Rahmi Yati regularly buys groceries from Alfamart, one of Indonesia’s largest convenience store chains—but mostly online.
While the nearest Alfamart store is just a few hundred meters from her home in Bekasi, a Jakarta suburb, Yati, a working mother with a two-year-old child, found that ordering staples like rice, drinking water, and eggs through the Alfagift app makes her life easier.
“I buy products in bulk,” said the 33-year-old employee of a private company in Jakarta, adding that the groceries are delivered for free to her doorstep. “I don’t have to bother carrying them from the store.”
Yati shops with Alfagift once or twice a week, spending roughly IDR 100,000 (USD 5.9) each time. She has been using the app since it launched in 2021.
Young and tech-savvy customers like Yati have helped Alfagift grow rapidly, pulling in 25 million members as of February.
The app is at the core of Alfamart’s omnichannel strategy as physical store saturation looms. It is also grappling with Indonesia’s shrinking middle class and weakening purchasing power. These factors have also pushed the company to expand overseas, such as its recent entry into Bangladesh, and to diversify into other businesses.
“The next five years from now … [Indonesia] will reach what we call a mature market,” Anggara Hans Prawira, president director of Alfamart’s operator Sumber Alfaria Trijaya, told Nikkei Asia in an interview earlier this year.
He added that, over the past two decades, the company has opened an average of 1,000 new stores annually, but this pace will be reduced starting this year, and with a focus on islands well beyond Java, as “we believe we [already] cover most of the regions.”
Sumber Alfaria was founded in 1989 by businessman Djoko Susanto. Originally a tobacco seller, it entered the convenience store business in 2002 and has since expanded to about 24,000 stores across the archipelago.
Its main rival is Indomaret, which is part of the Salim Group conglomerate. As of 2024, there were more than 23,000 Indomaret outlets in the country, and in major cities it is common to see Alfamart and Indomaret stores right next to each other.
Earnings reports from Sumber Alfaria and Indomarco Prismatama, the Salim arm that runs Indomaret, show that Alfamart has overtaken its rival in terms of sales and net income in the past few years.
Slowing household consumption in Southeast Asia’s largest economy is eroding Alfamart’s profits, however. After three consecutive years of profit growth, even during the Covid-19 pandemic, Alfamart posted a 7% drop in net income in 2024. In the first nine months of 2025, the figure fell 3.5% year-on-year to IDR 2.3 trillion (USD 135.3 million). The company has yet to release its full-year results.
“We see the decreasing purchasing power—that’s obvious,” Prawira said, adding that consumers today have become less willing to spend beyond necessities, citing, as an example, that there has been a roughly 20% drop in Alfamart’s sales of ready-to-drink beverage products. “[With a] shrinking middle class income … we can see the basket size is affected.”
The shrinking margins and rising costs, particularly of the overseas expansion, have taken a toll on the share price of the company, which trades as Sumber Alfaria Trijaya. It has fallen 27% this year and is 63% lower than its all-time high, reached in late October 2024, when President Prabowo Subianto took office.
The lackluster sales situation helped spur Alfamart’s entry into Bangladesh in late January, its second overseas market after the Philippines, where it has around 2,400 stores as of September in a joint venture with Philippine retailer SM Group. In Bangladesh, Alfamart has partnered with local livestock and food company Kazi Farms, and is eyeing the opening of more than 100 stores in Dhaka “in the near future” with Japan’s Mitsubishi Corp. supporting the venture.
Prawira said the Bangladesh move highlights the company’s search for a new “source of growth,” adding that the rapid urbanization and Dhaka’s population density “really fit [for] minimarkets,” resembling Jakarta a few decades ago.
Still, Prawira stresses he wants to be “cautious” with overseas expansion, adding that having reliable local partners is key to obtaining “local market understanding.”
“We want to make sure that the format is really well accepted by the customers there,” he said. “[There is] no point for us to keep opening stores while we don’t really deliver the right business model, the right assortment, and right strategy, promotion and so on.”
Prawira is more upbeat about Alfamart’s omnichannel strategy through Alfagift, describing how combining the strength of outlets with online services can lift earnings per store.
“Why should we have more and more stores while we have other channels [through] which we can leverage the offline?” he said, referring to bricks-and-mortar stores. “We have networks in the country. We can leverage the stores as [hubs] for delivery.”
As of last September, around 3,500 Alfamarts had been turned into “hubs,” promising deliveries within an hour from an order being made through Alfagift. Prawira said Alfamart will also open more “dark stores,” short for dedicated storage centers for online orders that are not open to the public, including through the conversion of floor space at current offline outlets. He added that Alfamart ran 50 dark stores as of last year, and is targeting to double that count this year.
Prawira said its bricks-and-mortar outlets give Alfamart an advantage over other quick commerce players that might have to invest upfront to acquire storage sites. Other active players in the grocery delivery space include startups Astro and Sayurbox, as well as bigger tech companies such as Gojek and Grab, which also offer the option to shop at Alfamart and Indomaret through their services.
Prawira said Alfagift’s membership has consistently grown by over 30% per year, with Alfamart investing “heavily” on a loyalty program through its subsidiary Global Loyalty Indonesia. He added that this program is modelled after Ponta, one of Japan’s largest loyalty programs, which is run by convenience store chain Lawson. Alfamart runs 355 Lawson stores in Indonesia, as of September 20225.
He also said Alfagift offers a larger variety of products, including premium items such as olive oil and some personal care brands, than the average 4,000–4,500 products commonly on display in an Alfamart outlet. He noted that this helps increase the average spend per customer.
Alfagift also helps Alfamart mine customer data and identify those who can afford more expensive items and those who are cost-conscious, and recommend products accordingly.
The results have been encouraging. Prawira said online sales are growing rapidly, now accounting for 8% of the company’s total revenue from 6% in December 2024. He is upbeat about its future growth thanks to customers like Yati and other “very [tech-] savvy young moms.”
Prawira, who earned his master’s in business administration from Australia’s Monash University, was a finance director at Alfa Mitramart Utama before it was acquired by Sumber Alfaria in 2002. He became Sumber Alfaria’s president director in 2014, replacing the founder’s daughter, Feny Djoko Susanto, who now serves as president commissioner.
Omnichannel strategies are also being adopted by Indomaret with its Klik app and other major Indonesian retailers such as beauty commerce company Sociolla.
Josua Pardede, chief economist at Permata Bank, sees Alfagift’s expanding membership as a “valuable” asset to Alfamart, giving it “a large pool of first-party customer data linked to frequent everyday missions.” Alfagift’s growth shows “a strong signal that digital can lift basket economics, not just shift channels.”
Beyond grocery business, Prawira envisions Alfamart becoming a “preferred retail distribution network” over the next decade, citing its existing payment point services, through which customers can pay their utility, motorcycle loan and other bills, and expanding them to other items such as event tickets.
“We are quite open to … enter into other potential businesses,” he said, citing a new partnership with startup Layar Digi to explore a “micro cinema” business that would use vacant space at Alfamart outlets for movie viewings with around 30 seats.
Prawira stopped short of saying more about the venture, but on March 5, the two companies held a soft opening of their first micro cinema in an Alfamart outlet outside Jakarta.
Abida Massi Armand, an analyst at BRI Danareksa Sekuritas, said Indomaret, in contrast to Alfamart, focuses on “affordable pricing strategies through bundling promotions and direct discounts to attract price-sensitive buyers.” He noted that being part of a large conglomerate gives Indomaret “the advantage of competitive purchasing prices.”
But both minimart chains are also facing a new challenge in the form of Prabowo’s “Koperasi Merah Putih” program, under which the government is seeking to establish 80,000 village cooperatives nationwide that will offer affordable staples, medicine and loan options.
Yandri Susanto, the minister of villages and development of disadvantaged regions, said the government considered stopping the issuance of permits for new convenience stores in rural areas to support the cooperatives program.
Pardede of Permata Bank said there might be room for future collaborations in which Alfamart and Indomaret could supply those cooperatives. But for now, the program “can meaningfully slow the [companies’] rural expansion runway and raise competitive pressure on basket size and pricing in the same catchment areas.”
“Regulatory uncertainty rather than an immediate nationwide demand shock” will pose a main near-term potential risk for businesses, Pardede noted.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.
Note: IDR figures are converted to USD at rates of IDR 17003.11 = USD 1 based on estimates as of April 6, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.