More foreign retail chains likely to enter Indonesia
More foreign retail chains likely to enter Indonesia
JAKARTA (JP): More of the world's major retail chains are
likely to open in Indonesia in the coming years despite the
government's ban on their direct operation, says an executive of
a retail property developer.
Wong Meng Sean, the marketing manager of the Mulia Group's
retail property division, said here yesterday one of the retail
chains would most likely be K-Mart, a major retail chain in the
United States.
"Indonesia is becoming more attractive to overseas retail
industry not only due to the growing number of people in its
middle income group but also due to its cheaper retail property,"
he told newsmen in a break during a two-day shopping center
forum, which started on Monday.
Wong was one of the speakers at the forum. Other speakers
included a number of executives of local and foreign retail
companies, such as Margareth Widelock, the chief executive of
Singapore-based Addison Asia, Stuart Lloyd, the managing director
of the Singapore-based Lloyd Martin Creating Consulting firm and
Mike Connely of PT Chubb Lips Indonesia.
A number of large, foreign retailers are operating in the
country, through franchising agreements, with local partners in
spite of the government's policy to prohibit their direct
operation. Those companies include Guardian Pharmacy and Metro,
both of Singapore, The Body Shop of Britain, Yaohan, Sogo and
Saebu, all of Japan, and Makro of the Netherlands.
Most of these companies are engaged in cooperation
arrangements, such as technical and franchising agreements, to
enable them to pass through the legal barrier.
Wong said more foreign retailers are likely to enter Indonesia
in the coming years through such cooperation arrangements.
Threat
"The presence of major, foreign retailers is, in fact, not a
threat to local companies because of the difference in their
target market," he said.
Wong estimated that the retail industry would continue to grow
in Indonesia, especially in cities such as Jakarta, Surabaya,
Yogyakarta, Denpasar and Medan.
In Jakarta alone, there will be at least five major shopping
centers opening next year, with an area of 60,000 square meters
each, he said, describing the high growth in the retail industry
in the country.
The new shopping centers, which are now under construction,
include Senayan Square, near the Senayan sports stadium, BNI
City, near the BNI building on Jl. Sudirman, Mega Pluit in North
Jakarta, Lippo Village in Tangerang and Taman Anggrek Mall in
Tomang, West Jakarta.
He said improvements in Jakarta's traffic systems, as well as
the bordering areas of Tangerang, Depok, Bogor and Bekasi, all in
the West Java province, will make the city a major shopping
destination in Southeast Asia due to its expanding population.
"This is one of the reasons why Jakarta is so attractive to
foreign retailers," he said, adding that the low prices of both
goods and retail outlets have also turned shopping centers in
Jakarta more profitable than those in other Asian countries such
as Singapore, a major shopping hub in Southeast Asia.
He estimated that the increase in the number of modern
shopping outlets in Jakarta would discourage wealthy Indonesians
from going shopping in Singapore.
"The price of the same goods, with the same quality, is very
much lower in Jakarta than in Singapore," he said about the
competitive edge of the shopping business in the capital.(hen)