Sondakh on becoming a retailing hero<\/p>\n
By I. Christianto<\/p>\n
JAKARTA (JP): Indonesia, particularly the country's capital,
\nwill not have to wait until tariffs tumble in 2003 to become a
\nmajor Asian shopping destination.<\/p>\n
Or so says Steve Sondakh, an executive of the Hero supermarket
\nchain. He believes that Indonesia has the ability to achieve the
\nmantle before 2000 as long as the government and local retailers
\nforge closer links to stimulate the country's shopping industry.<\/p>\n
\"Indonesia has already become a shopping destination. We can
\ncompete with Singapore and Hong Kong in attracting foreign
\nshoppers,\" said Steve, who has spent 25 years in the retail
\nbusiness.<\/p>\n
But greater efforts are needed before Indonesia can consider
\nitself on a par with Japan and other major shopping destinations,
\nhe said.<\/p>\n
Steve said that prices of some goods, including clothing sold
\nat shopping centers and consumer products sold at supermarkets in
\nJakarta, are now more competitive than similar items sold in Hong
\nKong or Singapore.<\/p>\n
\"The prices in Singapore have become more expensive due to the
\ncontinued increase in the value of the country's currency. Hong
\nKong has the same problem because of its high space-rental
\nrates,\" he said.<\/p>\n
\"And the professionalism of the retail business is improving
\nhere,\" he said.<\/p>\n
In Steve's eyes China has the same competitive edge as
\nIndonesia but he feels it is unlikely that it would be able to
\ncompete with Indonesia in the retail sector in the near future.<\/p>\n
\"In addition, China still has some barriers including
\ninternational language difficulties,\" Steve said.<\/p>\n
A number of leading world-class boutiques have already
\nselected China as their production sites but Steve reckons this
\nwill not be enough to turn the country into an attractive
\nshopping destination.<\/p>\n
He acknowledged that there are still many problems that must
\nbe tackled to make Indonesia as convenient a place to shop as
\nelsewhere in Asia.<\/p>\n
Traffic jams and poor services at the airport in Jakarta are
\nthe problems that usually annoy foreign visitors.<\/p>\n
\"Foreign visitors who are here for the first time will return
\nhome with a negative perception of Indonesia if they are badly
\nserved at airports,\" he said.<\/p>\n
Besides improving airport services, Indonesians should also
\nuse their renowned reputation for hospitality to serve the
\nforeigners, he said in reference to the need for improving
\nservices in the shopping business.<\/p>\n
\"Indonesians are well-known for their smiles. They (shop
\nowners) do not smile for business reasons. A dialog is valuable
\neven if there is no transaction,\" he said.<\/p>\n
Steve, born in November 1952, said that foreign retailers'
\noperations in Indonesia could help attract foreign buyers but if
\nnot managed carefully they will threaten the local retailers.<\/p>\n
\"Although the government still -- in its own way -- protects
\nlocal retailers by barring foreign investors from undertaking
\ndirect operations in Indonesia, they will swamp our market which
\n-- we have to admit -- is not yet saturated.<\/p>\n
A number of foreign retailers such as Sogo of Japan, Wal-Mart
\nand JC Penney, both of the United States and Mark & Spencer of
\nBritain have already opened their outlets here under technical
\ncooperation agreements with local firms. At least four more
\nworld-class retailers will follow suit next year.<\/p>\n
When asked about local business' strategies to counter such
\ncompetition he said, \"We have to be aware of it. I don't think we
\nhave to be scared but we do have to be a little concerned because
\nthere will be possible poaching of employees.<\/p>\n
\"We have to realize that the pie is still huge, given the
\ncontinued increase in the people's per capita income,\" he said.<\/p>\n
He also said that Indonesia, which must fully open its retail
\nindustry in 2003 to comply with its free trade arrangement
\ncommitments with other members of the Association of Southeast
\nAsian Nations (ASEAN), should make proper preparations to enable
\nit to be in a position to compete.<\/p>\n
Steve said he was upbeat that Hero, as the leading supermarket
\nchain in the country, would be able to benefit from the ASEAN
\nFree Trade Agreement, given its current strong network.<\/p>\n
\"We began the business in 1971 with just one outlet. Now we
\nhave a total of 66 outlets in 15 cities all over the country. We
\nbelieve that Hero has its faithful customers.<\/p>\n
\"A 25-year period is not a short time to establish Hero as a
\nleading retailer. But we think we now know a little about this
\nbusiness,\" said Steve, who got his formal education in the
\nNetherlands.<\/p>\n
It was Saleh Kurnia, Steve's brother-in-law, who founded Hero
\nin 1971 as a small supermarket in Kebayoran Baru in South
\nJakarta. The second outlet was opened in 1974 in the Chinatown
\ndistrict of West Jakarta and the third one began operating in
\n1976 in Gondangdia, Central Jakarta.<\/p>\n
Hero plans to run 100 outlets by 2000.<\/p>\n
Steve said that each of the Hero outlets has a floor space of
\nbetween 2,000 square meters and 3,000 square meters.<\/p>\n
\"In our early years, many people considered that Hero was just
\na place selling junk. The displays were poor. Then we learned how
\nto change the image. Now about 3,000 or 4,000 people go to Hero
\nevery day.
\n \"The art of display is never thought about at school, but it's
\nimportant. We studied how to display items and how to make it
\nconvenient and easy for shoppers to find what they want. We have
\nalso focused on the middle and upper classes as our target
\nmarket,\" he said about his past experience.<\/p>\n
\"We also took examples from similar businesses in Europe,
\nJapan and the United States. But the cultures are different. For
\nexample, Hero has to provide small quantities of jamu
\n(traditional Indonesian herbs), even though the price is cheap,
\nbecause the local customers want it.\"<\/p>\n
Steve, a father of two sons and a daughter who spends his time
\noff swimming and playing tennis, said that Hero needed 15 years
\nto establish its image as a supermarket of the middle and upper
\nclasses.<\/p>\n
He does not agree that the retail sector has socialized
\nconsumerism.<\/p>\n
\"Indonesians are now more selective. People going to
\nsupermarkets make plans. They will buy just what they want. The
\ndisplays have also to be arranged to facilitate buyers'
\nselectivity,\" he said.<\/p>\n
He also hopes consumerism will not envelop his sons who are
\nstudying in the United States. \"I recently refused to let my son
\nbuy a new car except with money he earned himself.\"<\/p>\n
Education, he said, is very important. However he admitted
\nthat his schooling has not benefited his career in practical
\nterms.<\/p>\n
\"I learned the business of retailing from practice. I did much
\nexperimenting before making a manual for Hero. Besides, only
\nlogical thinking and not management is taught at school.\"<\/p>\n
\"There are theories and manuals on the art of negotiation, for
\ninstance, but it is different for different people in different
\ncultures,\" he said.<\/p>\n
He believes that success or failure is determined by other
\npeople who know nothing about the overall process reaching their
\ntargets.<\/p>\n
\"It's great if we can reach a target within a particular
\nperiod.\"<\/p>\n
His target is now to make Hero a supermarket chain offering
\ntop quality public services and goods at the right price and in
\nconvenient locations.<\/p>",
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