APPAREL AND FOOTWEAR IN INDONESIA - ANALYSIS

Country Report | Feb 2020

EXECUTIVE SUMMARY Market Sizes

Sales boosted by economic growth and new lifestyle trends Sales of Apparel and Footwear
Retail Value RSP - IDR billion - Current - 2005-2024
Rising consumer disposable incomes in Indonesia are helping to boost demand for
apparel and footwear, particularly sportswear, with the athleisure trend continuing to
expand. As sportswear is related to basic fashion style, strong growth is having a 175,652 Forecast
positive impact on categories such as tops and jeans. Meanwhile, other areas in 200,000
footwear, except sports footwear, are struggling, partly due to the shift from shopping
to travelling.
Although many categories are struggling and overall growth is not as strong as 150,000
historically, outlook is still positive. Due to widespread social media use, consumers
tend to be more aware of fashion trends, with millennials in particular liking to keep up
to date and share fashion tips through sites like Instagram. Meanwhile, the growth of e-
commerce providers is allowing people to shop more easily and impulsively, with such 100,000
players also regularly offering flash sales. This behaviour is resulting in faster than ever
changing fashion trends. Although the overall outlook is still positive, fashion
companies, particularly global brands, face challenges regarding how to comply with
new rapidly developing trends while maintaining their competitive advantage. 50,000

Growing interest in healthy lifestyle, athleisure and street-style trends

0
The ongoing healthy lifestyle, athleisure and street-style trends continue to shape 2005 2019 2024
fashion in Indonesia. Since people are becoming healthier, they are gaining more
confidence, thus boosting demand for slim-fit fashion. Many companies have launched
slim-fit collections, occasionally offering discounts and even charging higher prices on
Sales Performance of Apparel and Footwear
slim-fit collections such as The Executive, which indicates higher demand for slim-fit
% Y-O-Y Retail Value RSP Growth 2005-2024
options.
In response to these trends, sports footwear sales increased strongly during the year,
with demand rising across ages and genders. Furthermore, women are also shifting
6.2% Forecast
20%
from heels to sneakers. People continue to embrace new fashion trends and search for
comfort and function in line with the athleisure trend. Street-style is also booming,
15%
particularly in urban areas. Streetwear brands such as Supreme and Bape combine
conventional street-style with high-street style. New launches of streetwear brands
are always eagerly awaited by millennials, especially in urban areas, with some 10%
consumers even queuing for more than half a day for high-street style products.
5%
This trend is also helping to boost demand for higher priced sneakers for both sports
and fashion purposes. Indeed, the price of some special edition ranges for popular 0%
sneaker brands such as Nike and Adidas can reach tens or even hundreds of millions of
rupiah. Some consumers have even started to see such sneakers as investments, -5%
similar to luxury watches and luxury bags. Consequently, unit prices within sneakers
are expected to continue growing strongly over the coming years, with products in this
-10%
area increasingly being perceived as social status statements.
Another interesting development in Indonesia is rising demand for fashion ranges -15%
2005 2019 2024
specially tailored towards the more modest preferences of the country’s huge Muslim
population. This is mainly affecting women, particularly womenswear and apparel
accessories such as hijabs. Growing interest in modest fashion is also expected to affect
sportswear over the coming years. Indeed, as the largest Muslim country in the world, Sales of Apparel and Footwear by Category
Indonesia is expected to become the centre of conservative fashion. This is also Retail Value RSP - IDR billion - Current - 2019 Growth Performance
supported by the fact that the increasing number of Indonesian designers focusing on
this area are gaining international acclaim, as well as growing availability via online Apparel
retailers. 131,035.8
Footwear
Local players continue to compete strongly with global brands 44,616.5
Sportswear
Competition between local and global brands is becoming more intense due to rapid e- 15,533.6
commerce growth and the boom in demand for independent brands. While local
0% 10% 15%
players usually offer cheaper prices, global brands rely on their longstanding image and
are perceived as providing higher quality. Fast fashion global brands such as Uniqlo are APPAREL AND FOOTWEAR 175,652.2 CURRENT % CAGR % CAGR
enjoying double-digit growth due to their expansion strategies. Such brands already YEAR % 2014-2019 2019-2024
GROWTH
have many stores in urban areas and are now expanding into second and third tier
cities, thus targeting new customers, particularly outside Java.

Wide ranges and demand for convenience boosts e-commerce

distribution

© Euromonitor Interna onal 2020 Page 1 of 3

Apparel and footwear is one of the highest growth areas for e-commerce in Indonesia. Competitive Landscape
Online and social media purchases of apparel and footwear items continue to grow
rapidly, especially among women. Operators in this channel usually offer regular
promotional programmes such as national online shopping days and daily flash sales. Company Shares of Apparel and Footwear
Such programmes are encouraging customers to become more impulsive and spend % Share (NBO) - Retail Value RSP - 2019
more online, with women typically embracing this channel more than men. This trend
Inditex, Industria de Di... 1.4%
is also being supported by the rise of the working mother trend. Since many women
need to work in offices, they have less time to shop, thus fuelling interest in e- Uniqlo Fast Retailing In... 0.9%
commerce. On the other hand, this also indicates that womenswear has high potential Sepatu Bata Tbk PT 0.8%
for growth since women have higher spending power. Male customers is also a
promising area, as indicated by the recent launch of a new section for men by fast Skechers USA Inc 0.6%
growing e-commerce platform Shopee. Carrefour Indonesia PT 0.5%

With the popularity of e-commerce growing rapidly, sales via traditional stores are PT Adidas Indonesia 0.5%
expected to decline. However, in general, it is believed that online and traditional Giordano Indonesia PT 0.5%
stores offer different shopping experiences and cannot substitute one another.
Therefore, traditional retailers are expected to innovate in the future by introducing Nike Indonesia PT 0.5%
new concepts or experiences that cannot be replicated by online players . For instance, Ricky Putra Globalindo T... 0.4%
super premium jeans sales have not been impacted by the growth of e-commerce due
Collective Brands Inc 0.4%
to the offering of a special jeans cutting service in stores. Therefore, sales of premium
and super premium jeans brands such as Levi Strauss, Nudie and Flat Head via online Indonesia Wacoal PT 0.3%
channels remain negligible. Megariamas Sentosa PT 0.3%
The impact of rising internet usage is also highlighted by the increasing importance of Delami Garment Industrie... 0.3%
social media when it comes to creating fashion trends and raising brand awareness.
Binacitra Kharisma Lesta... 0.3%
Consequently, many international brands are using online influencers to promote their
brands. A growing number of start-ups/independent brands are seeing robust sales Sumber Kreasi Fumiko PT 0.3%
growth due to collaboration with popular influencers. These collaboration products Kering SA 0.3%
also help independent brands increase sales since domestic players are traditionally
associated with cheap prices and low quality. The trend towards collaboration with adidas Group 0.3%
influencers is expected to continue growing. In response to the increasing popularity Forever 21 Inc 0.3%
and effectiveness of influencers as marketing tools and growing social media usage in
Private Label 0.1%
Indonesia, it is expected that international players will increase their engagement with
influencers or other popular brands to maintain their relationships with younger Others 91.2%
customers.

Economic uncertainty and import taxes to limit growth

Over the coming years, the economic and political situation in Indonesia will become a Brand Shares of Apparel and Footwear
major challenge for apparel and footwear. Due to an increasing current account deficit, % Share (LBN) - Retail Value RSP - 2019
Indonesia’s currency is becoming more volatile. Over the past year, the rupiah rapidly
weakened against the US dollar, with much stronger price inflation expected. Higher Uniqlo 0.9%
inflation could negatively impact demand due to falling spending power. Zara 0.6%
Consequently, companies and investors may opt for a ‘wait and see’ strategy, resulting
in minimal expansion and growth. Skechers 0.6%
Bata 0.6%
In addition, the government recently released new tax regulations in a bid to reduce
imports. Tariffs have been increased by up to four times and imposed on more than Harmonie 0.5%
1,000 types of goods, including apparel and footwear. Therefore, global players will Nike 0.4%
face more challenges than local brands since imported goods will become much more
expensive. adidas 0.4%
GT Man 0.4%
APPENDIX Giordano 0.4%
Wacoal 0.3%
CORONAVIRUS (COVID-19) Yongki Komaladi 0.3%

The analysis in this report was written before the known outbreak of Coronavirus Forever 21 0.3%
(COVID-19) on 31 December 2019. Accordant industry data were also built and Sorella 0.3%
published prior to this date, and before the virus started to spread and export
internationally. Euromonitor International has therefore not included analysis relating Mothercare 0.2%
to COVID-19 in this report, and its potential influence is not factored into forecast data. Zara Kids 0.2%

Given its early stage of development, the scale and impact of COVID-19, both at global Reebok 0.2%
and national levels, remains uncertain, but is evolving fast. For the latest insight on Payless ShoeSource 0.2%
COVID-19 and how it can be expected to impact demand across fmcg industries, readers
Fladeo 0.2%
can access strategic analysis and regular updates on www.euromonitor.com and via the
Passport system, where new content is being added on a systematic basis as the Private Label 0.1%
situation develops.
Others 92.7%

DEFINITIONS Increasing share Decreasing share No change

Explanations of words and/or terminology used in this report are as follows:

GBO refers to global brand owner, which is the ultimate owner of a brand.
NBO refers to national brand owner, which is the company licenced to distribute a
brand on behalf of a GBO. The NBO may be a subsidiary of a GBO or it may be a
completely separate company. Share tables at both GBO and NBO level are provided
in the report. Reference to shares in the report analysis is at NBO level.

SOURCES

© Euromonitor Interna onal 2020 Page 2 of 3

Sources used during research included the following:

Summary 1 Research Sources

Official Badan Pusat Statistik

Sources
Trade As os ia s i Pa brik Appa rel/Ga rment Indones ia (Indotex)
Associations
As os ia s i Pema s ok Ga rmen da n As es oris Indones ia /As s ocia tion of Indones ia n
Ga rment & Acces s ories Suppliers (APGAI)
As os ia s i Pers epa tua n Indones ia /Indones ia n Footwea r As s ocia tion (APRISINDO)
As os ia s i Perteks tila n Indones ia (API)
As s ocia tion of Ga rment Producer Indones ia
As s ocia tion of Indones ia Textile (API)
Trade Press Ba ta via s e.co.id
Bis nis Ja ba r
Detik Fina nce
Indones ia Fina nce Toda y
Kompa s Online
Konta n Indus tri
Ma rketing.co.id
Meda n Bis nis Da ily
Media Indones ia
Metro TV
MIX
Okezone
Ra da r La mpung
Rima News
Seputa r Indones ia
Swa Online
Tempo Online
Tribun News

Source: Euromonitor Interna tiona l

© Euromonitor Interna onal 2020 Page 3 of 3