JAKARTA: While chain stores in Indonesia typically concentrate on major cities where demand is strongest, MR DIY is taking a different approach by opening outlets outside of urban centres and expanding to smaller cities across the country.
Coming from Malaysia and entering Indonesia in 2017 under the name PT Duta Intiguna Yasa, the home improvement and convenience retailer opened its first store in the Jakarta satellite city of Bekasi, West Java.
The company, which focuses on offering affordable products with a range of over 18,000 different goods, is betting on fast consumer spending growth in the country’s regions to overcome the challenges of lower spending power and logistical hurdles.
MR DIY Indonesia president director Cyril Noerhadi said the firm selects locations that offer both “value and convenience” to customers.
“Our stores are strategically located to ensure that every family can find what they need easily, regardless of where they are,” he told The Jakarta Post on Sept 24.
“The expansion strategy focuses on being close to our customers, not just in terms of location but by providing products at affordable prices, whether in large cities or smaller towns,” Cyril said.
Since entering the Indonesian market, MR DIY has opened an average of 100 stores a year, even maintaining this pace during the pandemic in 2020. Today, the company operates 907 stores across the country, all directly managed to ensure consistent service quality.
In comparison, competitor ACE Hardware, which opened shop in Indonesia back in 1996, only operated 239 stores as of July 31.
This year, the company plans to open just 15 to 20 new locations.
Notably, MR DIY has become a pioneer in several small cities, often being the first national retailer to establish a presence.
One example is Kalabahi, located on the remote Alor Island in East Nusa Tenggara, where MR DIY opened a store, while major convenience store chains like Alfamart and Indomaret have yet to arrive.
Kalabahi is just one of many similar cases, the company said, though it does not disclose the exact number.
“We are proud to be pioneers in serving the needs of communities in areas that were previously underserved. To date, we have opened several in smaller towns that became the first national retail stores in those cities, including Kalabahi,” Cyril said.
Yongky Surya Susilo, an expert at the Indonesia Retail and Tenants Association, highlighted the layered structure of market segments across Indonesia.
Retailers targeting middle to upper-income consumers tended to focus on first-tier cities with large populations, like Jakarta, Bandung and Surabaya, leaving second and third-tier cities to become the focus for other players. — The Jakarta Post/ANN
