Mall Operators Shift Expansion Outside Java Amid Economic Headwinds

Amid global economic and geopolitical volatility, public footfall in shopping centres has remained relatively stable. The Chairman of the Indonesian Shopping Centre Management Association (APPBI), Alphonzus Widjaja, stated that malls continue to serve as social hubs for the community, even as shopping patterns shift towards products with lower unit prices.

This trend is closely linked to the weakening purchasing power of the lower-middle class, which has driven consumer spending towards more affordable goods. Furthermore, shopping patterns remain seasonal and situational, particularly as the current period marks a low season following the Ramadan and Eid al-Fitr festivities.

On the other hand, the weakening of the Rupiah and global instability—which has driven up fuel prices—have caused logistics costs to rise, leading to an increase in operational expenses of more than 30%. Consequently, the expansion of new shopping centre developments is currently being focused heavily outside of Java, given the promising potential of the lower-middle-class market segments in those regions.