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ncouraged by Indonesia’s strong economic growth and a rising middle class, Malaysian retailer Parkson Retail Group is planning to establish a foothold in the country by investing US$15 million to open five new stores next year, a company executive says. “We are very bullish about the Indonesian market as the political stability has provided a fantastic foundation for the growth of the private sector, “ Parkson Retail Group’s managing director, Datuk Alfred Cheng, told The Jakarta Post on Wednesday.

“Indonesia has been the most attractive country for investors as consumers’ purchasing power has been growing very quickly,” he added.

Parkson has a total of 108 stores spread across Malaysia, China and Vietnam. In September 2013, Parkson will open its first store in Indonesia, which will be located in The St. Moritz within the Puri CBD in West Jakarta.

The three-floor Parkson store, with an area of 17.101 square meters, has an approximate investment value of $2.5 million, according to Cheng.

“The five stores due to open next year will comprise one or two Parkson stores and three Centro outlets,” said Parkson Retail Group’s executive director, Toh Peng Koon, referring to the company’s two retail-store brands. He added that Parkson would target the middle- and upper-class market, while Centro would aim at the middle-class market.

At an early stage of its expansion, Parkson bought Centro Department Store from Indonesia’s retail chain, the Sentosa Group — which also managed The Body Shop — in June 2011.

According to Koon, the company will only focus the expansion of the Parkson chain in Jakarta, Surabaya and Medan in its early years, while for Centro, the company is planning to penetrate four cities in Indonesia, in Sumatra, Kalimantan and Sulawesi.

Centro currently has eight stores spread across Greater Jakarta, Yogyakarta, Bali and Surabaya,
East Java.

“We will open one Centro outlet in Surakarta, Central Java, this year and in Pekanbaru, Riau, by early next year,” said Koon.

The Parkson Retail Group booked $852 million in revenue in 2011, an increase from $767 million
a year earlier.

According to Cheng, Parkson’s retail chain in Indonesia contributed less than 3 percent of the company’s total sales last year, while its stores in China contributed around 70 percent of the company’s revenue.

“We are aiming to quadruple our sales in Indonesia over the next few years,” said Cheng. “I think Indonesia with its 240 million inhabitants can easily accommodate Parkson and Centro stores,” he said. “Of course, it will take time but we are very optimistic about the country’s market,” he added.

Cheng also mentioned that Parkson would be opening a store in Cambodia in the second quarter of next year.

“We like big markets and we like countries with big populations, like China, Vietnam and Indonesia. Although Singapore is a very advanced country and offers us opportunities, we have no plans as yet to establish a store there,” said Cheng. (nad)