JAKARTA – Wanting to take part in increasing economic development in Indonesia has pushed retail industry to expand throughout the country. PT Sumber Alfaria Trijaya Tbk, the owner of Alfamart Alfamidi retail network also takes part. It is no surprise if minimarket presence often seen to grow side by side and can grow together to fulfil the need and hope of consumer through healthy competition.
Alfamart GM for Corporate Communication Nur Rachman said, according to Nielsen data, the average of minimarket growth in Indonesia per year until September 2015 is at 12.7 percent. “This is higher than supermarket and hypermarket with 3.6 percent growth,” he said in Friday (20/11/2015).
This is because minimarket growth does not need big space with investment starting from Rp 400 million, exclude location fee, community can own Alfamart store franchise.
“The existence of minimarket options within community definitely enables the management to offer competitive and benefiting product selling price to consumer,” he said.
In determining location, the company applies a concept of the Perfect Competitive Market (PCM) model in economic principle. This PCM model is defined as the most ideal market form, whereas one of the characteristic is that in one market we can find more than one entrepreneur who offers homogeny product or service.
Besides applying this PCM principle, the close location can save money for entrepreneur on research fee and feasible study prior to opening new location.
“Whenever Alfamart minimarket or others has opened a location, it is certain how that location has good market potential and passed the business feasibility test. It means, if other minimarket would want to add store within that location, they do not have to do similar research,” he said.
In determining the feasibility of minimarket location, we considers few things, the density of community / total families living in that location, traffic surrounding minimarket, the right segment of target and supportive social environment.
This closeness indirectly has given community easy access to choose or compare prices, product, quality, or service offered. At the end, minimarket business can fairly compete in satisfying consumer and offer fair price.
According to Nur Rachman, there are some benefit of having many minimarket in one area. Community are being assisted to fulfil daily primary needs. Not only that, local workforce are hired. “This is because each store hires 8-10 employees, outside office employee. Per September 2015, Alfamart employee has reached 103,683 people,” he explained.
Moreover, minimarket also provide the convenience of paying bills such as electricity bill, water, telephone, cable TV, tax, financial credit, train ticket purchase, and airfare ticket booking payment.
The existence of minimarket in an area also benefit local UMKM, in country producers, and local government. Minimarket gives space to small vendor to sell as tenant in their porch store with affordable rent fee.
To home industry, company gives opportunity to local entrepreneur to become supplier of Home Brand Private Label (HBPL) product. Right now there are more than 100 suppliers originating from UMKM. “To UMKM, a capacity building done around the store through Outlet Binaan Alfamart (OBA) program,” Nur Rachman said.
The benefit of minimarket to producers are its network has significant role to supply products from in country producers to end consumer (end user) throughout the country.
“Nielsen data per September 2015 has shown, for Fast Moving Consumer Goods (FMCG) other than cigarette, minimarket has 27.4 percent of market share, while supermarket/hypermarket is at 14 percent, and traditional market is at 58.6 percent. This shows, opportunity to market product within retail network who has wide reach will stimulate production growth of the product itself, hence this will contribute positively toward Indonesia economy growth,” he explained.
Contribution to government namely to country income post through Value Added Tax of store transaction and to Pendapatan Asli Daerah (PAD) through Property tax (PBB), building permit (IMB), Advertisement Tax, Retribution, etc.
“As national retail company, we try to make Alfamart existence can keep benefiting wide communities, especially community surrounds us,” exclaimed Nur Rachman.