If you are not motivated to open a convenience store in Indonesia, you may want to rethink your decision.
Indonesia’s convenience stores are still seeing healthy and profitable growth continuously even in this challenging retail industry. Big players in Indonesia’s convenience store industry include Indomaret and Alfamart.
According to a report from Berkshire Hathaway, between 2019 and 2023, the retail market in Indonesia is forecast to grow by 6%. About a thousand new convenience stores in Indonesia are being built each year.
The reasons for the growth are mainly Indonesia’s competitive landscape, modern service concepts tailored to client’s needs and preferences and affordable prices.
Many entrepreneurs and business owners use franchising to enter Indonesia’s convenience store industry.
However, some choose to set up a new company from scratch. This guide will provide you with insights into setting up a convenience store in Indonesia.
How to Start a Convenience Store in Indonesia
There have been laws and regulations related to setting up a convenience store in Indonesia. These regulations include the location limitations, construction limitations based on the distance between the road and the store, and others.
Apart from the mentioned restrictions, you need to consider the licenses required to set up a new convenience store.
Licenses For Indonesia’s Convenience Store Setup
You will need several licenses to start and operate your convenience store in Indonesia:
1. BPOM license
Having this license means that the food and beverage products that you sell at your convenience store have met the Indonesian health standards. It allows you to distribute large-scale food and beverage products in the country.
2. PIRT license
A PIRT license is a household industry license that gives your convenience store permission to operate business activities on a small scale such as selling groceries.
Other than obtaining the license, convenience stores in Indonesia must comply with the following requirements:
- Have a particular area for stocking of products purchased from traditional or small-scale retailers
- The maximum number of outlets is limited to 250. You can only open more than 250 convenience store outlets with the use of the franchise model.
A Hassle-Free Solution: Opening a Franchise Instead
Many business owners choose franchising for expanding their convenience store business in Indonesia, instead of opening a new one.
This is mostly due to the 250 outlet limitation for new convenience stores. Under Regulation 71/2019, there is no limitation of outlets for most franchise businesses in Indonesia.
In addition to the freedom of opening up as many outlets as you can through franchising, many business owners choose franchising over starting a new company because of the setup costs.
Franchising does not use a lot of capital in terms of setup, marketing, and advertising. A franchisee only needs to pay a one-off initial franchise fee and royalties.
You may need to purchase the franchisor’s specific products or services to start the franchise business as well.
However, if you want to start a convenience store from scratch, you will have to go through a more complicated and costly procedure to secure many types of licenses and permits.
Establish a Convenience Store or a Franchise in Indonesia with Cekindo
Cekindo has a team of talented professionals who can guide you through setting up Indonesia’s convenience store.
Our advisors will take care of the entire formalities, following the Indonesian laws. We also bring you potential franchisees insights and a directory of available franchise opportunities for opening a franchise of your Indonesia’s convenience store.
Are you looking for a secure franchise convenience store in Indonesia with repeat business? Cekindo can help you obtain a competitive edge to scale your company.
Do reach out to us if you want to establish a convenience store or franchise in Indonesia. Fill in the form below.