KEY TAKEAWAY: MAP Group Asia of Jakarta has built a $1 billion market cap business as the dominant franchisee for overseas brands in Indonesia. Its dominance of this space makes it almost the only such option for international brands.
________________________
Officially listed as PT Mitra Adiperkasa on the Jakarta Stock Exchange, MAP represents over 150 brands in Indonesia, including SOGO, ZARA SA, Marks and Spencer, SWAROVSKI, Skechers, the LEGO Group and Godiva Chocolatier.
MAP's exclusive franchise contracts run between 5 and 20 years, so it works with durable brands, rather than fast fashion. Its omni-channel scope includes e-commerce and physical stores. Because it is a franchisee, it owns no real estate.
While MAP's e-commerce revenues are only 10% of its total, it has used its digital platform, with an increasing reliance on digital analytics to increase revenues 18% annually over the past 10 years, including 5% in same store sales growth. It was able to double its number of stores to 3,700 while lowering headcount per store from 12 to 8. It used technology to increase sales efficiency.
Its selling expenses dropped from 35% of revenues in 2014 to 29% in 2024, which made the company viable, as its net margin grew from under 1% to 4%-5% during that time.
Its revenues per employee of $80,000 is similar to Sogo, despite Indonesia's much lower per capita income than Japan.
Most of Indonesia's e-commerce platforms like Shopee and Tokopedia cater to lower priced items. Indonesia does not have an mostly online retail option for international brands such as Mercado Libre in South America. MAP's exclusive rights with these brands in Indonesia, combined with its e-commerce option, makes it difficult for Mercado Libre or a similar competitor to enter the market.
MAP uses EPT V5 which enables an omni-channel customer experience - click and collect, click and deliver, endless aisle, loyalty program, etc., which creates a "seamless customer journey" when interacting with the brand.
Combining EPT V5 with Blue Yonder's enterprise logistics and supply chain platform, including inventory management, demand forecasting and other related items, enabled MAP's rapid growth with increased profitability, cementing
its dominating position and competitive moat.
Its net income grew 35% per year for the past ten years. Its asset light model makes it possible to to maintain a return on assets in the 6%-9% range.
Next up, I'm not sure.
Photo is a Komodo Dragon.