South Korea’s leading retailer, Lotte Department Store, will open four new department stores outside Jakarta within the next few years to take advantage of the country’s growing economy, a senior company executive said.
If the plan is realized, the company will have five stores in Indonesia by 2018.
“With a population of more than 200 million and high economic growth, Indonesia is a large retail market,” Lotte Department Store Indonesia president Suh Chang-suk told reporters in Jakarta on Tuesday.
He said that this year alone Indonesian retail sales are expected to grow by about 20 percent due to overall economic momentum.
Chang, however, declined to mention the names of the cities that would host the stores. He added that the company would increase the number if it received a positive response from the Indonesian market.
Lotte Department Store plans to invest US$27 million in the first year to manage its first department store in the country. The company will lease the entire Ciputra World mall area in South Jakarta for 20 years for the department store.
“We will offer a new shopping paradigm for Indonesian consumers, with new shopping areas where costumers will receive the trendiest fashion information. We will also build a customer-centered store focusing on customer needs,” he said, adding that the company would partner with local retailers and the fashion industry.
According to Chang, the first Lotte Department Store will start commercial operations by the end of 2012.
“Providing facilities such as cultural courses, self-development programs and a VIP concierge service, Lotte Department Store would be the preferred choice for Indonesian youth and families to shop,” he said.
The Korean company has for years engaged in the supermarket business in Indonesia. Lotte Group acquired Dutch wholesaler Makro operating in Indonesia in 2008, which it later transformed into the rapidly developing hypermarket Lotte Mart.
Lotte Mart has since operated 19 wholesalers it had acquired from Makro in major cities in Indonesia, including Bandung, Banjarmasin, Denpasar, Yogyakarta, Jakarta, Makassar, Medan, Palembang, Pekanbaru and Surabaya.
First opening in 1979, Lotte is the leading retailer under Lotte Group, which is the fifth largest conglomerate in South Korea after Samsung, Hyundai Motor, SK and LG. Lotte Department Store has captured a 44 percent share of the Korean domestic market.
Lotte has opened 31 stores in Korea and four stores overseas, including in Moscow, Beijing, Tianjin and Ho Chi Minh. Four other projects in China, Vietnam, Russia and Indonesia are still under construction.