A Novel Course for Shopping Centers and Modern Stores
    Category: Column By : Eddy Leks Read : 852 Date : Friday, January 16, 2015 - 18:30:17

    It is normal, especially for people living in Jakarta, to visit malls during weekdays or more frequently on weekends. People meet friends and families, watch movies, eat out, shop or just enjoy the atmosphere. Visiting and hanging out at malls are part of urban Indonesians’ lifestyle. It is not uncommon to see malls are fully packed, especially around the holiday seasons.

    Former Minister of Trade M. Lufti states that Indonesia has many modern shopping centers across the country as a response to the swift increase of buying power. Under the Socialization of Minister of Trade Regulation on Guidance of Organization and Development of Traditional Market, Shopping Centers and Modern Stores on 19 March 2014, the government sets a novel course that affect all the owners and managers of modern stores and shopping centers. The regulation was promulgated in December 2013 and became effective June 12, 2014. The new regulation has several provisions of concern for owners and managers of modern stores such as minimarkets, supermarkets and department stores.

    Zoning is now highly relevant. Any shopping centers and modern stores should follow zoning rules. The local government is authorized to determine the minimum distance between traditional markets and newer shopping centers and other modern retail outlets.

    A developer is allowed to set up a stand-alone shopping centers and modern stores or modern stores that are integrated with traditional markets, shopping centers or other buildings. The regulation provides harder requirements to stand-alone shopping centers and modern stores.

    One of the debatable subjects is the obligation imposed to modern stores to sell supporting goods of its main business not more than 10% of its total goods sold in their outlets. There is however a way out of this provisions by obtaining permission from the minister.

    Through the new regulation, government also stipulates the minimum trading terms between the supplier and modern stores. These minimum requirements are useful for both parties since they provide certainty. The regulation also sets boundaries on the expenses that can be imposed to the suppliers. Shopping centers and modern stores are required to act fairly and properly in providing services to their partners, either as owners, lessee or suppliers, according to the agreement between the parties.

    This regulation also encourages micro, small, and medium enterprises (UMKM). Entrepreneurs may establish self-owned and self-managed modern stores of not more than 150 outlets. If it exceeds 150 outlets, the entrepreneurs have to partner with a UMKM. Further, modern stores have to prioritize the supply of domestic goods produced by UMKM as long as it fulfills the modern stores’ requirements. Further stipulation is on the limitation over private label of modern stores which cannot exceed 15% of the total sold goods in the outlets, unless there is a partnership with UMKM.

    The novel course set by the government is not without flaws—but is a step that should be praised. UMKM are one of the main drivers of the economy, and shopping centers and modern stores are one of the essential stakeholders to help local brands to flourish.