The purpose of this report is to present the reasons why 7-eleven failed in Indonesia, based on the

CNBC video. In 2009, 7-eleven opened its first store in Indonesia. It was helped by local operator PT
Modern International. It sold traditional 7-eleven items late night munchies, local food and alchohol.
It was a popular hangout place. It expanded its business in the capital opening 21 stores in 2010 and
reached 100 stores in 2012. In 2014 the company booked sales of $78.2M from 190 stores. The chain
closed down 25 undeperforming stores in 2016 and closed the rest of the stores in 2017. 7-eleven
failed in Indonesia because of lack of sales; Indonesian customers would buy only one drink and one
bread and sat there for 3 hours. As a result of the existing and new competitors combined with
restricted regulations, 7-eleven could not expand beyond the capital. Two of the biggest competitors
were Indomaret and Alfamart. In 2017 their stores counted 15.000 and 10.000 respectively.Because
the sale of alcohol in covenient stores was banned across the country in 2015, the sales of 7-eleven
dropped nearly 24% over the next year. Indonesian economic slow down also worked in the
backdrop. 7-eleven cited that choosing the right business partner mght be the key to penetrate into
local market. It was proven in Japan where the local operator Ito Yokado successfully managed to
expand the stores to 20.000 spots compared to less than 9000 stores in US. In conclusion it was too
early to point put that seeking the right international partner was the answer key. Based on the three
main reasons why the chain was closed down, it was worth taking a look at the bigger picture. In
short, business regulations, local competitors and customers behavior had to be taken into
consideration.