Most distribution networks operate in Java<\/p>\n
JAKARTA (JP): Distribution networks of manufactured goods in
\nthe country are mostly located in Java due to the lack of demand
\nin other parts of the country.<\/p>\n
According to a three-month survey conducted by research
\ncompany, Business Intelligent Report (BIRO), on 1,145 companies
\nin nine provinces, about 65 percent of the manufacturing
\ncompanies have concentrated their distribution and retail
\nnetworks in Java either through their own branches or through
\nauthorized distributors.<\/p>\n
Respondents in the survey included 924 agents and distributors
\nand 221 trading houses, covering 40 products ranging from
\nelectronic wares to heavy equipment. The survey also included
\n1,397 brand names.<\/p>\n
The companies, with most of their distribution networks in
\nJava are predominantly those producing electronic goods with over
\n2,800 outlets, automotive products and spare parts, with 1,750
\noutlets and building material with over 630 outlets.<\/p>\n
Java was also chosen as the distribution and retail center of
\ncompanies producing and selling optical products (83.7 percent),
\ntextile and textile related products (82.6 percent), medical and
\nlaboratory equipment (82.1 percent), furniture (72.6 percent),
\nmetal products (69.2 percent) and food and beverages (57.5
\npercent), the survey said.<\/p>\n
According to the survey, companies that concentrated their
\ndistribution networks in provinces like Sumatra, Kalimantan and
\nSulawesi were those dealing in heavy equipment and parts
\nsupplies.<\/p>\n
\"Manufacturers of heavy equipment and their related parts
\nconcentrate their marketing networks in the three provinces to
\nbenefit from operations of natural resources-based companies in
\nthe areas,\" said the survey.<\/p>\n
The survey also found that in the retail sector the
\ncompetition among the players was so tight that none of them
\ncould really dominate the market.<\/p>\n
\"Conglomeration in the retail sector is unavoidable as a
\nresult of the integration of the upstream and downstream sectors
\nby several firms. However, no retailer can really control the
\nmarket because the market is so fragmented,\" it said.<\/p>\n
The survey indicated that most trading companies opened their
\nown logistics and retail divisions to cut operational costs.<\/p>\n
Local giant consumer goods distributor Tigaraksa, for example,
\nhas logistics company TNT Logistic, and hypermarket Carrefour to
\ndistribute and sell its goods.<\/p>\n
Another local business empire, the Salim Group, also operates
\ngrocery chains under the flag of Indo Grosir, supermarket chains
\nSuper Indo and minimarket chains Indomaret and trading house
\nIndomarco to distribute and market its consumer goods.<\/p>\n
The survey also found that these giant business groups also
\nexpanded their retail operations by acquiring stakes in foreign
\nretailers such as the France-based Carrefour, partly owned by
\nTigaraksa, and Price Mart, partly owned by Wicaksana.<\/p>\n
Renown local supermarket and department store operators like
\nHero Supermarket, Matahari and Ramayana were focusing their
\nbusinesses on their own retail services and had not merged with
\nlocal or foreign trading houses.<\/p>\n
It said that local retailers should not be too worried about
\nthe recent entrance of big foreign retailers because the latter
\ncould not dominate the market.<\/p>\n
Several foreign retailers such as Japanese Yaohan, WalMart,
\nNTUC and Singapore-based Lion have been forced to pull out of the
\ncountry for failure to compete with local retailers.<\/p>\n
The survey said product distribution networks in the country
\nwas expected to be more efficient in the near future thanks to
\nthe adoption of information technology by many of the country's
\nmanufacturers and retailers.<\/p>\n
Business Intelligence Report said that the total sales in the
\ndomestic retail sector reached Rp 140.8 trillion, contributing
\nabout 12.6 percent of the country's Gross Domestic Product (GDP).<\/p>\n
The research company estimated the per capita consumption in
\nthe country would increase to Rp 2.9 million this year from Rp
\n2.3 million in 1999. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/most-distribution-networks-operate-in-java-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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