The Indonesian retail sector is poised for growth until the first semester of 2024, driven by factors such as the upcoming general elections (Pemilu) and alignment with the lifestyle of the younger generation. Analyst Abdul Azis Setyo Wibowo from Kiwoom Sekuritas Indonesia predicts positive growth, especially for retailers targeting the middle to upper consumer segments. The electoral momentum is expected to boost retail issuer performance, particularly for those catering to the mid to lower market segments. Stable economic conditions and mobility factors are additional drivers, according to Azis's statement to Kontan.co.id on Tuesday (9/1). Azis anticipates an increase in consumer purchasing power until the first semester of 2024, driven by the electoral momentum. However, a slowdown is foreseen in the second semester due to limited wage increases, challenging public purchasing power.
Rut Yesika Simak, an analyst at Mirae Asset Sekuritas, notes in a January 2, 2024 research report that the retail sector operates in a fragmented market landscape, with various formats playing a crucial role in driving sustainable growth. Demographic factors like the growing middle class and shifting consumption patterns contribute to the positive outlook. Digital transformation and e-commerce are identified as supporting factors. The digital revolution has facilitated significant growth in Indonesia's retail sector. Rut expresses confidence in the continued blessings for Indonesia's retail sector, influenced by economic, demographic, technological, and cultural factors. Among retail issuers, Rut recommends buying shares of PT Mitra Adiperkasa Tbk (MAPI) with a target price of IDR 2,250 per share and suggests buying shares of PT Ace Hardware Tbk (ACES) with a target price of IDR 950 per share. Azis recommends buying shares of PT Ace Hardware Indonesia Tbk (ACES) and PT Mitra Adiperkasa Tbk (MAPI) with a potential upside of 15%. Overall, Indonesia's retail sector growth is believed to be influenced by economic, demographic, technological, and cultural factors, as stated by Rut.
