7-Eleven Indonesia: Innovating in Emerging Markets
What I learned from the case is that Henri Honoris had made successful pivot in his existing company and
sustained its success through continuous innovation. The Modern Group, his company, was initially selling
photographic equipment by became a manufacturer and distributor of Fujifilm. In 1997, the company added its
partnership with Ricoh to sell document solutions, equipment and photocopying services in Indonesia. However,
started from early 2000s, the photographic film industry faced a big disruption from digital cameras.
Consequently, a few years after that the company had to lay off thousands of employees and closed around 1,500
Fujifilm stores. In 2006, the company began to look for another business model and finally chose to become a
master franchisee of 7-Eleven in Indonesia.
The company introduced 7-Eleven franchise to Indonesia in 2009. He saw a concept that matched with the
lifestyle of youths and young adults, which are rising population in Indonesia. They loved to hanging out, thus 7Eleven provide seating and services, as well as by serving more fresh food and beverages. Behind this concept,
Henri Honoris had prepared several strategies to keep 7-Eleven appealing.
Firstly, Henri Honoris created a central kitchen to focus preparing fresh food and beverage into one place to
ensured product quality and uniformity then deliver them to all 7-Eleven stores. The central kitchen prepared a
kind of food and beverage that met with the favourite taste of youths and young adults, which are Western and
Asian food. Secondly, 7-Eleven provide more convenience and comfort than existing minimarkets or traditional
stores. Besides providing fresh food and beverage, it opened 24 hours a day and had provided Wi-Fi and airconditioning in it. Thirdly, 7-Eleven also offer food delivery, digital services and digital kiosk “Sevelin” in which
customers can buy a variety of tickets, insurance, and taxi services. These features were suited with the needs of
customers, such as make calling taxi easier in the night easier for female customers. Fourthly, it arranged several
product launch and events in stores, such as launch iPhone 5 at midnight in 2012 and hosted soccer screening
events. Fifth, Henri pioneered location-based advertising agreements with telecommunication providers. Lastly,
it keeps local communities closer by allowing them to manage storefront parking.
Nonetheless, running these strategies were followed with several challenges. Firstly, since 7-Eleven stores
were mostly located in Jakarta at that time, the company faced with Jakarta’s traffic while distribute logistics.
Thus, it can only distribute once a day in the midnight. Second, the capacity of central kitchen is limited into
certain production amount. If there were many other stores opened, the company had to either expand central
kitchen or opened an another one. Thirdly, recruitment, retention, and labour costs in Jakarta was challenging.
Then, real estate cost in Jakarta was high and continuously increased. As a drawback of providing extra space for
seatings, lease and property costs of 7-Eleven store was higher compared to that in conventional minimarkets.
Lastly, regulation on franchise was unclear.
In my opinion, Henri Honoris was a genius in creating marketing strategies to 7-Eleven target segment.
However, in order to make 7-Eleven stay profitable and continuously expanding, He had to do two things. First,
he had to do cost-benefit analysis in keeping existing stores, adjusting, and expanding new stores so that the cost
will not outweigh the benefit. Second, he had to be closer to government and policy makers so that there is no
regulations that threat the existence of 7-Eleven.