I. Christianto
\nContributor
\nJakarta<\/p>\n
Large retail chains keep on expanding<\/p>\n
Like other nations in Asia and other parts of the world, the
\nretail industry in Indonesia has evolved significantly from poor
\ntraditional markets and modest kiosks to sophisticated
\nhypermarkets and superstores.<\/p>\n
People are now more accustomed to shop for daily necessities
\nsuch as sugar, canned foods, soap and other products in malls
\nalthough they have to join a long queue to pay for their
\npurchases.<\/p>\n
Although most business sectors are still in a grave condition
\ndue to the economic crisis which has afflicted the country since
\nlate 1997, the retail sector is on a rebound.<\/p>\n
Many big players have been engaged in major expansion
\nprojects. The growing retail sector, however, has stimulated
\nfierce competition among retail giants such as Matahari, Hero,
\nAlfa, Rimo, Ramayana, Goro, ClubStore, Makro, Carrefour, Diamond,
\nPasaraya, Sarinah, Indomaret and Sogo.<\/p>\n
PT Hero Supermarket's legal and corporate secretary Poedji
\nI.H. Prasetyo said the company, which focused on retail food
\nproducts, would keep on expanding to take advantage of the
\ngrowing business.<\/p>\n
"There are currently only some 30 million people or one-sixth
\nof Indonesia's population of 210 million, who spend their money
\nat modern markets. So there are good prospects," she said, adding
\nthat this year rivalry among retailers had been increasing,
\nresulting in greater choice for consumers.<\/p>\n
Poedji said this year business was generally stagnant due to
\nthe political and economic conditions as well as electricity, gas
\nand labor costs.<\/p>\n
"As an old player, Hero will be more aggressive in the
\nfollowing year as competition will be stiffer. We still look for
\nnew opportunities and offer competitive prices to our customers,"
\nshe said.<\/p>\n
She added that Hero had the advantage of having maintained its
\nposition as a leading player in the retail food sector in the
\nlast three decades through competitive prices and a well-
\norganized distribution system and supplies.<\/p>\n
Poedji, however, declined to reveal Hero's market share,
\nsaying there were no accurate figures.<\/p>\n
Hero was established in 1971 as a small shop. It became the
\ncountry's first supermarket and now operates 79 Hero outlets, 53
\nGuardian drugstores and 31 Star Mart convenience stores. Next
\nyear Hero will add up to 10 outlets.<\/p>\n
The tight competition has brought many benefits to customers,
\nespecially to those who are smart and have creative shopping
\nhabits.<\/p>\n
"For some people including my family, shopping is a kind of
\nfun activity. We go to hypermarkets like Carrefour just for
\nrecreation, but I prefer to buy goods at Makro as I know it
\noffers cheaper prices for certain goods," said Nancy Harris, a
\nmother of two.<\/p>\n
She said supermarkets were now sending brochures by mail,
\nboasting cheaper prices for certain products.<\/p>\n
"But I believe they set higher prices for other products. I
\nthink other people also realize this gimmick. So I only buy the
\npromoted product and go to other stores for other goods," she
\nsaid.<\/p>\n
Another consumer, Lidya Chandra, admitted she liked to shop
\nbut bought only from selected retailers for low prices only.<\/p>\n
"Sometimes I don't mind shopping at traditional markets for
\ndaily needs as they still offer the best prices," she said.<\/p>\n
Lidya added there were also other reasons to shop wisely,
\nsaying that some supermarkets offered memberships or discount
\ncards, and that in some places children were not allowed entry.<\/p>\n
"I think comparison is important. Just because a shop has a
\n'sale' doesn't mean the prices are cheaper than another stores. I
\nusually try to consider quality and value, not just price. Paying
\nmore for something that will last twice as long makes sense," she
\nsaid. She added warranties and service also played a role in
\nshopping.<\/p>\n
One of the main challenges retailers face is the space rental
\nfee. It is understandable if a retailer sets a competitive price
\nfor a particular product but puts a higher price on other
\nproducts compared to its rivals as they still have to profit.<\/p>\n
The domestic retail industry is expected to enjoy a sales
\nturnover of approximately Rp 36.7 trillion (about US$3.5 billion)
\nthis year, of which 32.3 percent will be generated by
\nhypermarkets such as Carrefour and Makro, according to a survey
\nconducted by Business Intelligence Report (BIRO).<\/p>\n
BIRO said in a statement earlier last week, over the next four
\nyears turnover would more than double, reaching Rp 87.5 trillion
\nin 2005. By that time, hypermarkets will account for 38.5 percent
\nof the total sales turnover, causing a contraction in other
\nretail categories such as supermarkets, department stores, mini-
\nmarkets, and convenience stores.<\/p>\n
The survey was conducted over a period of three months,
\nbetween August and October, among 1,855 outlets owned by 532
\ncompanies, which were categorized under supermarkets, department
\nstores, mini-markets, convenience stores, and hypermarkets.<\/p>\n
BIRO said that the growth of the retail business was due to
\nmarket expansion, increased buying power, and the anticipated
\nhigher prices of goods in the next four years.<\/p>\n
In Asia, Indonesia's retail business ranks seventh out of 10
\nAsian countries outside Japan, while India ranks second after
\nChina.<\/p>",
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