Sarinah shopping center survives tough competition<\/p>\n
By Ahmed Kurnia Soeriawidjaja<\/p>\n
JAKARTA (JP): The Sarinah shopping center, a 14-story building
\non Jl. MH Thamrin in Central Jakarta, was a symbol of
\nmodernization and affluence when it was built in 1963.<\/p>\n
Sarinah was the first Indonesian shopping center equipped with
\nair conditioning and taught many Jakartans the skill of getting
\non an escalator.<\/p>\n
It became a tourist site, a place where people with limited
\nfunds could at least sightsee if not shop.<\/p>\n
Now, 30 years later, Sarinah has persevered by maintaining its
\ncharms in the memories of older Jakartans. Although many modern
\nand sophisticated shopping centers have sprouted in the city, it
\nhas survived.<\/p>\n
It may be because the largest McDonald's in Indonesia chose to
\nset up business in the building, or, because the Hard Rock Cafe
\nabsorbs one floor. The eateries and the two floors of Indonesian
\nhandicrafts draw more than 1,500 foreign visitors to the store a
\nday. The basement food court is a favorite with locals because it
\noffers traditional food and sweets like rujak Cingur from East
\nJava and pempek from Palembang.<\/p>\n
Sarinah constantly tries to retain its Indonesian image in the
\nface of globalization. Its motto, \"To Serve You And Your Family\",
\ndenotes its effort to deliver on its commitment to public
\nservice.<\/p>\n
Ilham Asid, director of operations, told The Jakarta Post,
\nthat Sarinah does not consider the modern shopping centers as
\nmain competitors.<\/p>\n
\"Sarinah is located in the city's most strategic place.
\nMoreover, we offer distinctive items including unique handicrafts
\nfrom the country's 27 provinces. Our target market is middle and
\nupper income clients as well as foreign tourists,\" Asid
\nmaintained.<\/p>\n
Local batik, wooden and stone carvings, and rattan products
\nhave become Sarinah's mainstay. About 40 percent of its Rp 150
\nmillion daily turnover comes from the sale of handicrafts.<\/p>\n
Improved management boosted annual revenue from only Rp 37.1
\nbillion in l991 to Rp 54.2 billion in l992. Revenue continued to
\nrise from Rp 67.4 billion in l993 to Rp 79.7 billion last year.
\nThe management expects to bring in Rp 90 billion this year, of
\nwhich Rp 6 billion will be profit, Asid said.<\/p>\n
Aside from retail, Sarinah has set up joint ventures with a
\nnumber of financial institutions since 1980 to support the
\ncraftspeople who supply the store. The institutions include Bank
\nDagang Negara, Asuransi Ekspor Indonesia and Danareksa.<\/p>\n
Minhad Moefti, Sarinah's finance director, said that by the
\nthird quarter of this year, Sarinah had provided Rp 5.2 billion
\nin working capital for 300 craftspeople. By the end of the year,
\nSarinah is expected to extend Rp 7.5 billion to these small-scale
\nentrepreneurs.<\/p>\n
\"We also help promote and market their handicrafts,\" Moefti
\nadded.<\/p>\n
History<\/p>\n
Sukarno, Indonesia's first president, came up with the idea of
\nbuilding Sarinah after visits to several countries. He believed
\nthat Jakarta, a growing metropolis, needed a department store.<\/p>\n
After a feasibility study was made, construction commenced in
\nApril 1963. Funding came from Japanese war reparations. Tenants
\nbegan selling on April 15, 1966, although the building was not
\ncompleted until May 1967. The shopping center was named after
\nSukarno's babysitter, Sarinah.<\/p>\n
Since then, the state-owned enterprise has established itself
\nas the pioneer of Indonesian retail.<\/p>\n
Sarinah has had its share of misfortune. In 1984 a fire broke
\nout on the sixth floor, spreading quickly to offices on the 14th
\nlevel. The fire consumed 45 percent of the company's total
\nearnings acquired from office rent.<\/p>\n
Even though the department store was spared from the fire, it
\nsuffered losses. For safety reasons, all business had to stop
\nduring the renovations. The fire threatened about 1,000 jobs.<\/p>\n
However, Sarinah made a comeback, its magic not weakened in
\nthe eyes of consumers. In early 1990 Sarinah was declared a
\nhealthy state-company.<\/p>",
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