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CHECK OUT THE PHOTOS OF Jakarta's retail scene

Indonesia, the largest economy in Southeast Asia and the fourth most populous country globally, with 289 million inhabitants, consistently maintains robust GDP growth, often hovering around 5% annually in recent years. Economic indicators such as stable inflation, manageable public debt ratios, and growing foreign direct investment reflect a healthy macroeconomic environment. The country’s strength lies in its abundant natural resources, diverse manufacturing base, and rapidly expanding service and digital sectors, supported by a large, youthful population driving domestic consumption.

And yet, the retail market remains relatively unknown to foreigners. Retail contributed 10.7% of the national GDP and is expected to reach a total sales value of USD 242bn by 2024. E-commerce, which represented 11.5% of total retail sales in 2022, is expected to reach 21.8% by 2027, following the COVID-19 pandemic-induced acceleration. Thanks to an increasing omnichannel approach, retail is expected to grow at a 4.7% CAGR through 2030, opening many opportunities for national and international players. This IADS Exclusive is the first about Indonesia. It aims to provide a preliminary understanding of one of the leading national players, Metro Indonesia, following a one-day IADS market visit in June 2024.

A regional history: from Indonesia to Singapore, to Indonesia again

Metro’s roots date back to 1953, when Mr. Ong Tjoe Kim, an immigrant from Fujian (China), founded the very first Metro store in Surabaya, the second-largest city in Indonesia. He had learned the ropes at the Toko Dezon department store, where over 25 years he rose from a junior position to become the manager of seven branches. Passionate about Hollywood, he named his company after the MetroGoldwin-Mayer film studio.

Quickly realising the potential of the Singaporean rapidly modernising economy and eager to make the most of an emerging middle class keen to embrace new styles, he moved to the city-state and opened his first Singapore-based outlet in 1957 on a site that is now the Singapore Treasury Building. A new store was opened on the famous Orchard Road in 1965, at the Liat Towers, and was relocated in 1973 nearby on Scotts Road and renamed Metro Orchard. That same year, the company was listed on the Singaporean Stock Exchange and expanded into new areas.

The company entered real estate, construction and building, supermarkets, software and banking. On the retail side, new stores opened: the Metro Golden Mile store in 1974, the Metro Grand at Lucky Plaza in 1978 (the first luxury department store with branded shop-in-shops), and suburban locations: Tampines in 1996, Causeway Point and Woodlands in 1998, Sengkang in 2002. More central locations were opened at City Square in 2009 and Paragon in 2014. Since then, most of the stores have been closed (Tampines in 2007, Sengkang and City Square in 2015, and Centrepoint in 2019), and today, Metro only operates Paragon and Causeway Point in Singapore. Despite this downturn, Metro had established itself as a Singaporean household name over 60 years, recognised for its department stores that offer clothing, cosmetics, household goods, and accessories under one roof.

While overseas operations were also undertaken (Metrojaya in Malaysia in 1976 as a joint venture, with the stakes later sold, Metrocity in Beijing in 2007 after several real estate projects conducted in China), it is notable that the company re-entered Indonesia in the early 1990s, when the country was experiencing its own consumer surge. At the time, Indonesia’s economy was on an upswing under Suharto’s New Order government. Urbanisation and rising disposable incomes made major cities like Jakarta attractive destinations for international and regional brands. Although Indonesia had a tradition of local retail, the market was not yet saturated with foreign players, with room for an upscale department store chain that could introduce a curated range of international and local brands presented in a comfortable, contemporary environment.

In 1991, Metro took the leap and opened its first Indonesian store at Jakarta’s Pondok Indah Mall, a shopping centre that soon became a symbol of affluent suburban retail culture. Located in an affluent residential area of South Jakarta, the mall catered to a clientele ready to embrace international retail concepts. Rather than simply replicating the Singapore model, Metro localised its merchandise mix and ambience in a 93,000 sqm store focusing on offering quality apparel, cosmetics, homeware, and accessories that appealed to a growing Indonesian middle and upper-middle class.

This successful start encouraged Metro to expand further at Plaza Senayan, a landmark mall opened in 1996. Known for its high-end positioning, Plaza Senayan mirrored the upscale department store environment that Metro sought to cultivate. The synergy between Metro’s brand identity and these premium shopping complexes fostered a favourable retail ecosystem, where customers could expect attentive service, a broad selection of international brands, and a pleasant overall shopping experience.

As it expanded, the company diversified its product portfolio. Beyond high-quality apparel, the stores became known for their curated cosmetics and fragrance sections and home and living departments. This diversification was vital as it positioned Metro as a lifestyle destination, a one-stop shop for various categories of goods, appealing to a broad spectrum of customer preferences.

The late 1990s, however, brought challenges as the Asian Financial Crisis of 1997-1998 severely impacted Indonesia’s economy, weakening the rupiah and eroding consumer confidence. Although it targeted middle and upper markets severely affected by the crisis, Metro weathered the storm by focusing on careful inventory management and customer experience.

By the early 2000s, Indonesia’s economy began to recover. The middle class regained purchasing power, and shopping malls proliferated across Jakarta and other major cities like Surabaya, Bandung, and Makassar. Metro seized this renewed momentum by partnering with reputable mall developers and opening new stores: Bandung Supermal (2001) and Mal Taman Anggrek (2002).

To further support development, Metro Holdings, based in Singapore and licensing its name to its Indonesian subsidiary (Metro Indonesia), signed a franchise agreement with CT Corp, an Indonesian company originally rooted in finance and banking. In 2010, CT Corp also signed a deal with Carrefour, acquiring 40% of Carrefour Indonesia operations (fully acquired by 2013). Revenue from hypermarket activities allowed CT Corp to open new stores: Makassar (2010), Ciputra World (2011), Gandaria City in Jakarta (2012), and Solo (2013), solidifying Metro’s status as a national Indonesian retail name.

In 2019, Metro Holdings divested Metro Indonesia for € 17.7 m and licensed the name to CT Corp, which acquired all stores. The company overcame COVID-19 hurdles by launching an online shopping platform based on WhatsApp, “METRO Easy Shop.” The CEO of CT Corp continued investing, seeking to capitalise on the crisis by acquiring locations of failed competitors, such as Parkson Centro department stores, which were liquidated in 2021.

Today, Metro Indonesia operates 15 stores, six of which opened between 2021 and 2022. The target is to reach 24 stores in the mid-term to gain scale. Retail represents 15% of CT Corp’s total business; within this category, Carrefour-related activities represent 95% of the revenue. The privately owned company’s total turnover remains confidential.

While it is easy to confuse Metro Indonesia with its Singapore counterpart, a similar confusion arises with the Philippines, where the Metro Retail Stores Group is entirely unrelated.

Department store competition in Indonesia includes SOGO, Seibu, and Central (all strong in houseware and cosmetics, where Metro also excels). Specialty retailers (often mistakenly considered department stores) include Matahari (which sells shoes and fashion but not home or cosmetics, achieving 35% of its turnover through private labels) and Ramanaya, which is more mass-oriented than Matahari.

Navigating Jakarta

Jakarta is a sprawling metropolis (some even say overwhelming) composed of distinct districts that reflect varied social, economic, and cultural dimensions. The city is structured around business hubs, upscale neighbourhoods, and emerging lifestyle centres. Each area attracts a particular demographic, influenced by proximity to workplaces, residential zones, and transportation links. While it is difficult to explain in a few words how the retail scene is structured, there are a few malls which are worth knowing:

• Plaza Indonesia is one of Jakarta’s most prestigious and well-established shopping centres in the heart of the city’s central business district. Adjacent to iconic landmarks and five-star hotels, it enjoys a strategic spot at the famous Bundaran HI (Hotel Indonesia Roundabout), an area long regarded as a symbol of Jakarta’s sophistication and modern development. This prime location draws a clientele of high-ranking executives, visiting diplomats, expatriates, and affluent local professionals looking for luxury designer boutiques, premium jewellery stores, and exclusive fashion houses. Metro does not operate any department store in this mall.
• Plaza Senayan, which is not far from Plaza Indonesia. Catering to a similar executive-oriented and cosmopolitan crowd, this mall features high-end fashion boutiques, gourmet restaurants, and premium lifestyle services. It attracts well-heeled professionals, expatriates, and styleconscious consumers, and overall, the mall is becoming increasingly luxurious and competitive with Plaza Indonesia. Metro operates its third-best store there, just in front of SOGO, its competitor.
• Pondok Indah Mall, located in an affluent residential district of South Jakarta, is known for its family-friendly environment. Upper-middle-class families enjoy a curated mix of international and local brands, comfortable dining options, and leisure facilities suitable for all ages. The atmosphere is relaxed. Metro operates its oldest and most successful flagship there.
• Gandaria City Mall, also in South Jakarta, occupies a middle ground. It caters to the upper class but isn't considered luxurious due to its location. It combines contemporary retail outlets with entertainment, dining, and community events, appealing to young professionals, trendsetters, and urban families seeking diverse leisure options.

Visiting Plaza Senayan

Located a mere 8 km away from Plaza Indonesia, the most exclusive mall in the country (catering to the country’s ‘old money’), Plaza Senayan is the second most luxurious mall in the country. It tends to eat market shares by attracting new brands (Kering Group labels) and a younger clientele. It comprises two department store anchors, SOGO on five floors and Metro on two floors (which used to have four floors, but the store size was reduced in 2019 to 7,900 sqm), which makes it harder for Metro to compete on variety and depth of offer. Finally, a direct connection to the Fairmont Hotel guarantees retailers access to the affluent tourists visiting Jakarta.

Due to the store size and the fact that clients went to SOGO during the closure for the renovation period, the business for Metro is complex, which explains that this store is only third in terms of performance in the whole chain, despite its high-end positioning and location. Metro focuses on ladies' designers in a highly positioned store environment to differentiate from SOGO.

The store is organised on two floors, with the ground floor dedicated to women’s fashion and cosmetics (a category where SOGO is highly competitive, even though Metro is the national leader in cosmetics) and the first floor to men’s, lingerie, and home. The kid’s category has been sacrificed due to a lack of space.

Interestingly, a rather large section of the store is dedicated to Indonesian designers, including items with a high price tag, to position the store and make the most of the international clientele. The store layout and concept are also striking, with brass-plated hangers and decor and carpets with a bold motif. Consequently, the feeling is mixed, as it evokes a slightly old-fashioned luxury store, with a profusion of glitzy elements sometimes stealing the eyes from the products. This starkly contrasts with the SOGO store, which is more aligned with current retail display trends.

The SOGO store is relatively large, with 20,000 sqm on five floors, including the ground floor dedicated to cosmetics. Their strategy includes purchasing the rights from foreign labels, such as Marks & Spencer and Sports Direct, but also Mango, Lacoste, and Ted Baker, and displaying them directly in their stores as shop-in-shops rather than free-standing stores in malls. Consequently, the feeling is rich and modern in terms of brand presence. The group that owns SOGO rights operates 17 SOGO stores, 2 Seibu stores and 1 Galeries Lafayette (in the Pacific Place mall) in Indonesia. This explains why Metro is currently in a frenzy of store openings, to compete in terms of store fleet size and, therefore, to strike more deals with brands.

Visiting Gandaria City

The Gandaria City Mall is located in an affluent zone of Jakarta, albeit less rich than Plaza Indonesia’s surroundings. As a consequence, the mall tries to differentiate through a pop-up approach allowing to display new brands, experiences, and F&B (RR Chocolates, Robbin’s Café…), international labels (H&M, Mango, Uniqlo), and a strong focus on contemporary art, with pieces of art from Yayoi Kusama, for instance, coming directly from the mall owner’s private collection.

The 10,000 sqm Metro store is organised on two floors (all Metro stores have this configuration now), with women’s on the ground floor and men’s, home and kids on the first floor (home being the best category in this store, thanks to the mall location). An interesting aspect of this store is that it offers no private labels. The whole selection of brands (national and international) is presented in a 100% consignment model (Metro perceives the payment, takes the margin and gives the remainder to the brand, which contributes only to product launches, while Metro takes care of marketing).

Being 10 years old, the store is planned for refurbishment in 2025, as it looks rather “bland”, with white flooring, high ceilings, and product zones materialised by carpets, but no specific element that allows it to give a differentiated feeling, contrary to the Plaza Senayan store. However, the Gandaria City store is known for its ability to create buzz, thanks to a mall-facing pop-up zone directly connected to the store. During the visit (June 2024), a pop-up dedicated to Korean band BTS was extraordinarily successful and cleverly channelled customers of the pop-up directly to the store as the cash desks and exit were opening directly into the store.

What about omnichannel?

Metro recognised the importance of blending offline and online retail experiences quite early. While physical stores remained central to the brand’s identity—offering a tactile and social dimension—Metro began exploring e-commerce solutions in the second half of the 2010s. By the late 2010s, many of Metro’s loyal customers appreciated the convenience of browsing merchandise online before making in-store purchases, even though it was not satisfying from a business perspective.

The COVID-19 pandemic in 2020 further accelerated the need for digital presence and operational flexibility. Like all retailers, Metro had to navigate lockdowns, shifting consumer priorities, and concerns over health and safety. Consequently, it relaunched a digital sales channel through WhatsApp, which proved nimbler and productive than the previous e-commerce website, which the new management today considers a failurei.

The visit, unfortunately, did not allow enough time to check and evaluate the processes and results achieved by Metro since the launch of this new channel.

Conclusion: the rebirth of a giant

What was striking during the visit was the clear will of the owner, CT Corp, to develop and deploy new department store units to reach scale. In the department store world, such a trend is reversed to the rest of the planet, especially in the magnitude of new store projects (from 15 to 24 at a sustained pace).

It was also interesting to visit Plaza Senayan and Gandaria City stores in the sense that they are so different that it also gives a good idea of the challenges that Metro has to face: defining a business model that truly allows producing scale economies on a national basis (a focus on private labels, international designers or entry price point international brands?), a single store concept that makes sense (which is neither the case at Plaza Senayan or Gandaria City, for different reasons), and achieve a truly omnichannel business that does not only rely on a strategic dependence towards a third-party channel such as WhatsApp in a world (and a country) where geopolitics can define the available techs from one day to another (Indonesia has recently banned TikTok e-commerce new venture and has gone into a fight with Apple and its iPhone 16, for instance).

In any case, Metro is a very dynamic company in a very dynamic country, and it will be extremely interesting to see how the business grows in the future. We are convinced that such retailers in new markets, like SM in the Philippines, are also bringing a lot of innovation in how business is conducted and customers are approached.

i: This reminds the situation in Philippines, with SM being more successful with its digital channels blending sales and social media, than its e-commerce “official” website.

Credits: IADS (Selvane Mohandas du Ménil)