Retail sales in Indonesia fell at a slower pace of 14.6per cent on annual basis in March, compared with an 18.1per cent fall in February, a central bank survey showed on Tuesday.
Stronger fuel sales were supportive, although sales of clothes and recreational amenities continued to show drops during the month, the survey showed.
Bank Indonesia, which had forecast a 17.1per cent drop in sales in March, is predicting a 9.8per cent increase in April.
Ooredoo today announced that its Indonesian operating company, PT Indosat Tbk. (“Indosat Ooredoo”), has signed a sale and leaseback agreement with PT EPID Menara AssetCo (“Edge Point Indonesia”) for more than 4,200 telecommunications towers.
PT EPID Menara AssetCo is an Indonesian subsidiary of Edge Point Singapore, which is wholly owned by Digital Colony, a leading global digital infrastructure investor with extensive experience owning and operating cellular towers.
Indosat Ooredoo has agreed to sell this portfolio of towers in a transaction valued at USD 750 million, including a supplementary offer, making it one of the largest deals of its kind in Asia. The sale will unlock capital to create value for shareholders and continue to build Indosat Ooredoo’s strong growth momentum through improvements to network performance and the launch of innovative new digital solutions to enhance the customer experience.
The sale is part of Ooredoo Group’s strategy to move to a more efficient and flexible asset light model and unlock the trapped value of its infrastructure portfolio. Prior to this deal, Ooredoo had a global portfolio of approximately 27,000 owned towers, representing an infrastructure portfolio of significant value for the Group. Monetising these assets to create more value for both shareholders and customers is a key focus of Ooredoo’s current strategy.
Aziz Aluthman Fakhroo, Managing Director of Ooredoo Group, said: “Congratulations to Indosat Ooredoo on this sale and leaseback agreement with Edge Point Indonesia, which aligns perfectly with our new strategy and its focus on creating more value for shareholders and customers. This strategy incorporates a shift towards an asset-light model that will help us unlock significant capital and enable us to focus on our core mission of delivering outstanding digital and enterprise services to our customer base. I extend our gratitude to the Government of Indonesia for its progressive policies that leave a positive impact on the industry, its operators and its people.”
Edge Point Indonesia was declared the winning bidder of a competitive tender process conducted by Indosat Ooredoo. The transaction is expected to close in Q2 2021 subject to customary conditions, including shareholder approval by Indosat Ooredoo at an EGM, which is planned to be held on May 6th. Indosat Ooredoo will lease back space on the towers for a period of 10-years to meet its ongoing requirements.
President Director and Chief Executive Officer of Indosat Ooredoo, Ahmad Al Neama, added: “I am delighted that Indosat Ooredoo has agreed this deal, which furthers our strategy to create more value from our infrastructure assets. The deal marks the third and final sale of assets from our high-quality tower portfolio and continues our transition into a leading digital telecoms company. We are confident the leaseback agreement, with its attractive terms, will continue to meet our ongoing tower needs, while the capital that we have unlocked will provide further fuel to power our growth momentum. Indosat Ooredoo and Edge Point Indonesia will work closely together going forward and build a strong and long-lasting strategic partnership.”
The MENA deal is actually an extension to the current retail agreement Ted Baker has with Al-Futtaim Group but adds in new e-commerce and wholesale rights for the region. The all-new 10-year Indonesia dealx has been signed with PT Mitra Adiperkasa (MAP) for the retail license.
The fellow-10-year Al-Futtaim agreement now means MENA will be Ted Baker’s first full omnichannel territory operated by a license partner. The complete integrated package across retail, digital and wholesale channels “is a key pillar of the group’s three-year transformation plan… which is designed to deliver a more profitable, more cash generative and higher return on capital employed business”, Ted Baker said.
Al-Futtaim currently operates 24 Ted Baker stores and concessions across Bahrain, Egypt, Qatar, Saudi Arabia, and UAE. The addition of e-commerce and wholesale rights will aim to further strengthen the customer experience of the brand in the region, they said. Specific benefits to customers will include alignment of pricing and promotions across channels, and an improved e-commerce proposition with shorter delivery times, and ship-from-store and click-and-collect services.
Meanwhile, under the terms of its retail and selective digital rights agreement, MAP has “committed to an ambitious store and concession opening plan and will sell via selective online platforms in Indonesia”. This expanded distribution will build brand awareness in the Asian region alongside the five other license partners and the group’s China JV, Ted Baker noted.
Following these new license agreements, Ted Baker will have 17 retail license partners and 20 product license partners across the globe.
Helen Costello, Group Commercial and Business Development Director at Ted Baker, said: “Having worked with the Al-Futtaim team for many years, we know they have an excellent understanding of Ted Baker and our customers. Al-Futtaim’s experience also means that they are particularly well-placed to fully realize the significant growth potential from the accelerating consumer shift to online channels in the region”.
She added: “MAP is the leading retail expert in Indonesia, and they have the right team and experience in place to build on the strong foundations that are already in place. It is a testament to the strength of our brand that we continue to partner with the leading experts in their relevant categories across the world”.
The fund, which currently has around $15 billion in assets, is targeting to grow to $100 billion.
Ridha Wirakusumah, who has been CEO Indonesia’s Bank Permata since 2017, will become the chief executive officer of the country’s new strategic development sovereign wealth fund, the Indonesia Investment Authority said in an announcement on Tuesday.
Wirakusamah has held a number of leadership positions in his career, including president and CEO of AIG Consumer Finance Group Asia, Asia Pacific president and CEO at AIG, president CEO for AIG Finance (Hong Kong), head of corporate finance at Banker Trust Indonesia, APAC CEO at General Electric and head of banking at GE Money Asia.
We want INA to reduce the gap in domestic funding needs and development financing, and provide development financing, especially for national infrastructure,» Indonesia President Joko Widodo said in a briefing on Tuesday.
The Indonesia Investment Authority’s slate of executives includes Arief Budiman, a former director of oil and gas giant Pertamina, who will serve as deputy CEO. Also joining the fund is Stefanus Ade Hadiwidjaja, previously with private equity firm Creador Capital Group, who will be director of investment.
Marita Alisjahbana of Citibank Indonesia will be director of risk, while Eddy Porwanto, formerly the chief financial officer of flag carrier Garuda Indonesia, joins as director of finance, the announcement said.
Retail sales in Indonesia dropped 16.3% year-on-year in November following a 14.9% fall a month earlier, a central bank survey showed on Tuesday.
Sales of telecommunication types of equipment and other household goods contracted in November, the survey showed.
The survey also forecasts an even deeper contraction of 20.7% in December.
Beauty technology company Social Bella announced its first overseas expansion with the launch of the beauty e-commerce platform Sociolla in Vietnam.
Demand from beauty enthusiasts in Vietnam was one of the company’s considerations, following a US$58 million funding from investors, such as Singaporean state investment fund Temasek and its private equity subsidiary Pavilion, alongside Singaporean venture capital firm Jungle Ventures.
The beauty and self-care market in Vietnam has stayed robust and adaptive amid the COVID-19 pandemic, a website on cosmetics and the personal care industry. The beauty sector in Vietnam has seen rapid growth in online sales.
Christopher Madiam, cofounder and president of Social Bella, said the company was excited to expand its market internationally. “As one of the fastest-growing beauty and self-care markets in Southeast Asia with a population of a digitally literate young generation, Vietnam bears a resemblance to Indonesia,” Christopher said in a statement. “We’re certain that Vietnam is the right country for our first international expansion.”
John Rasjid, cofounder and CEO of Social Bella, said the company intended to provide access for Indonesian beauty brands to consumers abroad through the expansion. “We’ve witnessed how local beauty brands are getting innovative in releasing quality yet affordable products that can compete with international products,” John said. “With the expansion, we’re not only opening distribution access, but we’re also giving comprehensive support to ensure that their products receive a warm welcome in Vietnam. We are collaborating with a number of our local partners to support a holistic business growth plan in Vietnam.”
ESQA is among the Indonesian brands Sociolla brings to Vietnam. Cindy Angelina, the cofounder of ESQA Cosmetics, said the firm was proud to be part of the expansion. “We’ve experienced significant growth since joining Sociolla in April 2017. Hopefully, this success will continue in Vietnam,” Cindy said.
Established in 2015, Social Bella has several business units, including offline stores under the Sociolla brand, Beauty Journal, and Lilla by Sociolla. In July, the company appointed renowned Indonesian make-up artist Archangela Chelsea as the makeup director of Sociolla.
The Singapore-based digital wealth engagement solutions provider has its sights on the retail and affluent banking segments in Indonesia.
New Wealth has inked a strategic partnership with digital engineering firm HAXtech to distribute its solutions to banks, insurance, and fintech firms in Indonesia, the company announced in a press release on Friday.
The partnership promises improved market access, faster project delivery, and enhanced in-country client support, New Wealth said in the announcement.
CEO Löic Pitrou said the company is currently expanding its ability to deliver multiple digital finance projects in Indonesia to support the fast-growing digital savings and wealth management sector there.
Pitrou, a digital finance strategy and Robo-advisory specialist, founded New Wealth company in 2018. Its senior management team includes head of the experience lab Sudhir Nain and chief technology officer Simon Mazas. The company provides sales and advisory tools and applications for both relationship managers and self-directed investors.
Its clients and partners include Commonwealth Bank, Standard Chartered, Morningstar, Eastspring, and Savio, according to its website.
AirAsia’s founder Tony Fernandes is building what he hopes will be the region’s next “super app” as he deals with the coronavirus travel downturn. He wants to rival the likes of Grab, GoJek, and WeChat with an all-in-one app for food delivery, shopping, payments, entertainment, and travel. As the airline’s boss, he has been looking at new ways to generate income while his planes were grounded. AirAsia has struggled during the pandemic and cut 30% of its staff.
Mr. Fernandes said he has spent his time during the travel slump improving the AirAsia app and the company’s payments platform BigPay.
“The downturn was a blessing in disguise in some ways as it allowed us to focus more on it. Running an airline takes up a lot of our time but we have been given the opportunity and time to focus on our digital business.”
AirAsia already has a “rich database” of over 60 million users as its starting point. The AirAsia app, which also offers users a messaging service, has set its sights on super apps like Singapore-based Grab, Indonesia’s GoJek, and China’s Meituan.
“AirAsia has always been a digital company. We were one of the first airlines to sell online. It’s in our bloodstream,” added Mr. Fernandes, who is also a major shareholder of English football club Queen’s Park Rangers (QPR).
“I know a super app sounds like a lofty target but Grab and GoJek also started out small as food or mobility apps. Plus people also questioned me the same way when I said I wanted to start AirAsia.”
Mr. Fernandes’ airline has now grown to become Asia’s biggest budget carrier. Last year AirAsia launched its own record label called RedRecords in partnership with Universal Music. The aim is to discover stars from South East Asia who will appeal to a Western audience. The first major signing, Thai pop star Jannine Weigel, has already built up millions of followers across social media.
“Boy have we got something special with the record label. The Koreans have shown how Asian music can appeal to a global audience with K-pop and there is huge potential for southeast Asia.”
“This also helps us engage with a younger audience and gives lots of content for our app.”
June Indonesian retail sales fell 17.1 percent over the same month last year – but that decline was slower than during the previous month.
According to data from the country’s central bank, retail sales fell by 20.6 percent in May, as the Covid-19 pandemic forced store closures and consumers stayed home.
Sectors to show improvement were food, beverages & tobacco, along with communication services.
The Bank Indonesia is expecting the decline in Indonesian retail sales to further slow in July, to 12.3 percent.
Retail sales in Indonesia have fallen by 16.9 percent during the month of April compared to last year, according to government data.
The drop is the steepest within the territory in 14 years and is the result of a steady decline in retail sales of a range of products surveyed by the Indonesian central bank.
The decline is 4.5-per-cent deeper than comparable figures for the previous month, while retail sales in Indonesia declined by a more modest 0.8 percent during February.
Even worse figures are expected for May, however, as the advent of Covid-19 saw people forced to implement social distancing.
The Bank Indonesia now predicts sales figures to show a heavy 22.9-per-cent fall in volume year on year for last month.
Indonesia AirAsia has been forced to halt its growth plan for this year, as a result of the coronavirus pandemic and economic challenges faced by Indonesia.
The plan for 2020 was for the low-cost carrier to increase its market share by adding three new aircraft and launching new services, having recorded a 28% growth in revenue for 2019 as compared to 2018, says parent company AirAsia Indonesia.
The viral outbreak has led to travel restrictions imposed by neighboring countries and is affecting the demand for domestic and international air travel. AirAsia Indonesia says that Indonesia’s “economic situation has become more challenging”, noting that the exchange rate for rupiah against the dollar is now at more than Rp16,000 ($0.97), and it continues to fluctuate.
“By considering these factors carefully and deeply, the company is forced to suspend international and domestic flights until the situation improves, and demand for air travel picks up. The measure will certainly have a significant influence on the company’s operating and financial performance in the first half of 2020,” says AirAsia Indonesia.
Indonesia AirAsia suspended operations on 1 April. Domestic flights are suspended until 21 April and international flights until 17 May.
Meanwhile, AirAsia Indonesia’s plan to resume trading on Indonesia Stock Exchange (BEI) by offering new shares to the public was also affected, although it did not offer any other details.
It was suspended from trading in August 2019 for not complying with BEI’s requirement for a company to have at least 7.5% of its paid-in capital available as free float in order to remain listed. As of 29 February, it only had 1.6% of shares available for trade.
AirAsia Indonesia’s priority for the group over the next six months is to reduce its operating cost base by renegotiating with suppliers and key stakeholders, and to ensure that it can continue to operate during this period, it says. This will then be followed by working to “restore” its finances after the outbreak is declared over.
Governments across Asia Pacific are being urged to protect more than 320,000 duty-free and travel-retail industry jobs at risk during the coronavirus pandemic.
The Asia Pacific Travel Retail Association claims that the jobs in the US$36 billion industry may be overlooked by politicians devising financial rescue measures to deal with the economic fallout of the pandemic. It is asking governments to support the industry along with airlines, airports and maritime businesses.
In a special report, the association outlines the industry’s almost $15 billion contribution to GDP across Asia Pacific.
“Airport retail and commercial services, including food and beverage, constitute a crucial business sector providing up to 60 percent vital commercial income for airport owners, outpacing aeronautical revenue streams,” read a statement issued by the association.
“It is the most significant direct contributor to the investment in Asia-Pacific’s aviation infrastructure and ongoing development of world-class national gateways, the region’s hubs to the world.”
“The dynamics of duty-free and travel retailing are intrinsically linked to the aviation and maritime industries and its viability is entirely dependent on the return in passenger traffic,” said association president Grant Fleming.
“This means 320,000 jobs are at risk that could be safeguarded if governments extend financial support packages to the industry.”
Singapore investment firm OUE has acquired a majority stake in the parent of Indonesia’s Maxx coffee chain, which also operates in Singapore.
According to the agreement, OUE’s wholly-owned subsidiary Oddish Ventures will buy an 88.43-per-cent stake, worth US$23.1 million from two companies – Inti Anugerah Pratama and Ciptadana Capital – which own 45.64 percent and 42.79 percent of the Maxx Coffee Prima’s issued shares respectively.
OUE reported that the acquisition was valued based on various factors, including the high barrier of entry into the Indonesia food-and-beverage market, the opportunity for additional revenue stream through franchising, and Maxx Coffee’s access to prime retail locations in Indonesia.
With the acquisition, OUE hopes to scale up and optimize its existing food-and-beverage portfolio, the company said in a statement.
Founded in 2015, Maxx Coffee has more than 75 outlets in Indonesia and Singapore.
South Korean beauty company Amorepacific Group is set to launch the Etude brand in Indonesia.
The firm has partnered with local lifestyle retailer PT Mitra Adiperkasa Tbk (MAP) to boost the growth of its business in the territory.
MAP plans to expand Amorepacific’s presence beyond Jakarta and across Bali, Surabaya and Bandung, giving more local customers better accessibility to the Etude brand, as well as Amorepacific’s other global brands such as Sulwhasoo, Laneige and Innisfree.
“We are looking forward to working with MAP, the largest retailer in Indonesia to unlock the enormous potential the country has to offer,” said Amorepacific Group president Dong-hyun Bae.
“With their expertise in retail, MAP and Amorepacific’s global brands are expected to create a great synergy and thereby provide the best quality service to the customers in Indonesia.”
In celebration of Lunar New Year 2020, new-age carrier Vietjetofficially commences its newest direct route linking Hanoi and Bali, Indonesia on the second day of Lunar New Year. This is Vietjet’s second service to the popular holiday destination, following the Ho Chi Minh City – Bali route that has been in operation from May 2019. It is also the first direct route departing from Vietnam’s capital city to Bali.
Speaking at the opening ceremony, Chairwoman of Vietjet’s Board of Directors Nguyen Thanh Ha said, “Vietjet was founded with a pioneering mission to connect the skies. We are proud to be the first airline to operate direct flights between Hanoi and Bali. The new route, operated from the second day of the Lunar New Year, will meet the New Year’s travel demand of the locals and international travelers with less travel time and cost. Not only connecting the two most attractive cultural tourism destinations in Asia, the Hanoi – Bali route will also further promote cooperation between the countries in ASEAN.”
The Hanoi – Bali route operates daily return flights from 26 January 2020. The flight departs from Hanoi at 10.00 am and arrives in Bali at 4.25 pm. The return flight takes off from Bali at 5.30 pm and lands in Hanoi at 9.55 pm. All are in local times.
As Vietnam’s capital city, Hanoi offers an unforgettable vacation with its rich history. Founded more than one thousand years ago, tourists will be astonished by Hanoi’s architecture and colonial facades. Bali, one the most popular island destinations in Indonesia and all of Asia, is often called “The Island of the Gods” and often described as a tropical paradise. Voted as one of the best islands in the world, Bali is a destination of pristine, beautiful landscapes and unique cultural charms.