Riots ruining the retail sector<\/p>\n
The retail sector is part of the backbone of the country's
\neconomy. But the sector is ailing now, as retailers see their
\noperations shrinking and delay expansion due to the economic,
\npolitical and social storm that has swept the country. The
\nJakarta Post's team Benget Simbolon, Budiman Moerdijat, Devi M.
\nAsmarani, Ida Indawati Khouw, Primastuti Handayani, Reiner
\nSimanjuntak, Sugianto Tandra and P.J. Leo uncover the fears and
\ntribulations afflicting the industry's players here.<\/p>\n
JAKARTA (JP): Once was enough for siblings Hendra and Aming,
\nwhen they decided in July to rebuild their razed electronics shop
\nlocated in the heart of the Jakarta Chinatown district, Kota, in
\nWest Jakarta.<\/p>\n
Pelangi Audio, a family business built up in the last 20
\nyears, was looted and destroyed by angry mobs in the mid-May
\nunrest.<\/p>\n
Hoping to avoid similar misfortune, which had cost them Rp 900
\nmillion (US$121,621) in losses, the brothers furnished the new
\nstore with fireproof materials for the front door and the roof,
\nlike many of their neighboring shopowners.<\/p>\n
Tragedy, however, seems to be dogging their path.<\/p>\n
When more unrest erupted on Nov. 14, a day after a fatal
\nmilitary showdown quashed a massive student protest, the store
\nbecame a target again for the riotous mobs. This time, it was
\nsaved from total destruction.<\/p>\n
A week later the brothers found their business in the teeth of
\nanother round of rioting as a clash between ethnic groups in the
\nKetapang area, West Jakarta, intensified into a church-burning
\nand property-destruction orgy.<\/p>\n
\"We are so traumatized by the experiences that we don't dare
\ndisplay all our merchandise in the store anymore,\" Hendra said.<\/p>\n
Customers are now only shown catalogs before they decide on
\ntheir choice during transactions, prior to the items being picked
\nup from a house in Grogol, West Jakarta.<\/p>\n
Apprehension stemming from heightening political tensions has
\nforced retailers to limit the display of goods in their stores.<\/p>\n
This is especially felt among the ethnic Chinese community,
\nwhich largely controls the retail sector, and which for decades
\nhas been targeted during social disorder.<\/p>\n
Retailer Tatang Setianto says he too no longer displays all
\nthe merchandise in his electronic components shop in Tangerang,
\nWest Java.<\/p>\n
\"I place some of them, especially the expensive items, in the
\nstore room. I will only serve customers who are seriously
\nsearching for an item,\" Tatang said.<\/p>\n
Deborah, who runs the Concorde Toys baby and toy products
\noutlet at the International Trade Center (ITC), Mangga Dua in
\nWest Jakarta, says she is particularly reducing the inventory of
\nimported products at her store.<\/p>\n
But even as shop owners are getting smarter and more cautious,
\nit does not mean they are free of daily worries over more riotous
\noutbreaks.<\/p>\n
Deborah said retailers are on constant alert against possible
\nupheaval.<\/p>\n
\"The mass media particularly TV and radio are our sources of
\ninformation. But we have also developed a kind of information
\nnetwork among retailers here,\" she said.<\/p>\n
Anxiety affects their sales, as the unrest has deterred
\ncustomers from shopping in certain riot-prone areas like the
\nbustling commercial district of Chinatown.<\/p>\n
Deborah said the tempest in the last two weeks had caused a 70
\npercent drop in turnover.<\/p>\n
Setyadi Surya, the director of human resources and public
\nrelations of PT Ramayana Lestari Sentosa, said unrest had largely
\naffected customers psychologically.<\/p>\n
\"Riots and high crime rates disturb the people's peace, even
\nwhen shopping,\" Setyadi said.<\/p>\n
Ramayana, one of the country's largest retail chains, had
\nsuffered the most in the May riots.<\/p>\n
Twelve of its outlets were burned, and 14 were looted and
\nvandalized, incurring up to Rp 100 billion in total losses.<\/p>\n
The store did not suffer any material losses in the last two
\noutbreaks.<\/p>\n
The 14 stores which were looted have begun operation again,
\nwhile the 12 razed ones had not been rebuilt.<\/p>\n
The publicly-listed Ramayana had planned to open a new outlet
\nin Cengkareng, West Jakarta to replace the burned outlets, but it
\nis delaying the plan until security improves, Setyadi said.<\/p>\n
Security<\/p>\n
It is general knowledge that retail businesses cannot survive
\nwithout political stability.<\/p>\n
\"Retail business in this country is actually promising because
\nof the large population, but without security it's nothing,\" says
\nRudi Sumampow, a spokesperson of the Matahari department store.<\/p>\n
The lack of confidence in the government and its ability to
\nensure security has delayed many expansion or even reconstruction
\nplans in the retail sector.<\/p>\n
Matahari, a competitor of Ramayana, had no plans to rebuild
\nits six stores burned in the May riots, Rudi said.<\/p>\n
Three of Matahari's six outlets are located in Surakarta
\n(Solo), Central Java, and another three in Tangerang. The chain's
\nseven other outlets in Jakarta were also looted.<\/p>\n
Says Kustarjono Prodjolalito, the executive director of the
\nIndonesian Merchants Association (Aprindo): \"It's good enough
\nthat we can survive through this episode.\"<\/p>\n
Aprindo's members have suffered about Rp 7.5 billion in
\nfinancial losses since the four-day Special Session of the
\nPeople's Consultative Assembly on Nov. 10. The losses come from
\nboth inactive businesses -- those generating no revenues -- and
\nthe riots.<\/p>\n
This amount is in addition to Rp 661.52 billion losses
\nsuffered during the May riots, in which at least 125 stores owned
\nby the members were burned and 119 others were looted and
\nvandalized.<\/p>\n
Many retailers have chosen to wait until the end of 1999 after
\nthe planned general and presidential elections while some may
\njust have to close down some of their branches and dismiss some
\nof their employees for survival's sake.<\/p>\n
Some retailers are placing their hopes on the coming four
\nmajor events -- the Christmas, New Year, Idul Fitri and the
\nChinese New Year celebrations -- to regain the profits they've
\nlost in the recent disturbances.<\/p>\n
After the holidays, however, the stores would likely reduce
\ninventory again as the country is gearing up to complete its
\npolitical agenda, which has proven unrest-sensitive in the past.<\/p>\n
Laurensius S., the manager of the Lotte Branded Center at ITC,
\nsaid he planned to reduce inventory by 50 percent after the Idul
\nFitri Holiday as a cautionary measure against possible unrest in
\nthe run-up to the general election in May.<\/p>\n
Kustarjono said some retailers are considering moves to safer
\nplaces like the tourist haven Bali or the commercial island of
\nBatam, and some are planning to leave the country if conditions
\ndo not improve.<\/p>\n
Setyadi said he placed \"great hope in the Armed Forces\" to
\nsecure stability.<\/p>\n
But he might be one of the rare people with such optimism in
\nthe military, whose image has been tainted by its violent
\nhandling of the student movements and by allegations of human
\nrights violations in the past.<\/p>\n
While mobs were looting and vandalizing properties in mid-May,
\nsecurity personnel reportedly did very little to stop them.<\/p>\n
Recent findings are pointing to the involvement of some
\nelements within the military in the May riots.<\/p>\n
Laurensius said he was very disappointed by the government,
\nwhich had earlier promised that there would be no repeat of the
\nMay horror.<\/p>\n
\"They've given us false hope. The government's credibility is
\nnow questionable,\" he said.<\/p>\n
Similar hopelessness is envisioned by Tatang: \"There's no
\nlonger hope of doing business here, so how can we open our shops
\nwhen we are always in fear of being targeted in riots again?\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/riots-ruining-the-retail-sector-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}