August 22, 2017
Volume 7 Issue 4
Indonesian Marketers Diversify Retail Platforms
The route to market for lubricants in Indonesia can be vastly different from one seller to the next, but suppliers told Lube Report Asia recently that their key to increasing sales is to make inroads in a variety of retail channels.
State-owned PT Pertamina Lubricants built around 100 new retail outlets catered to its various segments in the first half of the year. With lubricant sales at its outlets increasing 3.5 percent each year, the company plans to set up an additional 30 new outlets by the end of next year. Its total gamut of new outlets will be comprised of 100 Enduro Express outlets for motorcyclists and 30 Bright Olimart Modular outlets for four-wheel vehicle owners.
“Our expansion of retail outlets is not just to build brand awareness, but also to ensure that our products are available to all consumers in Indonesia, in [any given] region, as much as possible,” Intania Prionggo, a Pertamina Lubriants public relations officer, told Lube Report Asia. “Through this, we can also make sure that our customers can purchase genuine Pertamina Lubricants products from authorized outlets.”
“Lubricant players are leveraging their sales through workshops or retail shops, and Pertamina is also trying to utilize its extensive fuel station networks throughout the country by opening [engine oil] retail shops or mini-workshops at those locations,” said Hutomo Hadi Saputro, associate consultant of Ipsos Business Consulting. Pertamina Lubricants already operates more than 1,800 retail outlets.
In July, Liqui Moly GmbH signed an agreement with Ace Hardware Indonesia Tbk, a member of the Kawan Lama Group, to market its products at Ace shops and on its online stores. Ace is a major retail chain that has helped pioneer the “do-it-yourself” concept in the country, with 135 outlets in 34 cities. Liqui Moly customers can make purchases online and access its virtual “ask the expert” feature for advice on vehicle maintenance.
Yet that’s a relatively new trend. “Discussions with distributors and experts indicate that Indonesian consumers are still not familiar with using or relying on online platforms to buy aftermarket products,” Hutomo said. As a predominantly do-it-for-me culture, “they still prefer to go and visit workshops or retail shops to purchase the products.;
A brand’s reputation may make all the difference on its success in e-commerce channels. “If the brand is already well-reputed, online platforms may be the evolving channel for aftermarket products, including lubricant players,” he added. “In addition, by leveraging modern channels to sell aftermarket products, common customers may perceive that the products should be expensive.”
Liqui Moly said that by offering motorcycle oils online, it’s addressing a gap in the market. “Our focus is on the motorbike product range, and in this segment, many people love to take care of their bikes by themselves,” said Peter Szarafinski, head of international media relations for Liqui Moly Gmbh. “This includes more frequent work such as cleaning and polishing, but also changing the oil.”
Liqui Moly also has sales representatives plying the streets marketing to motorcycle workshops, where it also sells its products. “The brand has been in the market for many years, but in the past it suffered from a lack of distribution. Our deal with Ace means a new strategic approach. Now we are in the position to grow our business in Indonesia faster than before.
“Currently Ace and Liqui Moly are focusing on consumer products,” he added. “Later on we may expand our product range at Ace to [business-to-business] products developed for workshops only.”
Liqui Moly sells a range of motorcycle lubricants in Indonesia, along with various automotive additives, service sprays and care products manufactured in Germany.