Great sales! Shop until you drop

Arif T. Syam, Contributor, Jakarta

Are you a window shopper or a shopaholic? If you are the latter, you will be in your element during the Jakarta Great Sale. During this event, which will be held from mid-June to mid- July, shopping centers in Jakarta will compete with one another to slash prices for buyers.

In addition, to draw shoppers, a series of attractive entertainment programs will be held in shopping centers, ranging from the presence of celebrities to a variety of contests. In short, Jakarta will be a haven for shoppers.

Jakarta Great Sale, held in conjunction with Jakarta City's anniversary, has been designed along with other programs held in the city's recreational centers and several housing complexes in the city.

Jakarta has recently witnessed the emergence of many new shopping centers. Almost every day there are advertisements in the print media about the opening of these centers or the commencement of the construction of a new mall.

Sometimes the advertisements give information about certain programs and special discounts.

A look at the growing number of structures being built will show that the Jakarta residents in particular and Indonesians in general, are being increasingly pampered. The greater number of centers also means keener competition. At the end of the day, buyers will be able to enjoy the most competitive prices.

The trend in the construction of shopping centers has also caused some worries among economists because many kiosks and stalls are unoccupied, closed, or offered for sale or for rent.

This situation gives the impression that investment in the construction of these buildings has been wasted or there are huge bad debts involved.

In spite of this, construction never seems to stop. An illustration of this is the annual report issued by PT Procon Indah indicates that this year there will be many more shops and kiosks that remain unoccupied.

As many new buildings housing shopping centers have emerged, the supply of kiosks that these buildings offer has also risen.

The report says that up to December 2004, Jakarta had a supply of 1.89 million m2 of buildings for shopping centers. In Depok, Bogor, Tangerang and Bekasi -- or Debotabek - the supply of shopping center space has risen to 567,000 m2. In 2005, it is estimated that the combined supply of space in Jakarta and Debotabek will almost double to 3.47 million m2.

According to the report, around 427,860 m2 of the entire shopping center space provided in Jakarta and Debotabek will be unoccupied.

This means that the occupancy rate has yet to reach 90 percent of the total supply, or, to be precise, this rate stands at only 82 percent to 83 percent. A greater area is expected to remain unoccupied as more new malls or shopping centers emerge.

"These shopping centers need some time to reach the optimum occupancy rate," said Lini Djafar, director of PT Procon Indah. As a result, the average occupancy rate in these areas will drop.

According to PT Procon Indah, Jakarta will see the emergence of new shopping centers like Roxy Square, Mangga Dua Square and Tanah Abang Wholesaler Center. Meanwhile, Debotabek will witness the opening of Plaza Sinar Merdeka Mas, Mahkota Trade Center and ITC BSD this year.

PT Procon Indah issued a report in 2003 flashing a red light at the property industry in the retail sector warning of the great amount of unoccupied space in shopping centers.

However, as time went on, businesspeople were increasingly upbeat about Indonesia's economic conditions and there was an increase in the sales of kiosk space in shopping centers.

The building management of shopping centers realize the need to organize events to attract the public. They often use one or two anchor tenants to attract visitors. These anchor tenants will also attract other vendors to set up business in these centers.

The emergence of combined mall and shop-office blocks like Megaglodok Kemayoran (MGK) is interesting, observers say. MGK has been built using a totally different concept from that used in other shopping centers. Intended to serve as a shopping center for industrial products and electronic goods, which are usually found only in Glodok, Kota, the mall should also have competitive prices because many of the Glodok traders are expanding their business there.

"We have built a mall with a different concept from other malls or shopping centers that are springing up fast everywhere," said Suhandi, the marketing director of MGK. MGK is also much cleaner and more modern in appearance than the traditional, dirty, crowded and run-down Glodok-Kota area. Not surprisingly, all the spaces in MGK were sold by September last year.

In addition, MGK Mall will also house the Indonesian Marine Center (IMC), which will be the only one of its kind in Indonesia. The IMC, a center dedicated to promoting boat-building fishing and other sea-based activities, will occupy an entire floor. "Hopefully, the IMC will encourage the revival of the maritime industry in Indonesia," Suhandi said.

Location is vital to determine whether a shopping center will attract vendors or visitors. Bekasi Trade Center (BTC), which is located close to the East Bekasi exit toll gate has no competitor in the area. The BTC has taken only a short time to attract visitors although it has no anchor tenant. A similar situation is found at the Cililitan Wholesale Center (PGC). Around the PGC you can find only the Ramayana Shopping Center and Kramat Jati traditional market, both less attractive in appearance.

Another factor that can attract both vendors and visitors to a shopping center is the promotional programs the building management organizes. Many shopping centers organize these events frequently to attract visitors.

Print ads or banners put up on the roadsides are commonly used to keep the punters rolling in. Generally, these malls organize entertainment programs or invite celebrities for a meet-the-fans event.

"Meet-the-fans programs are quite effective in attracting visitors to a new shopping center," said Sandi Ariandi of Benang Merah Communications, a marketing-communications company that has organized similar events in a shopping center in North Jakarta.

Kelapa Gading Mall (MKG) organizes these programs every month.

The Jakarta Great Sale, of course, is a mega-version of this kind of promotional event. The sale organizers hope to change the shopping atmosphere the entire city, creating a more colorful and competitive environment.

The question mall operators must ask themselves is how prepared are they? Will they make use of this opportunity or will they simply let it pass without leaving any impression on prospective visitors or buyers?