Mall Heaven

Nov 30th, 2006, in Business & Economy, by

By 2008 there will be about eighty or ninety malls in Jakarta, up from sixty odd now, even while shoppers often prefer to go to Singapore.

A Stefanus Ridwan, a head of the Asosiasi Pengelolaan Pusat Belanja Indonesia (APPBI), the Indonesian Shopping Centres Operators' Association, said that currently there were about sixty malls in Jakarta with another crop shortly to be opening, these being Mall of Indonesia, Grand Indonesia, Mal Kelapa Gading V, Gandaria Main Street, Kota Casablanca, and Pasific Place.

The growth in the retail economy had spurred on the building of new centres, he said, but he advised that the government simplify the tax regulations for malls, so that the growth would continue. detik

Ridwan, who is also a director of property developer PT Pakuwon Jati, was reported by the Jakarta Post to have said that there was still a long road to travel before Indonesia could even think of becoming a major South-east Asian shopping destination.

The government needs to fix the chaotic transportation system, develop infrastructure and provide tax incentives for tourists.

Singapore loomed large on his mind:

No one can compete with Singapore in offering services to tourists as it provides tax refunds, while we, on the contrary, oblige visitors to pay more and more.

No wonder therefore, he went on, that so many Indonesians went to Singapore to shop.

Mall Taman Anggrek
Taman Anggrek Mall

The Indonesian Shopping Center Operators Association estimates that Indonesian shoppers will spend up to 8 trillion rupiah, or about $888 million, this year in Singapore, as compared to about 6 trillion in 2003.

To make Indonesia as interesting as Singapore for shoppers, Stevanus said the government needed to do its homework by reviewing such things as the taxes and local government charges on retail sales and services that only served to make Indonesia more expensive for tourists.

He also urged the government to jazz up its campaign promoting Indonesian tourism, which uses the slogan, "Indonesia, Ultimate in Diversity".

The government doesn't seem to have a focus. It is different with Singapore or even Malaysia, which are very serious about promoting their countries.

With regard to retail outlet growth, Indonesia currently has one of the highest growth rates in Asia and the Pacific. In the first semester of this year, retail outlet growth in Indonesia reached 17.5%, compared to 11.8% in China, 12% in the Philippines, 8.6% in Singapore, and 7% in Malaysia.

This is a sign that Indonesia has the potential to become a shopping destination that provides a wide variety of outlets.

The Jakarta city government, which has been promoting the city as a shopping destination since 2005, says it is going to review its local government charges so as to make the capital more attractive to visiting overseas shoppers.

We are aware that there are still problems that dissuade tourists from coming here. However, we will do our best to make the necessary changes.

said Jakarta deputy governor Fauzi Bowo.

He added that Jakarta needed up to 110 trillion rupiah in investment this year, of which the administration could only provide 9 trillion.

We hope we can look to the retail industry in Jakarta for help.

Of the ninety odd modern shopping centers in Indonesia, sixty are located in Jakarta. Compared with Bangkok, Thailand, which has a ratio of 1 mall for every 171,000 inhabitants, Jakarta, with a ratio of 1 per 372,000 inhabitants, still had the opportunity to further increase retail space.

However, to lure more investors in the retail sector to Indonesia, Stevanus said the government needed to provide legal certainty, reduce electricity, gas and water costs, and eliminate unnecessary charges.

According to APPBI, at present there are 13 different local government charges that must be paid by developers wishing to build a mall.

Despite all the obstacles, Indonesian Retailers Association (Aprindo) chairman Handaka Santosa said that he was upbeat about growth in the retail industry next year as a lot of foreign retailers were poised to enter the market.

He forecast that by the end of this year there would be a 20% increase in retail sales to 50 trillion rupiah, as compared to 42 trillion in 2005.


10 Comments on “Mall Heaven”

  1. avatar gil says:

    Brilliant! Carry on building those random buildings and shape the nation to be a consumer society. Keep up the good work peeps.. NOT!

  2. avatar Ihaknt says:

    Wouldnt it be better if the money goes into education????? or is it not enough money to be corrupted in that field?

    Indonesia, where are you going honey? Pemerintah, please stop stuffing your pockets!! Think about your people. That’s what you are paid for!!!

  3. avatar Dimp says:

    Hmm…

    I heard that these malls were used as collateral for loans that far exceed the value of the loans.

  4. avatar 1ndra says:

    Well with so much malls, I doubt the kiosk owners inside the malls will get their BEP too long.
    And it’s so ironic when Jakarta have so much malls but the inhabitants tend to shop abroad.

  5. avatar HK says:

    It’s amazing that Indonesia’s mall growth can even exceed the world’s highest growing economy that is China, and there are even more number of wealthy individuals in China and there are developed cities there than in Indonesia. What is the matter with the govt? It’s like they don’t know how to manage anything and they seem to lack the national pride in them that would propel them to lift up its people to reach their potential capabilities and be able to march proudly to its competitiveness to the global world.

  6. avatar Mohammed Khafi says:

    HK said:

    What is the matter with the govt? It’s like they don’t know how to manage anything and they seem to lack the national pride in them that would propel them to lift up its people to reach their potential capabilities and be able to march proudly to its competitiveness to the global world.

    It is simply a matter of what puts the most money in their pockets! Building services and infrastructure for the benefit of the population, have no shhort term benefits for their bank accounts, under the table payments from Property Developers has, quite simple really.

    National Pride? Just read some of the comments on here, it appears to be a commodity in short supply, if people are not selling out to make a fast buck, they are selling their national pride to follow Arabic religious traditions! And that may also be related to the fast buck except the black oily Middle Eastern kind.

    Peace

  7. avatar Maya says:


    “they are selling their national pride to follow Arabic religious traditions!”

    By Arabic Religous traditions, i take you mean Muslims?

    Indonesia may be 90% Muslims, but only by their I.D. cards. They are not only lacking in culture but also religion. Have you not seen Malaysia? Look at how much their country is boosting in tourism. They restrict inernational celebrities from wearing certain attire, they are not afraid to stand for what they believe… which you would refer to as “Arabic Religous Traditons”.

    I go to Indonesia every year and i have never seen any sign of the people following arabic culture or even “traditions”. All i see are people desperately trying to imitate to western world.

    So before you decide to blame it all on ethnicity and religion, get the facts right thanks.

  8. avatar zekky says:

    i have never seen any sign of the people following arabic culture or even “traditions”. All i see are people desperately trying to imitate to western world.

    I suppose you don’t spend much time with the hajis? Many Indonesians do follow the West, but a huge number are also conforming increasingly to Middle Eastern Islam/culture.

  9. avatar zekky says:

    look at how much their country is boosting in tourism. They restrict inernational celebrities from wearing certain attire, they are not afraid to stand for what they believe… which you would refer to as “Arabic Religous Traditons”.

    I don’t think “moral Malaysia” is what drives tourism. It’s just a rich, lucky country, with good infrastructure thanks to Britain (instead of bloody Dutch in Indo).

  10. avatar Astrajingga says:

    I don’t think “moral Malaysia” is what drives tourism. It’s just a rich, lucky country, with good infrastructure thanks to Britain (instead of bloody Dutch in Indo).

    Britton, colonize us!
    Please!
    Now!

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