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T Lion Super Indo, a retail subsidiary of conglomerate Salim Group, is pushing for nationwide expansion by selling franchises of a compact version of its supermarkets, making it the first supermarket operator in the country to do so.

Super Indo, a joint venture between Indonesian conglomerate Salim Group and Dutch-based retailer Ahold Delhaize, has set an initial target to open six stores under the name Lion Express by the end of the year.

Currently, Super Indo operates 136 supermarkets nationwide. Hence, the latest expansion is being undertaken in accordance with a Trade Ministry regulation that stipulates a retail chain that has 150 outlets or more must sell franchise.

“Lion Express is a mini version of Super Indo supermarket. A franchisee will need some Rp 2.5 billion [US$190 million] to set up a Lion Express outlet, a quarter of what we need to establish a supermarket outlet,” Super Indo’s head of corporate communications and sustainability department, Yuvlinda Susanta, told The Jakarta Post recently.

Each compact supermarket will measure around 500-square-meters. As a comparison, Super Indo opened its 130th outlet in March at Courts Megastore in Bekasi that measures 1,207-square-meters.

However, Yuvlinda said Lion Express would provide all products sold at Super Indo outlets, including the company’s soon-to-be-launched private food brand Indoculinaire.

It has teamed up with dozens of small and medium enterprises from across the country to supply at least 60 products under the new brand, ranging from Toraja coffee from South Sulawesi, to teng-teng (peanut snacks) and instant nasi liwet (rice boiled in coconut milk and served with various side dishes) from East Java.

“These foods are authentic as they are directly sourced from their areas of origin,” Yuvlinda went on. “Currently, we are looking for partners in various regions to distribute more types of products in years to come.”

Moreover, Super Indo is hoping to distribute Indoculinaire products to the global market through the vast Ahold Delhaize network.

Ahold Delhaize is a merger between Dutch retailer Royal Ahold NV, which operates the American supermarket chains Stop & Shop and Giant, and Belgium-based Delhaize Group, which operates the Hannaford and Food Lion stores on the US East Coast.

The merger was announced in June 2015 and completed last month. Therefore, Ahold Delhaize currently has more than 6,500 stores around the world.

In the domestic market, Super Indo and sister company PT Indomarco Prismatama, the operator of Indomaret minimarket, compete with a number of competitors, including publicly listed retail giant PT Sumber Alfaria Trijaya, also known as Alfa Group, which owns minimarket chain Alfamart, grocery store Alfamidi and Alfa Supermarket. Alfamart alone has about 11,750 outlets nationwide.

Indonesia has significantly improved its position on the Global Retail Development Index, conducted by consulting firm AT Kearney, to fifth position this year from 12th in 2015. The index measures the attractiveness of the retail sector in developing countries.

AT Kearney partner Hana Ben-Shabat said Indonesia’s recent policies of lowering barriers in the retail sector, including e-commerce and foreign investment, were considered positive for investors amid the negative growth average of 2.3 percent in the last three years. (vps)