Malls in Jakarta will be the most technologically advanced place to shop by 2018. Here’s why.

Jakarta, Indonesia

With its 10 million inhabitants, and a growing middle- and upper-class who have an addiction to malls and mobiles phones, Jakarta is ripe for a retail revolution. While many of the world’s growth markets are slowing, Indonesia is becoming more and more important for digital investors and brands wanting to take a first mover’s advantage.

What’s holding Jakarta back?

In 2014 the World Bank ranked Indonesia among the lowest of all the key Southeast Asian countries on its Logistics Performance Index. The reason? Indonesia is an archipelago made up of 17,508 islands, some 6,000 of them inhabited. This means it is very expensive to move products, and poor infrastructure within archipelago causes logistics headaches. The climate in Indonesia also means there is a real need for innovation in packaging.

Cities in Indonesia suffer from infrastructure challenges that are unimaginable in other parts of the world. Enormous and booming populations create congestion at large scale and in fact Jakarta was recently named as having the worst traffic in the world, and Surabaya is not far behind.

There’s more.

Traditional media continues to dominate the advertising world, with TV being the primary channel influencing purchasing decisions. Online shopping, while increasing, suffers from a trust issue. Many Indonesians do not have credit cards and financial inclusion in rural areas is very low. By far, most Indonesians prefer cash transactions or bank transfers as methods of payments. This makes online commerce a hard nut to crack.

But… Jakarta has huge potential

There is huge potential for growth in retail landscape of Jakarta. Its population is predicted to exceed 16 million by 2020 and an increasing proportion of those are poised to be middle income consumers who will be influencing the digital habits of the country’s 250 million inhabitants. For these, price will become less of a factor than product quality and trustworthiness.

Jakarta is also highly tuned to social media. There are more than 72 million active social media users which, interestingly, is only 28 percent of the population. The city has the largest number of Facebook users globally, and there are more Tweets sent from Jakarta than any other city in the world.

The vast majority of this social interaction takes place on a mobile phone, which means Indonesians are a truly “mobile-first” community. This underscores the very real opportunity for local brands to leapfrog behaviours and the missteps made in North American cities where desktop-only browsing and poor user experience were hallmarks of the first instances of e-commerce.

Malls are the gateway to new digital experiences and consumer loyalty

There are more than 170 malls in Jakarta, and they play an important role in lives of the city’s population. Malls are places to be entertained, meet up with and hang out with friends; they are centres of air-conditioned social activity. And Jakarta’s severe congestion works in the favour of retailers who can tap into this captive audience.

Malls are in fact a brand’s gateway to introducing new digital experiences to their customers. Adopting beacons for wayfinding as well personalized offers triggered by proximity, position or brand sentiment will be a big incentive to consumers who are mobile-first and value savings the way Indonesians do.

Add to this to the fact that there is clear evidence that brands who only offer online commerce aren’t keeping customers loyal and engaged. The rise of the click and collect model of buying online and collecting in-store, or using Go-Jek for delivery, makes physical retail experiences even more relevant to a brand’s growth.

The digital experiences Jakarta’s brands can offer in store right now

Social engagement

For marketers, the huge engagement that Indonesians have with social media is a gold mine for improving experiences for customers and engendering loyalty and at miniscule prices compared with the cost of TV advertising.

Jakarta is ready to lead the world’s retail experience