Retail in Asia


EXCLUSIVE INTERVIEW with Plaza Nusantara Realty’s CEO

The Indonesian retail market today boasts a growing middle class with strong purchasing power, and millennials with large spending habits, marking its significant potential for the South East Asian retail market.

Retail in Asia caught up with Mia B. Egron, President Director and CEO of Plaza Nusantara Realty, the property manager of Plaza Indonesia REIT. The REIT assets include two shopping centers, Plaza Indonesia Shopping Center and fX Sudirman, a 5-star hotel, Grand Hyatt Jakarta, and an office tower, The Plaza Office Tower.

SEE ALSO: EXCLUSIVE INTERVIEW with Indonesia’s beauty brand Somethinc

Mia started her career in advertising and PR in New York City and joined ​​the Plaza Indonesia Group of Companies in 1997. She worked as Chief Commercial Officer  and Chief Operating Officer before being appointed President Director and CEO of Plaza Nusantara Realty in 2019 (upon the REIT listing). In 2008, she was the first woman and youngest member to sit on the board of directors.

Together, we discussed Indonesia’s retail market, the impact of the pandemic, new generations of shoppers as well as Indonesia’s emerging brands and designers.

RiA: To start this conversation, let’s look back at the last two years, how has Plaza Indonesia navigated this period of uncertainty and transformation?

Mia: Safety was our number one priority during this period. This was especially true at the onset of the pandemic because nobody knew what to expect, there was no vaccination and it was scary. We understand our customers and focused on their concerns, which was safety. We invested in several safety and hygiene technologies such as several touchless features, in lifts for example, entrances, soap & hand-sanitizing dispensers, car park ticketing, touchless menus etc… 

Source: Plaza Indonesia

Secondly, we also developed a comprehensive safety protocol, which included a safe access pass via a QR code, and we did this relatively early on. In fact our safety protocol was so comprehensive that the Jakarta Government used it as a benchmark for other malls in Jakarta. 

Before the reopening on June 15, 2020, we undertook a massive campaign with several safety videos and we leveraged KOLs for safety endorsements. In fact, our safety video for the reopening was produced by a respected production company to make it look and feel like a story; to show the experience for the customer going into the mall again.

In terms of supporting our tenants, we worked closely with all of them to engage our customers through digital platforms and social media. During the total lockdowns, we launched #PiShopFromHome and #PIFoodDelivery to enable our tenants to trade during the mall closures. We also developed a variety of social media content such as fashion videos, virtual classes such as cooking or workouts to keep our customers engaged.  Our e-concierge was also very active to fulfill shopping needs through our personal shopper services. And we rewarded our customers generously through our loyalty program, Plaza Indonesia Privilege Card, launched in 2013 in which we now have 88,000 active members. It’s a costly exercise, but it definitely paid off. Even though customer traffic was restricted to maximum 50 percent,  we had quality customers with bigger basket size. Less people, but higher spending. We also gained new, young affluent customers. 

By December 2021, transaction values exceeded pre-Covid and were at 153 percent that of 2019, a very big leap. Indonesians could not travel to do their luxury shopping, and Plaza Indonesia could fulfill the needs of luxury shoppers across the country.

RiA: In terms of categories was there one in particular that surpassed the others? 

Mia: Definitely the luxury,  jewelry and watches categories were the most resilient. The performance of these three categories are now around 65- 75 percent higher than pre Covid. Another resilient category is beauty, followed by home interiors. In the beauty sector, it was about investing in skincare, not really so much cosmetics. And of course all things around home interiors. Space demand for home interiors has significantly increased. Revenge shopping was definitely happening. 

RiA: You mentioned you worked with KOLs. They are known to appeal to a young audience. Can you elaborate on the millennials and gen Z consumption habits in Indonesia?  

Mia: The new generation is definitely very consumptive. When we reopened after the first lockdown in June 2020 when everybody was still scared of Covid and there was still no vaccination, it was the young shoppers who were coming and queuing at Chanel, LV and Gucci and dining at the F&Bs. We have acquired many younger shoppers and the percentage of millennials and Gen Z has signifcantly increased in our active customer base.  This did not come as a surprise,  almost 50 percent of Indonesia’s population of  278 million people is 30 years old and below. This is a big opportunity for retailers to catch on this growing middle class and aspirational millennials. 

This shift has also impacted our offer in terms of mix of brands, such as larger space for brands like Bathing Ape and more upmarket streetwear selections. However, the young consumers are also fuelling revenge spending on ultra luxury items such as watches.

RiA: Let’s talk about the rise of e-commerce. Can you tell us more about e-commerce adoption in Indonesia and more specifically about your e-commerce platform?

Mia: E-commerce in Indonesia has grown rapidly. In 2021 the revenue was US$43 billion, a 34 percent increase from 2020, representing around 20 percent of the total retail sales. In 2016 e-commerce represented only two percent. However, these e-commerce figures mostly focus on mass products or essential goods. 

On our Plaza e-shop we have around 1000 to 1500 visits a day, and these numbers can drastically increase when there is a lockdown. More brands are joining our e-shop, especially since the lockdowns, and they can see the benefit to the consumers and their performance. However, for Plaza Indonesia, the shopping is still very experiential, the in-store experience cannot be replaced.

RiA: You touched on the importance of physical stores and the customer experience. Do you think the future of retail is omnichannel?

Mia: It is important to meet your customers where they are and to be where they consume their information, so the digital space is essential. We use social media to promote new collections and it has been good for the business to be omni-channel so customers can check the new releases, but when it comes to high-end products the customers still want to try and feel the products. There is also an issue with safety and delivery here in Indonesia. This is why I think the physical stores will always prevail.

That being said, digitalisation enhances the customer experience and engagement. Through digital, we also leverage data analytics to do targeted marketing and provide personalized recommendations to our customers. However in terms of delivering the whole experience to the customer, the physical store will always be there. 

RiA: Let’s talk more about Indonesia, and more about the changes brought by the pandemic. Many new local brands emerged in this period. Does Plaza Indonesia work with some of the up and coming Indonesian brands? 

Mia: We work with a variety of Indonesian brands such as Sebastian Gunawan, Sapto Djojokartiko , Iwan Tirta  and a few other designers. They have standalone stores in Plaza Indonesia. Several local fashion and beauty brands, as well as upcoming designers are represented in multi brand boutiques in Plaza Indonesia too. We also offer pop-up store opportunities for upcoming designers. If these pop ups are successful, we integrate the brand into one of the many multi-brand boutiques. We also have a floor dedicated to these up and coming brands,  the fourth floor, covering fashion, beauty, skin care, homeware, etc…

RiA: How do you see retail evolving in Indonesia in the next few years? 

Mia: It’s going to be very exciting because it’s a big market. There is a growing middle class that is consumptive but at the same time discerning. We have noticed that there is a huge appetite for luxury and with the pandemic, people have learned to shop locally. I think domestic shopping is a trend that is here to stay. This translates into more products and brands being available here in Indonesia. Retailers now understand that their collections have to be well represented here because there is demand.

SEE ALSO: EXCLUSIVE INTERVIEW with world-renowned marketer Keith Weed

At the same time, customer experience and engagement is going to be even more important, and as we know when things are digitized, data analytics, predictive analytics are very important. In fact, it is important now to use targeted marketing and  personalized recommendations. With all this digitalization, we can be a little bit more scientific. Through retail and predictive analytics we can cross sell, upsell, and a lot of retailers are learning to do that better, to ultimately respond to the growing sophisticated consumer demand. The direction for retailers is to have engagement at a highly personalized level.