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:
