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LUXURIOUS SHOPPING MALLS AND RESTAURANTS: JAKARTA’S CHIEF ATTRACTION


Friday December 22, 2006

At year-end, family and office gatherings for Christmas and the New Year are the order of the day for most people. Which means buying presents, new clothes, food and drinks. All that will result in endless shopping sprees for clothes, foods and presents, or gatherings in restaurants. In this regard, life in metropolitan Jakarta is no exception. 

This year super de-luxe malls have mushroomed. To name a few: the Pondok Indah Mall II, Kelapa Gading Mall, Senayan City Center, Sudirman Plaza, the Belezza, are all luxurious malls, that are filled with upper class boutiques offering the latest trends and top brand names in fashion and cosmetics, gourmet dining, down to a large variety of simpler food outlets from noodles to pizza, ice cream, fried chicken, provincial foods, sate, gado-gado to hamburgers. These are the huge malls mostly in the center of the city. In the meantime, the Jakarta Government has also modernized the traditional popular textile center at Tanah Abang and transformed it into a modern shopping block. 

Then, as Jakarta spreads its estates and construction into the suburbs and neighbouring provinces of Banten and Bekasi, smaller shopping centers are added to cater to the capital’s more than 12 million inhabitants.  Moreover, as subway and bus-way constructions are ongoing all over Jakarta and obstruct the flow of traffic- causing more and more unendurable traffic jams, - most people now prefer to shop at these suburbs malls that cater to all needs and taste of local communities. These shopping centers are now gaily bedecked with Christmas decorations inviting visitors to spend, spend and spend some more. 

In each of these malls, as well as in high-rise office towers are normally found a large number of restaurants, from the luxurious resto’s to simple outlets at food courts, catering to every taste – both international and local - and to every budget. All these are usually seen almost always packed with office staff and shoppers during the day, and more shoppers and diners in the evening.

 


For, in addition to its own population, crowded Jakarta caters yearly to 9 million domestic tourists and about one million foreign visitors. It is small wonder, therefore, that the Hotel and Restaurant Association reports that Jakarta ’s restaurants are increasing rapidly. And Indonesians are known to love shopping and food. In 2003, the capital counted 2,014 food and beverage business units, which increased to 2,134 in 2004, and today in 2006 the city counts 2,344 units. Most restaurants are found in South Jakarta, followed by Central Jakarta’s business and embassy district, then North Jakarta, West Jakarta, and finally East Jakarta , which has the least.   

 


According to statistics, the average foreign tourist spent US$ 174.74 or some 19.5% of total spending per day for food and beverage, reports Bisnis . This is not yet counting the budgets spent by Jakarta ’s inhabitants and domestic tourists. Consequently, the restaurant business outlook looks most promising. Chairperson of ’s Hotel and Restaurant Association, Yanti Sukamdani, predicts that more chain restaurants will be established in Jakarta in 2007. The Association will also begin to classify restaurants according to the star system in line with established custom for hotels.

 


Luxurious Malls sprouting all over Jakarta

 


Meanwhile, as to malls and shopping centers development,
A. Stevanus Ridwan, director of publicly listed property developer PT Pakuwon Jati, said recently in a Seminar in Jakarta, that Indonesia currently has one of the highest retail outlet growths in the Asia Pacific - at 17.5% growth, reported Ika Krismantari for the Jakarta Post. This compares to 11.8% for , 12% in the , 8.6% in and 7% in .

 

 

"This is a sign that has the potential to become a shopping destination that provides a wide variety of outlets," Stevanus said.  Of the 90 modern shopping centers in , 50 are located in Jakarta . Compared with Bangkok, , which has a ratio of 1 mall for every 171,000 inhabitants, Jakarta , with a ratio of 1 per 372,000 inhabitants, still has the opportunity to further increase retail space. 

Nonetheless, with all these shopping opportunities at hand, Indonesians and many Jakarta inhabitants still prefer to shop in or Kuala Lumpur . Although the Jakarta Administration has been active to promote the capital as a shopper’s paradise, yet still too many drawbacks exist that hamper its attractiveness as a tourist destination for shopping, said Stevanus. Major drawback is Jakarta ’s chaotic transportation system and endless traffic jams, which act as a disincentive for visitors as they waste precious time stuck on the road. 

"No one can compete with Singapore in offering services to tourists as it provides tax refunds, while we, on the contrary, oblige visitors to pay more and more," continued Stevanus . No wonder therefore, he added, that so many Indonesians are going to to shop. The Indonesian Shopping Center Developers Association (APPBI) estimates that Indonesian shoppers will spend up to Rp 8 trillion (US$888 million) this year in , compared to about Rp 6 trillion in 2003. (See also Indonesia Digest 34.06 on the lavish spending habits of Indonesians overseas)

 

 

To make as interesting as for shoppers, Stevanus urged the government to do its homework and review such things as the taxes and local government charges on retail sales and services that only served to make more expensive for tourists. He also urged the government to jazz up its campaign to promote Indonesian tourism, including promoting Jakarta .

 

 

"We are aware that there are still problems that dissuade tourists from coming here. However, we will do our best to make the necessary changes," Jakarta Deputy Governor Fauzi Bowo replied.  He added that Jakarta needed up to Rp 110 trillion in investment this year including for infrastructure development, of which the administration could only provide Rp 9 trillion. "We hope we can look to the retail industry in Jakarta for help," he told reporters on the sidelines of the seminar.

 

 

 

However, to lure more investors in the retail sector to , Stevanus said the government needed to provide legal certainty, reduce electricity, gas and water costs, and eliminate unnecessary charges. According to APPBI, at present there are 13 different local government charges that must be paid by developers wishing to build a mall.

 

 

Despite all the obstacles, Indonesian Retailers Association (Aprindo) chairman Handaka Santosa said that he was upbeat about growth in the retail industry next year as a lot of foreign retailers were poised to enter the market. He forecast that by the end of this year there will be a 20% increase in retail sales estimate to reach Rp 50 trillion, compared to last year's Rp 42 trillion.

 

 

To be Competitive, Jakarta must Reposition, build Government-Private Sector Partnership

 

 

In a recent Seminar on Developing Tourism in Jakarta held on 13 December, Care Tourism Chairman, Sri Mulyono Herlambang emphasized that to make Jakarta more competitive regionally, and to attract more international visitors to the capital, Jakarta needed a fresh Blueprint for the development of its tourism.

 

 

Jakarta needs to think out thoroughly what are its strengths and weaknesses and build on its strength. Jakarta needs to reposition itself vis-à-vis the region and ’s new role in the world in today’s globalized community.

 

 

Urgently needed was an organization where public-private interests can collaborate in close partnership in order to create the required synergy and productivity. This organization should be led by the Governor or Vice Governor of Jakarta, also to be able to coordinate efforts made by the different government agencies at provincial and national government, from the creation of infrastructure such as roads, canals, electricity, water supply, etc. to preparing for eventualities such as floods, avian flu, to anti-terrorism measures.

 

 

In short, policies and regulations must be in place to create a conducive environment for growth of the economy and investments, which in turn will create a conducive environment for the development of tourism.

 

Sources: Bisnis , Jakarta Post)    
(Tuti Sunario)