Indonesian conglomerate Lippo Group is to enter the local cinema exhibition business in 2014 and plans to open 1,000 screens in the next five years. The cinema exhibition industry in Indonesia has been dominated by two exhibitors, Cinema 21 and Blitz Megaplex, for a long time. There were approximately 722 screens in Indonesia at end 2012. Cinema 21 accounts for 87.1 per cent of the total screens (629 screens at end 2012), while Blitz Megaplex takes 10.5 per cent (76 screens at end 2012). With Lippo Group entering the business, the whole market structure will be changed completely as Cinema 21's near monopoly of the market will be challenged.
Indonesia has the potential to further expand its exhibition industry. It has the fourth-largest population in the world with 250 million, and a rising proportion of middle-class. Economically, Indonesia has a robust GDP with an average growth rate of around 6 in the past five years. However, it only has 2.9 screens per million head of population, far less compared to neighbouring countries like Singapore (37.5), Philippines (7.3), Malaysia (25.7) and Thailand (12.1).
Founded in 1950, Lippo Group is the leading property developer in Indonesia with significant investment in retailing, media, hospitality, financial, energy, IT, and healthcare industries. With a similar situation to Wanda Group in China, who is also a leading property developer that entered the exhibition market successfully, Lippo Group has the financial resources for a rapid and significant investment. Lippo Group currently owns 40 shopping malls in Indonesia and many of them are home to Cinema 21. It plans to take back those places once the leases expire. The first Lippo Group multiplex is expected to open in February 2014.