Chairul, who owns the expanding Para Group, is targeting to open 10,000 convenience stores in 10 years through the business group's retail unit PT Trans Retail. His entry in the retail business has raised pros and cons.

Retail analysts consider his business expansion into the country's massive retail industry as normal practice from an investor who sees the retail industry has not been fully untapped.

Indonesia, with its high population and growing middle class, is among the most attractive retail markets in the world. No wonder the competition in the country's retail market is getting fiercer day by day.

This year, minimarket chain Indomart is targeting to open 750 new outlets while its main competitor Alfamart plans to open 600 new outlets. Both minimarket chains operate their outlets through franchising contracts.

In the bigger market segment such as in hypermarkets and supermarkets, the competition is also growing, especially between Matahari, the operator of Hypermart, and Carrefour.

With support from Chairul, one of 1,000 richest people in the world according to Forbes magazine and two new members of the board of commissioners, which includes former National Police chief Bimantoro, and former State Intelligence Agency chief Hendropriyono, Carrefour has both the money and the political muscle to support its expansion plan.

"This year, our target is to build 13 new hypermarket outlets, including in Pontianak, which is the first outlet in Kalimantan," Carrefour head of external communications Hendri Satrio told The Jakarta Post over the phone.

Hendri added that Carrefour Indonesia, which controlled a 40 percent market share in the hypermarket segment, planned to add 20 new outlets each year in the company's expansion agenda.

Regarding Carrefour's expansion plan, consultant company Nielsen Indonesia president director Yongki Suryo Susilo said the competition is normal as every player in the market would try to strengthen their foothold in the growing retail business.

He said that Indonesia is one of the most attractive retail markets in the world. According to him, the modern market in the country is growing and will continue to expand due the increase in the size of the country's middle class as well as changes in lifestyles.

Yongki believed even with the expansion of such big players as Alfamart and Indomart in the minimarket segment and Carrefour and Matahari in the hypermarket and supermarket segments, the country's retail business still has plenty of room for new players.

Association of Retail Business (Aprindo) head of hypermarket department Danny Kojongian agreed with Yongki that Indonesia was still a potential market for new retail players to invest in.

"South Korea retail company Lotte and Carrefour are both interested in entering the country's retail sector because they see that Indonesia, with a population of more than 230 million, is as a very promising market," Danny said, adding that Aprindo predicted that the modern market will expand by at least 15 percent a year.

Lotte, which bought Makro Indonesia in 2008, targets to build 30 new hypermarket class outlets by the end of 2015 with a total investment value of US$860 million.

Danny, who is also PT Matahari Putra Prima (MPPA) director of corporate communications, believes that retail players in the country had to take full advantages of the growing economy by expanding their business so that they would not be left behind.

MPPA's Hypermart, which currently operates 47 stores in the hypermarket sector, has allocated about Rp 900 billion ($97.8 million) to add 15 new outlets, targeted to be finished in the second quarter next year.

Another big player - Hero, which operates in the hypermarket sector under the brand of Giant, plans to build three new outlets this year as additions to its existing 35 outlets.

Both Danny and Yongki agreed that supermarkets were losing their market shares as more people now prefer to go shopping in one-stop shopping outlets such as hypermarkets or going to minimarkets near their residences.

However, Yongki said the situation could easily change. "Shoppers may return back to supermarkets if their operators could offer more creative marketing approaches such as by providing more convenient shopping areas and more competitive products," he said.

Currently, there are six big brands in the supermarket class - Hero, Carrefour Express, Superindo, Foodmart, Ramayana and Yogya+Griya, between them controlling a total market share of more than 75 percent.

Yongki also said that the modern market would not easily take over the domination of the traditional markets, because several surveys show the modern markets still could not compete with the traditional ones in terms of providing fresh food. (rch)

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