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Why 7-Eleven Totally Failed In Indonesia

Culture

Why 7-Eleven Totally Failed In Indonesia

With 60,000 stores across the world, 7-Eleven is the undisputed King of Convenience stores.

Except in one place.

Indonesia.

7-Eleven could only survive 8 years in the Indonesian market, despite retail stores being one of the highest growth sectors in the Indonesian economy.

Let’s explore 7-Eleven’s meteoric rise and fall in Indonesia…

The New York Times

The 7-Eleven chain first landed on Indonesian shores in 2009. Traditionally, it was a place to buy cigarettes, snacks, and slushies.

While the Indonesian 7-Eleven provided all of that, it became a social hub all of its own.

IDN Times

Popular with 18-25 year-olds, it was a one-stop-shop for free Wi-Fi, socializing and – crucially – cheap alcohol.

This lead to the rapid growth of 7-Eleven in Jakarta and surrounding cities.

The New York Times

2010 – 21 Stores

2012 – 100 Stores

2014 – 190 Stores

Sales peaked this year, with $78.2 million revenue.

Mini Me Insights

There was one problem. Competition in the sector was huge.

In 2007, 3 years before 7-Eleven entered Indonesia, there were already 12,000 retail stores across the archipelago. By 2016, there were 40,000.

Mini markets were the fastest growing segment in the sector.

By 2017:

Alphamart Had 10,000 Stores = 38% Market Share

Indomaret Had 15,000 Stores = 47% Market Share

7-Eleven Had 190 Stores = 0.7% Market Share

CNBC

The downfall of 7 Eleven in Indonesia can be pinpointed in 2015, with the government banning the sale of alcohol in mini-marts.

This exercise was taken in order to “protect Indonesia’s youth” – the exact target market 7-Eleven’s growth relied on.

Just 2 years after the ban, 7-Eleven closed all it’s stores.

South China Morning Post

Watch CNBC’s informative investigation on the decline of 7-Eleven in Indonesia:

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