Wed, 08 Dec 2010

From: The Jakarta Globe

By Shirley Christie
Jakarta. Carrefour Indonesia is banking on small- and medium-sized suppliers to expand its range of products in an attempt to attract more customers in Southeast Asia’s largest economy.

“We are giving as many opportunities as possible for small and medium enterprise owners [or SMEs] to have market access in Carrefour,” Chairul Tanjung, president commissioner of Carrefour Indonesia, a unit of the French retailer, said on Friday.

Trans Retail, a subsidiary of Chairul-controlled Trans Corp., bought a 40 percent stake, estimated to be worth $400 million, in Carrefour Indonesia in April.

Retailers are trying to capitalize on increasing consumer demand in Indonesia’s accelerating economy, which is forecast to expand by 6.2 percent next year.

Private consumption accounts for around two-thirds of Indonesia’s $540-billion economy.

R.M. Adji Srihandoyo, corporate affairs director at Carrefour Indonesia, meanwhile, said the company wanted to grow in tandem with SMEs.

Ninety-five percent of the products sold at Carrefour, Adji said, are produced in Indonesia, with 70 percent of those coming from SMEs.

The company sells about 40,000 types of products from 4,000 suppliers.

In May, it implemented development programs called “Pjok Rakyat” (People’s Corner) and “Bazaar Rakyat” (People’s Bazaar) that reserved shelf space for SME-supplied goods in 10 stores in Jakarta, Bandung, Surabaya, Palembang and Makassar.

Competition in Indonesia’s retail business is getting tougher as more overseas retail operators enter the market.

Matahari Putra Prima, Indonesia’s biggest retailer by market value, said it had received four bids from international retail companies, including South Korea’s Lotte Group.

The deal is valued at more than $1 billion.

Analysts say the acquisition of Matahari, which has 21 stores across Indonesia, could dethrone Carrefour as the largest hypermarket operator in Indonesia.

Aside from Trans Corp., France’s Carrefour S.A. holds a 39 percent stake in Carrefour Indonesia, while Carrefour Netherlands and Onesia BV, a subsidiary, own 9.5 percent and 11.5 percent, respectively.

The company has more than 80 stores in 22 cities nationwide.