Eid 2022: Retail Post-Lockdown in Indonesia

After two years of celebrating in lockdown, Eid 2022 is back in full swing. Eid is one of the biggest celebrations for Muslims in Indonesia, which make up nearly 90% of the country’s 270 million population. As the Covid-19 cases are under control, Eid 2022 is set to be the first “normal” celebration since the pandemic started in 2020.

Before Ramadan started, the Indonesian government announced it would ease restrictions - allowing Muslims to hold mass prayers during Ramadan and travel to their hometowns for the Eid celebration in early May.

In short, you can expect Indonesians to go all out celebrating this year. This is a huge opportunity for Ethnicwear retailers to bounce back after a challenging couple of years when demand was low and consumers were not shopping for new Eid outfits. Read on to learn how key retailers strategised for Eid 2022 and for top tips on post-Eid trade.

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Launching Earlier & More Frequently

Before Eid itself, Muslims observe Ramadan for an entire month. Ramadan is when Eid retail is typically at its peak as consumers buy new outfits for the many open houses and get-togethers that will take place during Eid. Retailers typically launch Eid collections in conjunction with the start of Ramadan, which is what happened in 2021. 

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Tokopedia Official, Zalora and Hijup are the three top Ethnicwear retailers during Eid. Last year, the retailers launched Eid collections during the first week of Ramadan, with new-ins peaking on the third day. While there were new launches on other days, the bulk of new-ins were concentrated on April 14th, 2021.

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Eid 2022 is another story. This year, the retailers launched a lot of new-ins one day before the start of Ramadan. But unlike in 2021, large amounts of new products were still launched in the following two weeks. 

It’s likely that since the Covid-19 situation have been improving in Indonesia, the retailers anticipated the ease of restrictions and an increase in demand. Retailers prepared larger assortments and more frequent launches to capitalise on the festivities.

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Switching Up the Assortment Mix

Since the news broke that Indonesians can celebrate Eid normally again, it spurred anticipation and excitement among consumers. As we’ve seen from the retailers’ launch calendar, they were prepared with larger assortments this time.

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Tokopedia and Hijup have expanded their assortments considerably this year compared to Zalora, whose assortment count did not change much. In terms of the category composition, Hijup switched it up by adding more ethnicwear tops in its collection. Meanwhile, Tokopedia and Zalora continue to prioritise the Ethnicwear Dresses category this year, which mainly made up of Jubahs & Abayas.

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Like all categories in fashion, Eid trends change every year. Looking at Zalora’s most replenished Ethnicwear Dresses in 2022 vs. 2021, there has been a clear shift in the trending silhouettes, patterns and colours. Consumers in 2021 favoured a lighter colour scheme, ruffles, soft floral patterns and belted dresses to accentuate the waist. Meanwhile darker tones, bold patterns and voluminous silhouettes performed better in 2022.

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Overall, all of the ethnicwear subcategories performed better compared to 2021 - the sell-out rate increased by 62% YoY. As shown in the line chart, sales continue to increase the closer we get to Eid.

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As trends shifted, some ethnicwear subcategories performed better in 2022 than they did last year. Jubahs & Abayas, Kaftans and Baju Kurungs had a significant uptick in sell-out rates.

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Pricing & Discounting Strategy

With the larger assortments this year, the median price for Tokopedia, Zalora and Hijup decreased to USD11 from USD13. The three retailers also shifted their pricing structures and price spread to try to improve sales.

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In 2021, Zalora charted poor sell-out across its higher price ranges, indicating that the retailer failed to meet its consumers’ perceived value. Zalora priced its products more accurately this year - concentrated in the USD15-20 range - and achieved higher sell-out across all prices. 

Tokopedia on the other hand, had higher product contributions under USD20 this year but enjoyed strong sell-outs even in the higher price brackets. The retailer was able to achieve this by ensuring that premium products had better attributes to justify their price.

Overall, there were more products on markdown and deeper discounts this year across all three retailers. The mean discount increased to 46% this year compared to 39% in 2021.

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Being more aggressive with discounts paid off for the retailers. Tokopedia in particular achieved good sell-out rates across all discount brackets, including the shallow discounts. On the other hand, Zalora’s deeper discounts at over 30% were more effective at driving sell-out. The retailer also had more products in deeper discount brackets this year, especially at 60-69% off.

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Top Tips for Post-Eid Trade

Even though Eid 2022 retail performance seems promising, there is bound to be leftover stocks after the festive season. While unsold stock is always a worry, there are opportunities to unload them later in the year! Here’s how:

• Re-merchandise Eid ethnicwear to be launched for the next festive event, Eid al-Adha in July. The celebration is essentially Eid 2.0 and the same products will be in demand again.
• Identify categories with the highest leftover stocks and group them for a promotional campaign that highlights the slow-moving categories. A key time to promote old ethnicwear stock is during the wedding season to incentivise customers.
• Group products by categories and keep a close eye on those categories’ performance. If a category that you have aged stock of is trending in the market, you can re-launch them or run promotions on existing pieces to capitalise on current trends.
• Take advantage of the high traffic during sales events like Single’s Day to run tactical discounts on Eid products and clear out stocks.
• Re-launch unsold Eid collections during the next end-of-season sale with staggering discounts to still control the margin.

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Key Takeaway

Eid 2022 is set to give ethnicwar retailers a much-needed boost after the two-year Covid-19 slump. The rising demand this year is already improving sales just two weeks into Ramadan as the top three retailers all achieved higher sell-out than this time last year.

Pricing right and incorporating current trends into your assortment is the key improving sell-out this year but some unsold stock is still inevitable. However, there are plenty of opportunities to deal with aged inventory while still keeping your margins in check.

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