Indomaret is one of Indonesia’s most recognizable household brands. Since opening its first store in Ancol in 1988, it has evolved from a simple neighborhood shop into a retail titan with over 22,000 outlets across the archipelago.
Central to this explosive growth is its highly refined franchise business model. By blending corporate infrastructure with local entrepreneurship, Indomaret has successfully dominated the "convenience" niche in Southeast Asia’s largest economy.
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| Indomaret |
1. The Core Philosophy: "Easy and Cheap"
Indomaret’s business model is built on the motto "Mudah dan Hemat" (Easy and Economical). The strategy focuses on two primary pillars:
Hyper-Localization: Placing stores within walking distance of residential areas, transit hubs, and office buildings.
Standardized Experience: Whether in a bustling Jakarta street or a quiet village in Kalimantan, customers expect the same lighting, product layout, and air-conditioned comfort.
2. The Franchise Mechanism
Indomaret operates a Business Format Franchise. This means the franchisor (PT Indomarco Prismatama) provides a turnkey system, including the brand name, supply chain, and operating procedures, while the franchisee provides the capital and location.
Investment Breakdown (2025/2026 Estimates)
Starting an Indomaret typically requires an initial investment of approximately IDR 494 million (excluding property rental/purchase). This generally covers:
Franchise Fee: ~IDR 36 million for a 5-year license.
Promotional & Opening Costs: ~IDR 9.5 million.
Equipment: ~IDR 227 million (fridges, shelves, POS systems).
Renovations: ~IDR 221.5 million (standardizing the building layout).
Revenue Sharing & Royalties
Unlike many Western franchises that take a flat percentage of gross sales, Indomaret uses a progressive royalty system based on monthly turnover:
| Monthly Turnover (IDR) | Royalty Rate |
| :--- | :--- |
| Up to 175 Million | 0% (Royalty Free) |
| 175M – 200M | 2% |
| 200M – 225M | 3% |
| Above 225 Million | 4% |
This tiered structure is designed to help new or lower-performing stores remain profitable while allowing the franchisor to benefit from high-volume locations.
3. Key Success Factors
Integrated Supply Chain
The "secret sauce" of Indomaret is its logistics. With over 37 distribution centers nationwide, the company manages the inventory of over 5,000 product types. Franchisees don't have to worry about sourcing; they order through an automated system, and Indomaret trucks deliver the goods.
Service Diversification (O2O Strategy)
Indomaret is no longer just a grocery store. It has transformed into a service hub offering:
Financial Services: Utility bill payments, train/plane ticket bookings, and insurance premiums.
Digital Integration: Through Klik Indomaret and partnerships with delivery apps like Grab and Gojek.
Private Labels: Offering high-margin house brands (Indomaret tissue, snacks, water) that compete with national brands on price.
Rigorous Site Selection
Indomaret’s team conducts a deep feasibility study before approving any location. They analyze traffic flow, local population density, and proximity to competitors (often the "duopoly" rival, Alfamart) to ensure the store will meet its ROI targets, which usually span 3 to 4 years.
4. Challenges and Outlook
Despite its success, the model faces challenges:
Market Saturation: In major cities, Indomaret stores are often located just hundreds of meters apart, leading to potential "cannibalization" of sales.
Regulatory Hurdles: Local government zoning laws frequently change, limiting the number of minimarkets allowed in certain districts to protect traditional markets (Pasar Tradisional).
Digital Competition: The rise of e-grocery apps requires Indomaret to constantly innovate its loyalty programs (Indomaret Poinku) to keep customers returning.
Conclusion
Indomaret’s franchise model is a masterclass in scalable retail. It empowers local investors with a "proven recipe" for success while allowing the parent company to expand without the massive capital expenditure of owning every storefront. For the Indonesian consumer, it has become an indispensable part of daily life.