Shopping malls turn into recreational sites
Shopping malls turn into recreational sites
A few years ago, Jakarta experienced a mega-shopping mall boom. How is the situation today? Is it feasible to develop new shopping malls? The Jakarta Post looks into the issue. More stories on Page 7.
By Rita A. Widiadana and Sri Wahyuni
JAKARTA (JP): Shopping malls have recently become popular recreational sites for Jakartans.
Ten years ago, a shopping center with only a department store, a supermarket and small shops could attract crowds. But demand has changed. Consumers demand a place that has assorted stores and a variety of entertainment and leisure activities in one air- conditioned complex.
Megananda, an executive and a mother of two, said she often brings her family to malls on the weekend and holidays.
"Going to a shopping center on weekends is almost obligatory for our family. We save time by doing our shopping there. It is very practical," Megananda said.
Many shopping centers, she added, also provide entertainment for both adults and children, so her entire family is happy.
Harry Ciptadi, a 37-year-old banker, said that he went to shop for high-quality brand names and his daily necessities at malls.
A number of shopping malls in Jakarta meet these requirements. Plaza Indonesia in Central Jakarta was the first shopping center in town to be built with the super-block concept linking the mall with a five-star hotel and office building. Its 40,000-square- meters of shopping area is home to 300 shops, including a Sogo department store, a Times Bookstore, a Hero Supermarket, a Sega entertainment place, a food court and boutiques selling international brand names and other luxury goods.
Sylvia Ratulangie, the corporate secretary of PT Plaza Realty which manages Plaza Indonesia, told The Jakarta Post that after five years of operation, Plaza Indonesia's 17,000 visitors a day see it as a family shopping center for middle and upper-class Jakartans.
"We try to keep adjusting our products and services to consumer demands and shopping trends," Sylvia said.
The Pondok Indah Mall in South Jakarta, is another place where Jakartans hang out.
"A modern shopping center must offer a large variety of attractions otherwise it is very hard to draw potential clients," deputy general manager Wibyakto said.
The 45,000-square-meter mall has 200 tenants, including several anchor tenants like the Singaporean-franchise Metro department store, Marks and Spencers and the Gunung Agung Bookstore. The mall has a cinema complex, water park and swimming pool, a fitness center, a museum and even a day care for babies and toddlers.
The mall receives an average of 25,000 people a day. The number increases to 40,000 on weekends and holidays.
Citraland in West Jakarta and Bintaro Plaza, Blok M Plaza and Blok M Mall in South Jakarta are also favorite shopping destinations.
Opportunity
Although the number of shopping centers has met consumer demand, many investors believe there is still huge opportunities in developing more shopping malls. In the last few years, Jakarta has experienced a mega-shopping mall boom.
Two mega-malls, Plaza Senayan and MegaPasaraya, opened late last month and several other massive shopping malls will open throughout the city early next year. The planned shopping malls include Kelapa Gading and Pluit Mega Mall in North Jakarta, Super Mall Lippo Village Galleria and Taman Anggrek Mall in West Jakarta and Pasadena Mall in East Jakarta, each of which has more than 10,000 square meters of new retail space.
When these new shopping centers are completed in the middle of next year, Jakarta will have 1.5 million square meters of retail space.
According to a Collier Jardine property consultant, the construction of new shopping malls is still economically feasible. As compared to Singapore, available shopping center space in Jakarta is still at a minimum. Singapore has only four million people but two million square meters of shopping space. Jakarta, whose population is expected to reach 10 million by the year 2,000, has less than one million square meters to serve over 8.5 million people.
The demand for modern shopping centers is directly related to the growth in Jakarta's middle and upper-class. Although Indonesia's per capita income is only US$800, disposable income among the urban rich is extremely high. In Jakarta, for example, 25 percent of the total population spends between $1,776 and $4,200 a year.
The increased spending power of the middle and upper income bracket makes building shopping centers profitable and therefore very competitive.
"Rapid development of shopping centers will continue if the number of people who can afford consumer goods also grows," Budi Sugarda from the Management Institution of the University of Indonesia said.
Sugarda added that it is normal for the demand for convenience to increase because many Jakartans can afford to pay for good quality and good service.
"The question is whether they spend most of their income on consumer goods. Don't they think about saving their money or investing it in profitable business activities?" Sugarda asked.
He said consumer habits have changed markedly with the growth of shopping malls. "People would likely be more consumptive," he speculated.
Sugarda, however, said that the development of mega-malls will destroy small retailers, especially family-run businesses.
"Traditional stores and family-run shops will hardly survive as people prefer to go to the more comfortable shopping malls which sell similar products at a lower price," he said. This has already happened in the United States and Europe, he added.
Suryadharma Ali, the secretary-general of the Indonesian Retail Merchants Association, told the Post that many retailers are skeptical that the new space will ever be put to good use.
Try telling that to Megananda's family.