Throughout 2024, Indonesia’s economy exhibited a positive trend despite being overshadowed by various global uncertainties and challenges. Several international institutions projected global economic growth between 2.6% to 3.2% (year-on-year). Amid these challenges, Indonesia successfully maintained its resilience.
Bank Indonesia reported that Indonesia’s domestic economy remained solid during 2024 on the back of domestic demand. In the first quarter of 2024, Indonesia’s economy grew by 5.11% (year-on-year), followed by 5.05% (year-on-year) in the second quarter and 4.95% (year-on-year) in the third quarter. Investment showed positive growth, underpinned by the completion of various National Strategic Projects (PSN) and private investment in response to government incentive support. Household consumption also continued to grow, spurred by sustained consumer confidence and the positive impact of regional elections (Pilkada) contested in various regions.
At the end of the year, the Central Statistics Agency (BPS) reported that Indonesia’s economy grew by 5.03% (year-on-year). This was lower compared to the economic growth in 2023, which stood at 5.05%.
The Board of Commissioners is of the view that the retail industry needs to embrace and adapt to the various changes accelerated by global dynamics, including digital transformation. The COVID-19 pandemic has significantly altered consumer behaviour, driving a greater preference for online shopping, contactless services, and faster, more convenient shopping experiences. Consumers are also increasingly prioritising safety, convenience, and added value such as personalisation and sustainability in their purchasing decisions.
As one of the industries highly responsive to change, the retail sector is required to understand and keep up with consumer preferences that emphasise convenience, personalisation, and accessibility. To address this, the Company has adopted an integrated O+O platform strategy to deliver seamless shopping experiences across both physical and digital channels.
In the midst of the digital era, retail companies must quickly adapt to remain relevant and competitive. One of the key strategies implemented is digital transformation, where companies integrate technology to enhance customer experience, improve operational efficiency, and expand market reach. The use of online stores is a primary focus, allowing consumers to shop online easily and securely. Companies also need to optimise the omnichannel experience, which combines offline and online shopping to provide a seamless experience for customers.
The Board of Commissioners fully supported and closely supervised the implementation of the O+O strategy applied by the Company. Part of this strategy was the opening of new stores located in residential areas which were closer in proximity to customers than traditional shopping center outlets. This initiative started at the end of 2020, and was very well welcomed by customers. In 2024, the Company launched 28 new stores and relocated 11 stores, bringing the total number of stores at the end of 2024 to 179. Coupled with its offline stores, the Company continued to expand digital channels to get closer to customers and make it convenient for them to obtain health and wellness products.
The Board of Commissioners has actively supervised the formulation and implementation of the Company’s 2024 strategies, ensuring alignment with the Company’s long-term goals and the annual work plan and budget. Throughout 2024, the Board of Commissioners assessed the performance of the Board of Directors in relation to these strategies, monitoring progress and providing input at joint meetings. The Board of Commissioners offered direction, recommendations, and feedback to enhance the implementation of the Company’s strategic initiatives, with a focus on improving overall performance and business development.
In addition, the Board of Commissioners diligently supervised and advised the Board of Directors on management’s efforts to strengthen internal controls and risk management processes. This collaboration was instrumental in maintaining the Company’s financial stability and achieving the set objectives.
As a result of these strategies, the Company achieved substantial improvement in its financial performance in 2024. The net revenue for the year amounted to Rp2.06 trillion, reflecting an increase of 33.32% compared to Rp1.55 trillion in 2023.
Furthermore, the Company recorded a net profit of Rp45.67 billion in 2024, showing a significant increase compared to the net loss of Rp16.19 billion in 2023.
Bank Indonesia predicts that Indonesia’s economy in 2025 will maintain its resilience. Bank Indonesia forecasts Indonesia’s economic growth in 2025 to range from 4.8% to 5.6%, with the midpoint estimated at 5.2%. This projection is supported by contributions from exports, growth in the investment sector, and increased consumption, which is driven not only by social assistance but also by boosting labor-intensive sectors.
The Company looks ahead to 2025 with optimism while maintaining caution amid the projected slowdown in global economic growth. The Board of Commissioners believes that the Company should focus on improving performance in 2025 by continuing and further developing the strategies implemented in 2024. Given the dynamics of the global economy impacting the domestic market, the Company will remain committed to leveraging available opportunities to drive better results in 2025.
The Board of Commissioners supports the management’s analysis on the challenges and opportunities of the Company in 2025 and is confident that the Company can achieve further growth in the Indonesian retail market by enhancing customers’ shopping experiences, expanding its store network and strengthening its digital presence. The Board of Commissioners also supports the continuous enhancement of the O+O strategy of the Company as the Company continues to be agile and to innovate to consistently provide the best experience to customers.
The Board of Commissioners is of the view that good corporate governance is fundamental in ensuring the proper management of the Company in the interests of all its stakeholders and in achieving sustainable growth. In this light, the Company is committed to maintaining high standards of corporate governance across its operations.
The Board of Commissioners exercised active oversight of the execution of the strategies of the Company throughout the year and held three scheduled meetings jointly with the Board of Directors where it reported the progress and results of various initiatives. The Board of Commissioners also passed resolutions on nine occasions in the Board of Commissioners’ meetings or by way of written resolutions.
Through the Audit Committee, the Board of Commissioners also exercised ongoing supervision of the risk management and internal control systems, monitored the progress of the internal and external audits and supervised the implementation of the recommendations of the Audit Committee. The Board of Commissioners appreciated the efforts made by the Audit Committee in holding regular meetings with the Board of Directors and the Head of Internal Audit Unit, to keep abreast of the business issues and their implications to the operational and financial performance of the Company. Overall, the Board of Commissioners is satisfied that the Company has an effective level of corporate governance
In 2024 and up to the date of issue of the Annual Report and Sustainability Report, there was no change in the composition of the Board of Commissioners. The Board of Commissioners currently comprises six commissioners, including the President Commissioner and Independent Commissioner, four Commissioners and one Independent Commissioner.
The Board of Commissioners would like to express its gratitude to the Board of Directors and all dedicated employees for their continued professionalism and contribution to the Company. On behalf of the Board of Commissioners, we would like to express our appreciation to the shareholders for their trust and support. Our appreciation also goes out to all our business partners for their cooperation and support. We are confident that with the continuous support of all our stakeholders, the Company will continue to position itself to achieve sustainable growth.
On behalf of the Board of Commissioners,
President Commissioner and Independent Commissioner
Indonesia’s economy in 2024 showcased remarkable resilience despite growing global uncertainties, bolstered by strong domestic demand, particularly driven by household consumption. Economic stability was also maintained, both externally and internally. Indonesia’s Balance of Payments (BOP) remained sound, thereby supporting external stability.
From the exchange rate perspective, Bank Indonesia reported that its exchange rate policy remained oriented towards maintaining Rupiah stability against the impact of elevated global uncertainty. The Rupiah in December 2024 (as of 17 December 2024) depreciated 1.37% (point to point) on the previous month in response to higher global uncertainty, particularly concerning the direction of US policy, less room for further Fed Funds Rate reductions, the strong US Dollar and escalating geopolitical risk. These factors are causing a rebalancing of global investment, with portfolio allocations returning to the United States. In general, however, Rupiah depreciation remained manageable. When compared to the level recorded at the end of December 2023, the Rupiah has depreciated by just 4.16%, less severe than the Taiwan Dollar (5.58%), Philippine Peso (5.94%) and Korean Won (10.47%). Moving forward, the Rupiah exchange rate is projected to remain stable in line with Bank Indonesia’s firm policy commitment to maintaining Rupiah stability, attractive yields, low inflation and a promising economic growth outlook for Indonesia.
From the retail industry perspective, the sector continued to face challenges in 2024 due to the deflationary period between May and September, which coincided with widespread layoffs (PHK) in various other industries.
The Indonesian Retail Entrepreneurs Association (Aprindo) projected the retail industry’s turnover growth in 2024 at 4.8% to 4.9% (year-on-year). This is a decline compared to growth in 2023, which was recorded at around 5.2% to 5.3%.
Meanwhile, Indonesia’s economic growth in 2024 was recorded at 5.03%, reflecting a slight decrease compared to the growth rate of 5.05% in 2023.
The retail industry remained a significant contributor to Indonesia’s economy. In the second quarter of 2024, the retail sector contributed 10.89% to Indonesia’s gross domestic product (GDP).
Having gone through the pandemic for more than three years, there were many lessons learnt and the Company adapted its strategy to the various changes accelerated by the pandemic. The way customers shop and interact with retailers continued to evolve, and in 2024, the Company successfully strengthened its O+O platform strategy which has been the Company’s vision since 2020.
The Board of Directors is of the view that retail is not only focusing on products but also the social interaction between people, shopping experience and relationships with the customers.
Different from the omnichannel or O2O (online to offline or offline to online) model that moves customers from one channel to another, O+O retail provides an integrated experience to customers, allowing them to shop through any channel and at any time from anywhere to better serve their needs.
In line with the O+O strategy, the Company continues its ongoing expansion in the O+O realm. The Company makes every effort to provide a pleasant and seamless shopping experience across all channels.
In 2024, the Company added 28 new stores in residential areas, bringing the total number of stores at the end of the year to 179 stores. This includes two new stores in Batam and one new store in Jambi, which marked the Company’s first presence in both cities. These two stores feature the latest G9 store concept, offering an O+O shopping experience that combines the convenience of physical and digital shopping, with a wide range of favourite products including health care, personal care, cosmetics, and skincare from exclusive and local brands.
The Board of Directors understands the changes in consumer behaviour due to the pandemic and aims to be more easily accessible to customers and make it convenient for them to shop near where they live or through other channels that they prefer.
In 2024, the Company also further strengthened its commitment to empowering women and sustainability by launching the campaign theme “The New Beautiful: Real Growth, Real Impact, Better Environment” to encourage women to empower themselves to Look Good. Do Good. Feel Great. Furthermore, through this theme, the Company reinforced its dedication to continuous innovation in providing high-quality shopping experiences to its customers, while also focusing on the sustainable growth that creates a more meaningful impact on its surrounding environment.
In 2024, the Company also celebrated a special milestone of reaching two million Watsons Club members in Indonesia, where being a Watsons Club member is not just about earning points or receiving special promotions; it is about how the Company can offer more attention to its loyal members.
The Board of Directors was actively involved in various discussions in formulating the O+O strategy, including seeking advice and input from the Board of Commissioners. The Board of Directors was also directly involved in carrying out the overall O+O strategy to ensure the best implementation.
As of 31 December 2024, the Company operated 179 stores in 19 provinces of Indonesia, Watsons own online store as well as official online stores at Lazada.com, Shopee.com, Tiktok.com, Halodoc platform, Tokopedia.com, GrabMart app, GoMart app, Good Doctor platform and GrabHealth (Good Doctor partner) within Grab app, and Alodokter platform. As a result of an integrated O+O platform strategy, the Company was able to deliver improved net revenue compared to 2023. The Company recorded net revenue of Rp2.06 trillion which increased by 33.32% compared to Rp1.55 trillion in 2023. The Company posted a net profit of Rp45.67 billion in 2024, reflecting a significant improvement compared to 2023, when the Company reported a net loss of Rp16.19 billion.
In 2024, the Company successfully developed online channels by cooperating with online commerce partners, and expanding the offline network in accordance with the implementation of the O+O platform strategy.
The Board of Directors continues to focus on driving innovation for sustainability and to adapt to new skills, new ways of working, and new collaborations with third-party digital platforms to fulfill its commitment to put a smile on its customers’ faces today and tomorrow. In this connection, the Company has been successful in widening the product range for customers, opening up new O+O channels (including the chat-based mobile app, Whatsapp), opening Watsons stores with pharmacy concept in residential areas, and updating the Watsons Indonesia app.
The International Monetary Fund (“IMF”) projects Indonesia’s economic growth to reach 5.1% in 2025. The IMF also highlighted that Indonesia has successfully undergone an impressive economic transformation over the past two decades.
According to the IMF’s official website as of October 2024, the global economic outlook is projected to grow at 3.2% for 2024 and is expected to remain stagnant at 3.2% in 2025.
Bank Indonesia forecasts Indonesia’s economic growth to remain strong in the range of 4.8% to 5.6% in 2025, with a further increase to 4.9% to 5.7% projected for 2026. This economic growth is supported by private consumption, investment, and a solid export performance.
The Board of Directors is of the view that in 2025, the Company should maintain its focus on strengthening connectivity with customers. This objective will be achieved by enhancing customers’ experience through further collaboration with key brands, suppliers and digital partners, aiming to provide more products and superior customer services. All of these initiatives are intended to underpin future store expansion and ever-increasing O+O presence.
The Board of Directors is confident that, with the unwavering support of the dedicated staff and the strategic guidance of the Board of Commissioners, the Company is exceptionally positioned to seize and capitalise on exciting business opportunities in 2025.
By promoting a healthy corporate culture to achieve sustainable business growth, the Company remains committed to implementing good corporate governance practices set out in the Circular Letter No. 32/SEOJK.04/2015 issued by the OJK regarding Guidelines on Corporate Management of Listed Companies (the “Guidelines”). In 2024, the principles of the Guidelines were observed, and the recommendations therein were consistently applied as guidance and practical references for the implementation of all relevant activities of the Company.
In terms of sustainability, the Company remains steadfast in its commitment to driving sustainable growth that benefits both the society and the environment. The Company has developed a sustainability strategy aligned with the United Nations Sustainable Development Goals (“SDGs”), which serve as a blueprint for creating a better and more sustainable future.
In pursuit of its sustainable business development strategy, the Company incorporates environmental, social, and governance considerations into its key business activities. The Company consistently seeks out and invests in innovative technologies that minimise environmental impact and improve efficiency, while also working with suppliers to guarantee responsible sourcing practices and lessen the environmental footprint of its supply chain. Additionally, the Company aids local communities through social programmes, educational initiatives, and projects aimed at economic empowerment.
One of the key focus areas is energy conservation, which the Company is actively promoting among all employees. Aligned with SDG 13 “Climate Action”, the Company recognises the urgent need to address climate change. Given that approximately 60% of global greenhouse gas emissions stem from energy use, the Company has implemented several measures to reduce energy footprint. These include optimising air conditioner usage, minimising lighting consumption, adopting energy-efficient devices, and utilising automatic energy-saving features on electronic equipment.
In 2024, the total energy consumption (from diesel and electricity sources) amounted to 18,904 GJ, with an energy intensity of 0.00036 GJ/piece of product sold. The Company contributed to Scope 1 greenhouse gas (GHG) emissions of 7.57 tons of CO2 equivalent, with an emission intensity of 0.08 kg of CO2 equivalent per piece of product sold.
A key challenge in 2024 is that, while global demand for sustainable products continues to rise, awareness and interest among Indonesian consumers remain in the early stages of development. This gap reduces consumer-driven pressure on retailers to embrace sustainable practices. To address this, the Company is launching educational campaigns, partnering with industry stakeholders to raise awareness, and embedding sustainability attributes into product marketing. By improving consumer understanding and emphasising the benefits of sustainable products, the Company aims to drive demand and encourage broader adoption of environmentally responsible practices across the industry
Another challenge the Company faces is the limited understanding among employees regarding the concept of sustainability. To further reinforce sustainability awareness among employees, management continues to conduct socialisation and education programmes on the importance of sustainability and its impact on the environment. The Company also developed an online training portal that provides access to various sustainability-related courses. As part of the onboarding process, all new joiners are required to complete a mandatory sustainability course, ensuring that every employee understands the Company’s sustainability commitments and best practices. This initiative fosters a culture of responsibility and continuous learning, empowering employees to contribute meaningfully to sustainability efforts. Additionally, management has introduced a series of policies focused on optimising energy use and conserving resources to minimise negative environmental impact.
In 2024, there was no change in the composition of the Board of Directors. The Board of Directors currently comprises two directors, including one President Director and one Director
The Board of Directors would like to express its deepest appreciation to all stakeholders for their continuous support in enabling the Company to maintain its performance in the past year. We would like to extend our heartful thanks to all our employees for their tireless dedication and professionalism. Our thanks are also due to our shareholders and business partners for their trust, and members of the Board of Commissioners for their advice in guiding the Company. Lastly, we would like to thank our customers for their love and continuing patronage in 2024. We always strive to exceed their expectations and forge ahead to scale new heights.
On behalf of the Board of Directors,
President Director
