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Middle class in Indonesia shops at 7 11

"Before you had a dirty, sweaty little street shop, and that's all there was," said Mr. Guharoy of Roy Morgan Research, referring to the warungs. "Now you can go to a clean, air-conditioned shop and it's a better experience."

To appeal to local tastes in the world's most populous Muslim country, 7-Eleven had to rethink its sales strategy.

The store offers ready-made fried rice, doughnuts and its signature Big Gulp soft drinks and flavored-ice Slurpees. Most outlets also sell beer and wine coolers -- though each new shop conducts neighborhood surveys to get community approval first.

Meals can cost less than 23,000 rupiah, which appeals to families that might once have gone to McDonald's, a close competitor. Novi, a 37-year-old travel agent who, like many Indonesians, goes by only one name, said she liked the comfort of being indoors and the international food options. Her favorite is chicken katsu, a Japanese-style fried cutlet.

"There is a different kind of atmosphere, a different kind of food," she said, in comparing 7-Eleven with the food stalls she used to frequent. "There is air-conditioning here and there are no buskers to bother you."

The store's Big Bite hot dogs and cafe items -- coffee and cappuccino -- bring in the most sales. Small snacks like chips and pillow bread, tiny sandwiches filled with cheese or chocolate, are also popular.

With 69 stores in Indonesia, all of them in Jakarta, 7-Eleven lags behind its closest competitors, including McDonald's, Dunkin' Donuts and KFC, which together have more than 600 outlets.

But 7-Eleven is expanding much faster, having added 36 stores last year alone. In Thailand, 7-Eleven has one store for every 10,000 people. If the same ratio were applied in Jakarta, Mr. Honoris said, the city could see 2,000 outlets.

The swift growth of the middle class shows the enormous potential for expansion. From 2003 to 2010, about 50 million people entered the middle-income bracket, with disposable income of $2 to $20 per day, according to the World Bank. Indonesia's gross domestic product per capita is now more than $3,600, exceeding that of India, the second-largest consumer market in Asia, after China.

For 7-Eleven, positioning itself as more of a hangout and less of a convenience store has made both its owners and its customers happy.

Rendie Sumadilaga, 26, said the store was even a decent place to meet girls.

"There's lots of good eye candy," he said, nodding toward a nearby table.

And that is just one of many factors Mr. Honoris is banking on.


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