Some shopping centers fail amid tight battle
Some shopping centers fail amid tight battle
JAKARTA (JP): Many shopping centers have lagged behind the rapid growth in the Indonesian retail industry because they lack proper strategy and creativity.
Some shopping centers, like Ratu Plaza and Aldiron Plaza in South Jakarta, and Menteng Plaza and Atrium Plaza in Central Jakarta, now struggle to draw tenants let alone shoppers.
In the l980s, Ratu Plaza was a prestigious shopping center where Jakarta's most affluent customers spent their money. It was also a popular place for expatriates who lived and worked nearby the shopping center.
Ratu Plaza, managed by PT Ratu Sayang International, consists of an office block, a luxurious apartment building, a cinema and entertainment complex, and a shopping center.
In the past, Ratu Plaza's tenants ranged from exclusive boutiques selling brand-name fashion items, watches and jewelry to local retailers Matahari Department Store and later Hero supermarket. Ratu Plaza's other attractions were electronic, sports and hobby stores.
But Ratu Plaza has now lost its previous charm. Many shops are empty and its anchor tenants Matahari Department store, Benetton fashion house and Gunung Agung bookstore have also left.
Suryadharma Ali, secretary general of the Indonesian Retail Merchants Association, said that Ratu Plaza's management was late in anticipating the rapid growth in the retail industry.
The opening of two major shopping complexes, Plaza Indonesia on Jl. Thamrin in Central Jakarta and Blok M Plaza in Kebayoran Baru affected Ratu Plaza's activities. The new shopping complexes offered different shopping concepts and better atmosphere. Their buildings are more impressive and luxurious, attracting larger crowds as well as potential tenants from Ratu Plaza and other old shopping centers.
Another mall that has failed is Atrium Plaza in Senen, Central Jakarta. The shopping center was designed for the middle and upper class bracket and it tenants included the Japanese- franchise Yaohan department store and several international brand boutiques. After only a year of operation, however, the mall has failed to attract shoppers.
Location
Kafi Kurnia, a retail business expert, was quoted by Prospek magazine as saying that the management of Atrium Plaza did not consider location an important factor. Senen has an image as a crowded place plagued by traffic jams and a high crime rate. Many people are therefore reluctant to visit. The lack of visitors has forced many tenants, including anchor tenant Yaohan, to close their outlets.
"Operating a shopping center is very difficult. It requires innovation and creativity in order to meet changing customer demand," Suryadharma said.
Shopping center owners must have bold strategies to keep up with current business trends in both Indonesia and the world, he pointed out.
Suryadharma said that the trends set by Western countries will spread worldwide, including Indonesia. The shopping mall concept is derived from the United States, Japan and Europe, was his example.
"The growing number of shopping malls in the city has forced local entrepreneurs to change their business concept, otherwise they could hardly survive," he assured.
Th Antonius, a property observer, added that a number of factors influence the retail industry. The factors include location, business orientation, building design, tenant mix and management.
Location, he said, plays an important role in determining the success of a shopping center. Nobody will come to a shopping center if it is located in a crowded area, he said.
He also said that business orientation will help shopping center owners decide their target markets. Appropriate building design and tenant mix is also significant in attracting potential customers.
"But the most important thing lies in the management. Poor management will ruin a shopping center," he said. (raw)