Retail market expands to small cities

August 9th, 2008 alaksir Posted in Indonesian news in English |

Click here for the original article in Indonesian.

Jakarta, 8 August 2008 - Retail property businesses such as shopping malls are becoming increasingly aggressive to expand their market to growing cities, as economic growth and consumption pattern in these places are showing significant potentials for retail property products.

These were the conclusion of the Head of Research at Jones Lang LaSalle Anton Sitorus on Thursday (7 Aug) in Jakarta, from a survey conducted in 25 cities–out of 60 regencies/cities in Indonesia with over a million population. He added that regional autonomy has the potential to accelerate retail sector growth in small cities, due to population growth and increasingly consumptive lifestyle in these places.

Head of Retail at Jones Lang LaSalle Wendy Haryanto said, "Consumptive lifestyle is driven by the perception of an increasing number of families that shopping is part of their recreational activities."

Growth in shopping areas has continuously increased; total shopping area was 1.3 million square meters in 1990-1997, 1.393 million square meters in 1998-2001, and 2.8 million square meters in 2001-2007.

A survey conducted by MasterCard states that during the first semester of 2008, Indonesian retail property growth was second only to China. Cities with growing retail property include Depok, Bekasi, Bogor, Tangerang, Semarang, Solo, Denpasar, Yogyakarta, Pekanbaru, Palembang, Balikpapan and Samarinda. Cities with potential retail property growth include Batam, Manado, Padang, Bandar Lampung, Malang, Tasikmalaya and Cimahi.

Anton admitted that modern retails such as supermarket, hypermarket and minimarket will cause traditional trade sector to erode.

Translated to English from Kompas daily.

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