Indonesian modest fashion brands expect sales growth up to 50pct in Ramadan, down from 300pct high

Photo: Courtesy Anggia Handmade / Facebook

JAKARTA – To keep up with competition amid a flagging retail clothing market, Indonesia’s modest fashion companies are offering two-for-one promotions and discounts of up to 50 percent during the country’s busiest shopping season of the year, but these will still not be enough to ring in the same levels of growth as in previous Ramadans. 

This week the head of Indonesia retail employers association told Salaam Gateway that retailers are expecting expenditure on clothes to triple during Ramadan but for modest fashion companies, which are typically smaller outfits, the outlook is not as rosy.

Growth in Indonesia’s clothing sales plunged as low as 18 percent in February and April this year compared to the same months last year, even as the country’s overall Retail Sales Index has maintained double-digit growth year-on-year, according to data from Bank Indonesia.

With flagging clothing sales overall, the Ramadan season is the opportunity for all retailers to cash in.

MID- TO HIGH-END

Muse 101, which describes itself as a ‘modest fashion concept store’ was averaging increase in sales of 200-300 percent during 2011-2014’s Ramadan seasons. Sales slowed last year amid the overall economic slowdown and for this year they are not expected to climb higher than 50 percent despite special offers and promotions, which include a gift payback (typically involving vouchers or in-store merchandise as gifts) for purchases of 500,000 rupiah and higher, and midnight sales, owner Temi Sumarlin told Salaam Gateway.

“We sell casual wear for 200,000 rupiah ($15) to 250,000 rupiah and hijabs for 75,000 to 150,000 rupiah. But sales this year will only rise by 50 percent due to tight competition, more modest fashion sellers and slowing purchasing power,” said Sumarlin.

She explained that her customers are spending less due to priorities elsewhere. “There is a rising need [to spend on] children’s education costs after Eid,” she said.

Outside the special Ramadan season, Muse 101 sells 20 to 30 pieces of modest wear per month, with prices ranging from 200,000 to 7 million rupiah. It currently operates three outlets in Jakarta and Bandung.

HIGH-END

Anggiasari Mawardi, owner of Anggia Handmade, conservatively estimates a 10 percent rise in sales for her business during Ramadan.

“We very rarely hold sales programs. But we do run them during Ramadan and Syawal as well as at the end of the year. Last year we held a discount program of up to 70 percent, with unique themes like Cinderella or Lady Rose,” said Mawardi.

Anggia has been holding a buy-one-get-one free offer during Ramadan this year.

The company normally sells up to 4,500 pieces a year, with prices ranging between 750,000 ($56) to 3.5 million rupiah. The business earns an annual turnover of around 3 billion rupiah, said Mawardi.

Anggia Handmade sells online and from its outlet in Bandung. It is also found on shelves in other modest fashion stores of 13 fellow designers in Indonesia and in an outlet in the Malaysian southern state of Johor Bahru.

Bigger names in the industry are also leveraging the Ramadan season to increase sales. Dian Pelangi, one of Indonesia’s best-known modest fashion designers, told Salaam Gateway that Ramadan is an opportunity for her business to make up for flagging sales during other months.

She doubles her stock for Ramadan, extends discounts of up to 50 percent and offers gift cashbacks to gain higher margins.

Her eponymous brand currently retails in 14 exclusive stores in 13 cities in Indonesia and Malaysia.

EXPANSION

But even as growth in domestic sales has dipped since last year, both Muse 101 and Anggia Handmade are not standing still.

Muse 101 is preparing for new stores in Surabaya, Sumatra and Borneo, and it is also eyeing the launch of an online store to reach customers in the middle and upper market segments, said Sumarlin.

Bigger plans farther from home include the possibility of stores in Europe that would need an estimated initial investment of at least around 1 billion to 2 billion rupiah, Sumarlin said. She cites Switzerland and Britain as potential markets.  

Anggia Handmade is similarly looking overseas, after receiving orders amounting to 50 pieces from Switzerland and Malaysia at a trade expo in Indonesia last year. The orders, according to Mawardi, were for custom-designed modest fashion pieces ranging from 30 million to 50 million rupiah per item.

“When we attended Istanbul Modest Fashion Week in May, customers from Turkey were also interested in our designs, but they want our representative store in Turkey. We are working with Modanisa, Turkey’s local modest fashion e-commerce store,” added Mawardi.

She is also keen to expand into Singapore by the end of this year. Rental costs will be around 1 billion rupiah, she said.

“In conjunction with our fifth-year anniversary, we will open a new store in Singapore and launch with 100 pieces of batik fashion. We have three other investors, one of whom is from Singapore. We want to sell batik that will suit the young generation and Chinese consumer in Singapore,” she said.

($1 = 13,235 Indonesian rupiah)

(Writing by Emmy Abdul Alim)

© SalaamGateway.com 2016