Matahari striving to meet challenge from foreigners

JAKARTA (JP): Retail giant Matahari Group chairman Hari Darmawan said on Sunday his group was striving to answer the challenge posed by the presence of aggressive foreign retail chains in the local market.

"We have employed a concept emphasizing pleasing customers and enabling them to be happy during their shopping, and it works," Hari said, adding that there has been a significant rise in the number of customers at Matahari stores.

He said the presence of foreign retail chains in Indonesia caused local retail companies to suffer a drop in turnover because customers preferred to shop at the foreign outlets due to lower prices.

"Mega M, one of our outlets at the Pluit Mega Mall here, for example, suffered a 40 percent drop in turnover over the past two months after the opening of a Continent hypermarket here in March," Hari said at Mega Mall in North Jakarta.

Matahari Group, which has assets of some Rp 3 trillion, runs several chains, including Matahari, Galleria, Yaohan and Mega M.

Promodes, the French retail giant which operates the Continent hypermarket, opened its second outlet in Jakarta in Mega Mall Pluit in March. It opened its third outlet in Plaza Cempaka Mas in Central Jakarta on July 14.

Hari said Continent was able to price its goods lower than local supermarkets by selling in larger quantities.

"They only need to realize a slight profit on items sold by employing the concept of mass selling," Hari said, adding that the foreign retail giant also had a superior store layout.

"Their stores better manage the goods on the shelves and have superior store lighting. For example, their store lighting is brighter than ours," he said.

After working to improve the image of its stores, "customers are again coming to the Mega M supermarket. Their numbers now reach about 20,000 per day on the average, compared to only 1,000 customers per day in March and April," he said.

One of Mega M's efforts to attract customers was a fish fiesta, which was held on Sunday. The promotional event allowed customers who spent a minimum of Rp 20,000 at the store to grab as many fish as they could in one minute.

An artificial fish pond was set up on the store's ground floor, and there were also a number of huts with palm roofs from which items were sold.

Hari said the event succeeded in bringing back customers who had been shopping at Continent.

"We will continue with other strategies to compete with the foreign chains," he said.

Meanwhile, customers who visited Mega M supermarket on Sunday said they preferred to visit stores which sold cheaper items.

"The change of layout here does not entice me to shop here," Sumardi said.

Sumardi, who was shopping at Mega M with his wife, two children and mother-in-law , said he went to Continent because they offered more and cheaper items. "But, some items like biscuits are cheaper here."

Another customer, Fatimah, 40, said he comes to Mega M to buy clothes, but he purchases his daily necessities at Continent.

"Mega M and also Matahari have more clothes," said the resident of Teluk Gong in North Jakarta, who was shopping with her children on Sunday.

The debate on the presence of foreign retail giants here heated up recently after a number of local retailers accused hypermarket operators of dumping their goods.

However, foreign retailers said they were able to sell items at lower prices by trimming their profit margin.

Matahari Group has 73 stores in 32 cities across the country and is set to expand its business to Yemen. Stores under the Matahari Group sell a wide range of products, from electronics to daily necessities. (asa)