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Business

Indonesia's Salim Group courts small shops with grocery app

Instant-noodle maker eyes growing internet penetration in traditional retail market

Executives of Idmarco at Wednesday's press conference in Jakarta. Idmarco mainly offers goods made by Indofood Sukses Makmur, Salim Group's core food company. (Photo by Wataru Suzuki)

JAKARTA -- Indonesian conglomerate Salim Group launched a grocery shopping app on Wednesday mainly targeting small shop owners, in an effort to tap into the growing number of mobile-phone users among lower-income households.

The app, called Idmarco, is the latest e-commerce offering from the group as its owner, billionaire Anthoni Salim, tries to adapt his instant-noodle-to-autos conglomerate to the digital era. It acquired an e-commerce site from Indonesian telecommunications provider XL Axiata and SK Planet of South Korea in August, and rolled out a shopping app with South Korea's Lotte Group in October.

"The way people shop, the way entrepreneurs trade, have started to change to the e-commerce direction," said Budhi Wibawa, president of Idmarco's operating company. "We position ourselves as the first e-commerce player for [fast-moving consumer goods] product wholesale."

Traditional mom and pop stores, small family-run shops, still dominate Indonesia's retail market -- there are estimated to be more than 1.2 million such stores in the country. But the younger generation of owners who have inherited the shops from their parents do not want to go through the same hassle of driving their motorbikes to the market, buying boxes of instant noodles and carrying them back under scorching heat, said Regan Dwinanda, vice president of marketing and business development at Idmarco.

Instead, he said owners want to utilize the mobile phone for "an easy and hassle-free process." Active internet users in Indonesia reached 132.7 million in 2017, covering 51% of the total population, according to marketing services agency We Are Social.

Idmarco mainly offers goods made by Indofood Sukses Makmur, Salim Group's core food company, such as Indomie instant noodles, Bimoli cooking oil and Indomilk dairy products. While the range of products is much more limited than popular e-commerce apps, its main appeal is free shipping. It uses Indomarco Adi Prima, Indofood's distribution unit, which already has 1,300 small warehouses across the country.

Shoppers can also pay for the orders at Indomaret, the country's largest convenience store chain controlled by Salim. This existing infrastructure enables the group to launch a nationwide e-commerce business quickly and without heavy investment.

Dwinanda said shoppers are required to purchase a minimum of 300,000 rupiah ($21.80) per order. Idmarco has been available in limited areas since last April and already serves 5,000 customers, he added. Wednesday marked the full-scale launch across the country.

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