Central to open department store in new mall in Jakarta
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Thai retailer among key Asian firms establishing outlets in Indonesia
Indonesia is becoming a place for glossy Asian fashion and lifestyle brands seeking to showcase their merchandise.
Within a month, two large Japanese retailers, Fast Retailing, the brand owner of Uniqlo, and Aeon Mall, have set up flagship stores here.
Two other big department stores from Indonesia’s immediate neighbours, Parkson Retail Asia, headquartered in Malaysia, and Thailand-based Central Retail Corp (CRC), are also looking to open stores here next year.
Aeon Mall CEO Soichi Okazaki said Indonesia’s rosy economy had drawn the retailer to the country this year.
“The GDP [gross domestic product] of Indonesia grew by more than 6 per cent during past years and this factor influenced our decision,” he said.
Indonesia is reportedly Southeast Asia’s largest economy. With a population exceeding 240 million, McKinsey estimates that 90 million people will be rated as “consumer class”, or people with annual income surpassing US$3,600, by 2030.
Aeon has partnered with domestic property developer PT Sinar Mas Land to form PT AMSL Indonesia. AMSL will operate the flagship Aeon Mall, worth $200 million in its initial investment.
The first Aeon, located in BSD City – a residential estate owned by Sinar Mas – is due to open next year while a second mall, to be located in Kota Deltamas, Bekasi, will open in 2015.
Okazaki said Aeon was eyeing suburban hubs, turning away from urban markets jam-packed with competition.
“We see the new, middle income family as a potential customer target,” he pointed out.
Residential areas have been a draw for Parkson Retail Asia as well, yet the retailer has opted for urban dwellers.
Like other retailers, Parkson is eyeing the affluent. “The Parkson store in Indonesia targets the upper-middle to upper income segment of the market,” Alfred Cheng, group managing director of Parkson Retail Asia, said.
The retailer is also considering other first-tier cities, including Medan and Surabaya.
Parkson initially entered the domestic market with the Centro Department Store, which grew by 26 per cent sales-wise between 2011 and 2012. Cheng said it also planned to expand Centro outlets, currently numbering nine, to at least 13 other cities.
“We expect the full year 2013 sales growth to be in the strong teens,” he added.
But Thailand’s Central Retail Corporation is heading straight into the urban heart by establishing a department store in the Grand Indonesia Shopping Town, a mall in the Thamrin business district in central Jakarta.
Grand Indonesia director Murali Menon said the mall expected Central to draw “Indonesian shoppers hungry for something new”. The mall had decided to bring in Central at the request of shoppers who came across the brand during overseas trips.
Central, with their “points of differentiation”, also felt the time was right to compete in the Indonesian market, he said.
He said that Central, which will occupy a total floor space of 21,000 square-metres or 14 per cent of leased area in the east wing, would draw shoppers once it opens in September 2014.
The mall averaged a million visitors per month in 2012, up by 3 per cent on 2011.
“Central will introduce a whole new ball game in merchandising by stocking international, Thai and domestic brands,” he noted.
Besides Central, the mall will house the flagship H&M store, set to open in March 2014.
Meanwhile, Cheng noted that the domestic market was “warming to Asian brands”, and Parkson too looked to carry a mix of international and Asian brands “depending on the demand and profile of our customers”.
“One of the advantages of Asian brands is that they are more skewed to local Asian lifestyle and sizing will be spot-on.”
He said “Asian brands are on a par with their international peers” in terms of quality.
Yasuhiro Hayashi, director for business development in Southeast Asia at Uniqlo, said the brand’s focus had always been on creating outfits “made for all” regardless of “national borders and differences in ethnic groups or culture”.
He said the brand counted on its popularity in its home country to give it an edge over other brands in the domestic retail scene.
“We believe that trust toward Japanese products, combined with Uniqlo’s popularity in Japan, have served as contributing factors to our expansion in Asia,” he said.
