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Instant Noodles Market Indonesia: Dif cult to Compete with Indomie

indonesia-
dicult- Finance
(https://www.indonesia-
19 January 2016|
Nissin Foods Indonesia (https://www.indonesia-investments.com/tag/item31?tag=6342) , dicult-
to-
investments.com/nance/item6)
Nissin Foods Holdings (https://www.indonesia-investments.com/tag/item31?tag=6341) ,
Sribugo Suratmo (https://www.indonesia-investments.com/tag/item31?tag=6340) , to- compete-
Business
Instant Noodles (https://www.indonesia-investments.com/tag/item31?tag=6339) , (https://www.indonesia-
compete-
with-
Mie Sedaap (https://www.indonesia-investments.com/tag/item31?tag=5885) , investments.com/business/item7)
Mitsubishi Corporation (https://www.indonesia-investments.com/tag/item31?tag=4647) ,
with- indomie/item6397#)
Alfamart (https://www.indonesia-investments.com/tag/item31?tag=2164) , Culture (https://www.indonesia-
Noodles (https://www.indonesia-investments.com/tag/item31?tag=950) , investments.com/culture/item8)
indomie/item6397#)
Indomie (https://www.indonesia-investments.com/tag/item31?tag=82) ,
Indofood (https://www.indonesia-investments.com/tag/item31?tag=80) , About Us
Food (https://www.indonesia-investments.com/tag/item31?tag=27) , (https://www.indonesia-
investments.com/about-
Despite the slowing economy and weaker purchasing power in recent years, sales of instant noodles in Indonesia continue to rise. Although us/item9)
unhealthy, instant noodles are a highly popular meal in Indonesia due to its cheap price, tasty avors, and easy-to-prepare nature. Instant noodle
LANGUAGE
brands such as Indomie (produced by the Indofood Group) and Mie Sedaap (produced by the Wings Group) have become household favorites
across the archipelago. Both are among the top ve brands that are purchased most often by Indonesian households. Select language
(/news/todays-headlines/instant-
noodles-market-indonesia-
Sribugo Suratmo, Chairman of the Association of Bread, Biscuit and Instant Noodle Producers (Arobim), expects instant noodle sales to rise
dicult-to-compete-with-
between 7 - 14 percent (y/y) in 2016 to about 16 billion packages from around 14 billion packages last year. A simple calculation shows that, on
indomie/item6397#)
average, each Indonesian citizen (https://www.indonesia-investments.com/culture/population/item67) bought approximately 56 instant noodle
packages in 2015.
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Although it is considered tough for newcomers to penetrate Indonesia's instant noodles market (as the Indofood Group (https://www.indonesia-
investments.com/business/indonesian-companies/indofood-sukses-makmur/item227) in particular has a strong brand, loyal customers, and
dominant market position), foreign investors remain interested to tap the potential in this market due to Indonesia's large population. For example,
Japan-based Mitsubishi Corporation acquired a 34 percent stake in Nissin Foods Indonesia, the local unit of Nissin Foods Holdings, in December
2015. Mitsubishi Corporation released a statement saying that the company is optimistic about opportunities in the world's second-largest
instant noodle market (after China).

However, based on research conducted by JP Morgan, Nissin Foods only holds a one percentage point market share in Indonesia's instant noodle
market. Despite this context Mitsubishi's strategy is to use the Alfamart chain of minimarkets (which is run by Mitsubishi's local partner Alfa
Group) to enhance the market share of its instant noodles. Alfamart is one of Indonesia's leading retailers, serving more than three million
customers daily, with approximately 10,300 stores spread across Indonesia, according to a statement on its website. Mitsubishi also plans to
export the instant noodles. It especially targets Muslim countries for its 'halal' instant noodles products.
Market Share Composition Indonesia's Instant Noodles Market (%):
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Company 2011 2012 2013 2014

Indofood Sukses Makmur 71.8 71.8 71.8 72.0

Wings Group 14.6 14.6 14.8 14.9

Conscience Food Holding 2.7 2.7 2.7 2.6

ABC President Indonesia 1.9 1.9 1.8 1.8

Jakarama Tama 2.4 3.0 2.9 2.9

Medco Group 1.2 1.2 1.2 1.1

Nissin Foods Holdings Co Ltd 1.1 1.1 1.0 1.0

Delifood Sentosa Corp 0.7 0.6 0.6 0.6

Source: JP Morgan

The Power of Instant Noodles in Indonesia:

What Explains the Popularity of Instant Noodles in Indonesia (esp. Indomie & Mie Sedaap)?

available across the Indonesian archipelago

affordable (also by the poorer segments of the population)

wide range of avors (often new avors come on the market: innovation)

it is a practical meal (quick and easy to make)

aggressive advertising campaigning in various media (especially television)

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