More foreign retail chains likely to enter Indonesia<\/p>\n
JAKARTA (JP): More of the world's major retail chains are
\nlikely to open in Indonesia in the coming years despite the
\ngovernment's ban on their direct operation, says an executive of
\na retail property developer.<\/p>\n
Wong Meng Sean, the marketing manager of the Mulia Group's
\nretail property division, said here yesterday one of the retail
\nchains would most likely be K-Mart, a major retail chain in the
\nUnited States.<\/p>\n
\"Indonesia is becoming more attractive to overseas retail
\nindustry not only due to the growing number of people in its
\nmiddle income group but also due to its cheaper retail property,\"
\nhe told newsmen in a break during a two-day shopping center
\nforum, which started on Monday.<\/p>\n
Wong was one of the speakers at the forum. Other speakers
\nincluded a number of executives of local and foreign retail
\ncompanies, such as Margareth Widelock, the chief executive of
\nSingapore-based Addison Asia, Stuart Lloyd, the managing director
\nof the Singapore-based Lloyd Martin Creating Consulting firm and
\nMike Connely of PT Chubb Lips Indonesia.<\/p>\n
A number of large, foreign retailers are operating in the
\ncountry, through franchising agreements, with local partners in
\nspite of the government's policy to prohibit their direct
\noperation. Those companies include Guardian Pharmacy and Metro,
\nboth of Singapore, The Body Shop of Britain, Yaohan, Sogo and
\nSaebu, all of Japan, and Makro of the Netherlands.<\/p>\n
Most of these companies are engaged in cooperation
\narrangements, such as technical and franchising agreements, to
\nenable them to pass through the legal barrier.<\/p>\n
Wong said more foreign retailers are likely to enter Indonesia
\nin the coming years through such cooperation arrangements.<\/p>\n
Threat<\/p>\n
\"The presence of major, foreign retailers is, in fact, not a
\nthreat to local companies because of the difference in their
\ntarget market,\" he said.<\/p>\n
Wong estimated that the retail industry would continue to grow
\nin Indonesia, especially in cities such as Jakarta, Surabaya,
\nYogyakarta, Denpasar and Medan.<\/p>\n
In Jakarta alone, there will be at least five major shopping
\ncenters opening next year, with an area of 60,000 square meters
\neach, he said, describing the high growth in the retail industry
\nin the country.<\/p>\n
The new shopping centers, which are now under construction,
\ninclude Senayan Square, near the Senayan sports stadium, BNI
\nCity, near the BNI building on Jl. Sudirman, Mega Pluit in North
\nJakarta, Lippo Village in Tangerang and Taman Anggrek Mall in
\nTomang, West Jakarta.<\/p>\n
He said improvements in Jakarta's traffic systems, as well as
\nthe bordering areas of Tangerang, Depok, Bogor and Bekasi, all in
\nthe West Java province, will make the city a major shopping
\ndestination in Southeast Asia due to its expanding population.<\/p>\n
\"This is one of the reasons why Jakarta is so attractive to
\nforeign retailers,\" he said, adding that the low prices of both
\ngoods and retail outlets have also turned shopping centers in
\nJakarta more profitable than those in other Asian countries such
\nas Singapore, a major shopping hub in Southeast Asia.<\/p>\n
He estimated that the increase in the number of modern
\nshopping outlets in Jakarta would discourage wealthy Indonesians
\nfrom going shopping in Singapore.<\/p>\n
\"The price of the same goods, with the same quality, is very
\nmuch lower in Jakarta than in Singapore,\" he said about the
\ncompetitive edge of the shopping business in the capital.(hen)<\/p>",
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