13%
29%
28%
21%
25%
34%
33%
26%
28%
17%
14%
21%
16%
16% 22%
12%
8%
12%
30%
32%
41%
44%
51%
57%
58%
63%
64%
68%
76%
78%
22%
7%
12%
10%
4%
4%
13%
18%
42%
23%
5%
13%
18%
13%
11%
12%
11%
13%
3%
59%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
INDI JAP NZ KOR AU HK SING MAL INDO PH TW THA VN CHN
Most often Second most often Third most often
Base: All respondents
Most often eaten take-away restaurant
- KFC
Confidential & Proprietary Copyright 2008 The Nielsen Company
Shopper Trend Mall 2008
Page 77
27%
36%
41%
46% 46%
14%
21%
18%
23%
38%
21%
22%
20%
23%
22%
10%
13%
16%
14%
8%
14%
7%
8%
0%
43%
47%
51%
57%
59%
66%
70%
71%
73%
76% 76%
84%
23% 23%
20%
18%
12%
23%
27%
53%
18%
19%
20%
12%
15%
16%
10%
10%
57%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
VN KOR NZ INDI AU INDO THA MAL CHN PH SING JAP HK TW
Most often Second most often Third most often
Base: All respondents
Most often eaten take-away restaurant
- McDonalds
Confidential & Proprietary Copyright 2008 The Nielsen Company
Shopper Trend Mall 2008
Page 78
2%
4%
9%
14%
11%
3%
3%
9%
11%
5%
12%
16%
17%
17%
20%
8%
10%
9%
14%
20%
19%
20%
13%
0%
6%
13%
13%
16%
18%
25%
26%
28%
35%
39%
48%
55%
2%
4%
2%
3%
1%
0%
1%
6%
22%
6%
0%
2%
4%
3%
8%
9%
18%
14%
0%
48%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
VN JAP SING TW PH AU HK NZ CHN MAL KOR INDO THA INDI
Most often Second most often Third most often
Base: All respondents
Most often eaten take-away restaurant
- Pizza Hut