Since its presence in Indonesia, Carrefour is always to meet a variety of problems. This French retailer recognizes the public's perception of Carrefour is still not good.
The entry of the French retail companies has led to fears of traditional market position very close to the people of Indonesia.
Shafei Shamsuddin, Carrefour Indonesia chairman and also the first Asian to lead Carrefour, try to eliminate gap between traditional markets of SMEs and Carrefour's
How and what the future plan of Carrefour Indonesia, including decisions about which state it KPPU guilty of violating the Anti Monopoly Law? The following interview with Shafei detikFinance at Hotel Kristal, Jalan Terogong Raya Cilandak, Jakarta, Tuesday (15/12/2009).
How would you feel to be the new President of Carrefour and became the first Asian to lead Carrefour?
For me this is a mandate of how I am as an Asian man should give the best examples. This is a trial and a challenge for me. This is a mandate and trust given to me from the French to work hard to give the best for all, including for the suppliers and employees
As more Asian people to understand the Europeans, I have more hard work and give the best to them. That's what I want to do here.
I realized that the main challenge for me to the lead Carrefour in Indonesia is our image is bad. Our presence will disrupt valued traditional markets and SMEs. Maybe it's our fault too, because in the past we were not asking them (SMEs and traditional markets) to joint. So the challenge for me is to hold them and embrace them to provide assistance.
Another challenge, is the alleged cases of alleged monopoly KPPU to us it was not truth.
Why are you so sure that Carrefour did not make a monopoly on Indonesia?
Share Market….because we are not more than 50% as charged KPPU. Carrefour did not have a monopoly position and is not dominant. That's not our words, but based on the results of an independent institution that is AC Nielsen. They mention our market share in modern retail before the acquisition is only for 14.5 percent, while after the acquisition of 17 percent.
Moreover, Alfa business is relatively small so that after being acquired by Carrefour did not make Carrefour becomes dominant. Alfa 30 outlets are now owned by Carrefour's contribution is only about 10 percent because of the size of small stores is only half the size of the outlets are already owned by Carrefour and have some of the less strategic location.
In addition, the whole process of acquisition of Alfa, we already meet the rule of law, particularly through the Bapepam (Indonesia Capital Market Supervisory Agency) and in accordance with the procedure. I also wonder why we called monopoly. And in Indonesia is not only one but also there is other modern retailers such as Giant, Hypermart, and people can choose where to shopping.
So we propose this to the court that the decision should be reviewed. KPPU did not examine all the evidence, facts, data, witnesses and research results that have been submitted to the KPPU when deciding this.
In any investigation we also feel a bit complicated because of this case since the beginning of the examination until the formation of the tribunal headed by the same person. It's like the police, prosecutors and judges are held by the same person.
So far, how about the progress?
They say next week will begin the first trial. Later we will add back all the evidence and facts that we have bring to the court.
We are confident the court will give the best decision. If Carrefour win does Carrefour will sue KPPU?
I can not answer that, because it is still process. But we wish it all could be settled peacefully.
If you lose something?
Yes, we will continue to strive to a higher court again.
Yesterday our CEO in France, Lars Olofsson also met President Susilo Bambang Yudhoyono. We just said we're confident the court will make a decision. We just felt a bit complicated because we are convinced by the facts that exist, and we've been investing for a long time, since 1998. When people leave out but we are still here, this shows that we are committed.
So, if Indonesia wanted many investors were here we should be judged properly, properly punished.
Does this meeting is intended to ask the defense of the President? of course not. When asked defense, it was just we do not believe in the law in Indonesia, we believe the law here.
KPPU decision to divest ownership in Alfa Carrefour Retailindo, Does Carrefour will carry it out? If you want to release to whom?
We have not yet thought to go there because it still process. The important thing we do now is doing approach with traditional markets and SMEs. We will engage them.
If we look at Indonesia people only 70 million, or just 40 percent of the population of Indonesia shop in modern market. The rest, they still shop at traditional markets. So the traditional market potential is still large. The problem is how modern market can help traditional market as we shall co-operation next year.
At present this cooperation pattern is still developed. But in this cooperation, we would give them system, the layout of product placement to be more neat, improvement of the management and hygiene market with the consumer. So we'll synergy.
You say that today only 40 percent of the population of Indonesia who went shopping at modern retail, if you look at this how growth the potential of modern retail in the future?
In Singapore, with small area and small population, more than 90 percent of the people shopping at modern retail. But in Indonesia I can not see that. If one day could be 50 percent and it can not be achieved in one year, but may be 5-10 years.
In Malaysia and Singapore, their habits are often to hypermarkets, while in Indonesia, so many still shopping at traditional markets. So in fact, the traditional market will be more advance if they can change the pattern, the layout system, and Carrefour will help, as I said earlier.
To encourage the growth of modern retail sector, what should government do?
In my opinion, may be the important things aid to concern is the issue of electricity cost, may be in some place sometimes insufficient power. We heard PLN will raise the electricity tariff and It is so difficult for the retailer because we have to increase our cost per year.
We are not having a lot of profit. Retail like us small profits, if there is profit, in other outlet loss. Long period of time for us to make a profit, especially if there is store expansion will take longer to get profit. So the electricity cost as if they rise around 20 percent, it is very high as we can not raise a lot of profit like that every year. That means our profits will fall, if fall we can not longer the expansion. So we must ask the government to consider this. We are ready to communicate the electricity tariffs should not raise so high.
Second, maybe I as the local-oriented retailers, we must have a stable where uu reply if we have a long contract like we have 20 years to make the retail is still there during the contract period. if there is a 20-year contract should not be us if we were expelled means no stability in Indonesia. For example, we are in the process related issues at the Mega Mall Pluit, our front desk where the contract is closed but we were still there. Still a long time but why we can not continue and that means there is no stability.
What is their reason?
The reason we did not follow the law the government. And we do not receive a letter from the government stating that we were violating the Act. For example they told us the field area larger than 8,000 square meters, while there about 6950 square meters.
So we do not violate the Act. The proof, the government does not give a warrant to stop business there. We did not receive a letter from the government, so we still have license on it. So we are in the right circumstances. We have license, so if the Lippo Village told us to close, we do not understand and where the stability in Indonesia. The government does not give a notice, why there are parties who are not even drive our government.
Now in the process of law. But who profits? we were lucky but the Lippo Village is not profit, in his shopping mall there, too slow, consumers are also not lucky. So how can more rapid growth if there like this, we as a victim but we believe the law would give a fair punishment so we stay here and committed.
During the present in Indonesia, Carrefour many legal issues, how the response and why did this happen?
Maybe that's what we will ask Mr. President, we believe in the law so we are not afraid to sit together to talk about the law. For example Lippo village, we only make a business but others wanted to evict us for no reason and also because when viewed KPPU fact we've run a business legally. Probably from our side there are also shortcomings. We must also correction ourselves.
Carrefour perception like what is not good. Maybe we're not meeting with the SMEs and traditional markets. Perhaps before this, we're not making it. So that's what makes us less good perception and may either be related how with the law.
But that's only my opinion, because if you see the facts I was not there. In fact our market share right but not exactly true. We did not break the law but practically broke and we did not receive a letter from the government about the violation. That's my assumption.
How do you see legal certainty in the retail sector?
I think we should wait. Maybe the government will provide explanations. Right now we are still talking through a forum of communication with associations and the government. I myself have communicated and give my opinion about the retail Act.
I think well, some of exchange that we must follow the government parties and give a reply maybe we should continue to provide suppliers and retailers to negotiation. We have to have it healthy. Do not let all be the same. That's not healthy in the future. So should be balance.
Does it happen in Carrefour, raid affected annually expired food, even to the court? Why does this happen?
We have a process to check that everything done by the quality or related issues. We check every week, month and per 3 months. There are processes and the audits we have. There may be an oversight on the part of us and that we can accept. But that certainly was not intended to sell the goods expired. We can not make it because we did not benefit us. If consumers can make their own decisions, they will stop and will go elsewhere.
Hence we can not monopoly. A lot of our challenges, Carrefour's products more than 40 thousand products. Of these 40 thousand, maybe there are some existing stock might be an oversight. But we have a strong checking process, but human mistakes may occur.
So we also have rules in Carrefour every week, every month and every 3 months there are checks and audits. Suduah check if they do not belong to expire. If there is, perhaps human oversight.
As for competition, according to you, who is the most severe competitor?
Maybe we see is Alfamart and Indomart. They are the greatest challenges because they exist everywhere, not like Carrefour. We are not concerned with the Giant, and Hypermart because they have the same ability with the Act Carrefour, but Indomart little that can go anywhere, but we can not. But we understand they will be more advanced, even we feel they would give a great challenge to us.
Are there plans for a local retailer acquired more?
We must finish this issue. We have not seen the other side. Later if the acquisition is said monopoly anymore.
From 76 outlets Carrefour's, not all profit. There are 11 Carrefour 4 losses and other outlets closed?
There are some places that are not good. Yes maybe we think it happened because the location is not strategic and may be less competitive than other retail side. This proves that the monopoly does not Carrefour and Carrefour to Close. If we see once again the data, Carrefour not monopoly, because we could be lose.
So what steps to re-grow Carrefour outlets that had nearly collapsed that?
We will provide added value there. We have to make a difference with the other competitors, like yesterday we launched Carrefour Market. Examples of healthy living programs that have been tried in Lebak Bulus, where we provide a place for costumer for free health check if they shopped several tens of thousands. This can help the customer and they can benefit as health checks. We can also give advice to them how to live healthy. This is different than the competitors. This is just the three of our front desk is in cempaka Mas, MT Haryono and Lebak Bulus.
In addition, today I will try to fix the poor perception of Carrefour. The official I apologize to stakeholders if there is Carrefour for something less good. We have the opportunity to fix what is missing and love the opportunity to study in Indonesia.
I am committed to the future will be closer to the traditional markets and SMEs. I believe we also did an oversight.
Does the revising term of trading policy is one of solution at Carrefour?
It's one that will be corrected. We're talking with the association and the Ministry of Trade. I've given input and committed to soften it. Early first and second week of next year will be reported to suppliers especially in SMEs.
There are no plans to add more outlets?
We will open our outlets wherever needed. If needed in Padang, we'll go there. Now we are looking for a good location there.
That's for next year?
It is back again to certain parties. First, consumers would not see Carrefour there. If so, we met local government. If they agree, yes, we are ready. Obviously we are more realistic because until now we were not good perception.
Source: http://www.detikfinance.com/read/2009/12/17/103136/1261766/459/presdir-carrefour-
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