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Tag: Indonesia

  • Yokohama at new Indonesia auto show

    Yokohama at new Indonesia auto show

    Yokohama Rubber Co. Ltd. is gearing up to participate in the new Gaikindo Indonesia International Auto Show 2015.

    The event is scheduled for Aug. 20‒30 in South Tangerang, in Indonesia’s BSD City. Yokohama said it will be represented at the show by its Indonesian sales agent, PT Yhi Indonesia, which twice previously represented the tire maker at the separate Indonesia International Motor Show. Gaikindo is the Association of Indonesia Automotive Industries, and this is its first auto show, according to Yokohama.

    In keeping with the theme of “Delivering the Future,” Yokohama said its booth will feature displays that “appeal to the high driving and environmental performance” provided by its tires’ latest technologies.xa

    Considering the huge demand for eco cars and SUVs in Indonesia, the tire maker said it will display its fuel-efficient BluEarth tires suitable for use with eco cars and the company’s Geolandar line of SUV tires, as well as its flagship Advan brand.

    In addition, the booth will include a panel of Chelsea FC soccer players promoting the tire maker’s partnership, announced earlier this month, with England’s Premier League football club.

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  • Bali prime residential prices up 15% last year

    Bali prime residential prices up 15% last year

    Prime residential prices on Bali surged 15 per cent last year, the most among comparable destinations tracked by broker Knight Frank LLP. The cost of villas on the Spanish island of Ibiza climbed 5 per cent and those in Italy’s autonomous region of Sardinia fell 8 per cent, the report said.

    Bali’s gains are set to continue as Indonesia’s government this week begins to discuss revising rules to allow foreigners to directly own luxury apartments in the archipelago, with hopes of implementing changes within two to three months.

    Mr Nathan Ryan, owner of property brokerage Bali Realty, expects interest from China and Singapore once the revisions are made.

    “Asian buyers are no doubt a sleeping giant for Indonesia,” Mr Ryan said from Kerobokan, an area north of Kuta known for its surf and nightlife. “These buyers have plenty of money, but they are turned away by the leasehold property options, as they would prefer to be able to buy freehold.”

    Currently, foreigners can get around the ban against owning real estate in Indonesia by using local citizens as proxies or by structuring the purchase as a long-term lease.

    The government will coordinate with the immigration and tax offices to draft the revisions, Coordinating Minister for Economic Affairs Sofyan Djalil said last Thursday

    Under the proposed amendments, foreigners will be allowed to buy only luxury apartments and not landed property.

    Property prices in Jakarta rose 11 per cent in March from a year earlier, Knight Frank data shows. That is the biggest gain in Asia after Bengaluru in India, where real estate costs climbed 13.6 per cent.

    “If you look at how close Jakarta is to Singapore and given that a lot of Singaporeans also work in Indonesia, there will be interest from Singaporeans,” said Ms Christine Li, director of research for Singapore at Cushman & Wakefield.

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  • Indonesia tariff ‘own goal’

    Indonesia tariff ‘own goal’

    Indonesia’s hapless government has embarked on a sudden tariff program experts agree will damage its economy and fuel inflation.

    Having just a month ago reduced taxes on luxury goods to encourage its people to spend more at home and less in overseas destinations like Singapore, now the government has slapped a range of tariffs on some 1000 popular goods categories, including cars, condoms, candy, alcohol, coffee and carpets.

    It says the move will stimulate local manufacturing by making imported goods less expensive.

    But economists – basing their comments on a long history of economic governance by Asian countries – agree the move will simply reduce spending and fuel inflation. It’s an economic own goal punishing its citizens and effectively subsidising inefficient, poor quality local producers.

    “Imposing this is out of alignment with the economic integration agenda and a step backward from the global trend of most economies forging free trade agreements towards lower tariffs, if not zero,” said Victor Tay, COO of the Singapore Business Federation.

    “Indonesia has the largest population in Asean and is also a net importer of many products.”

    Tay said imposing such barriers may protect local industry in the short term, but in the longer term might lead to local manufacturers being unable to improve their competitiveness against other regional suppliers.

    “This will not serve the greater business community well, especially if other countries start erecting their own barriers on a reciprocal basis,” he said.

    Indonesian university economist A. Prasetyantoko, concurred: “Higher import taxes would reduce the supply of goods and increase domestic prices, which would in turn further weaken buying power, then economic growth.”

    The new tariffs include:

    • 20 per cent on imported tea and coffee, raised from five per cent.
    • 30 per cent on meat, up from five per cent.
    • 50 per cent on cars, up from between 10 per cent and 40 per cent.
    • 15-20 per cent on confectionery, up from 10 per cent.
    • 150 per cent on imported liquor, previously 125,000 rupiah ($9.30) per litre.

    As one commentator in Singapore observed, the new tariffs are likely to make some Indonesians shift to having a coffee at a local coffee shop instead of at Starbucks.

    Justifying the increases, Heru Pambudi, customs and excise tax director-general, said: “Domestic industry is being overwhelmed by the flows of imported goods. We need to curb these flows so domestic products would not be outnumbered.”

  • Indonesians pressure the country’s largest telco to lower data costs

    Indonesians pressure the country’s largest telco to lower data costs

    Indonesians are pissed off about Telkomsel’s data package pricing policy. While they’re considered expensive for Jakartans, Telkomsel – Indonesia’s state-owned and largest mobile carrier – charges up to twice as much for the same amount of data if you happen to live in a bad “zone.”

    To protest this, activist Djali Gafur started a petition called “Internet for the people“. It has already accumulated over 10,000 signatures.

    Telkomsel divides the archipelago into 12 districts. Jakarta, as well as most parts of Java and the surrounding islands are in Zone 1, and tariffs actually go up as the areas get more remote. West Papua’s Raja Ampat district, for example, is in Zone 12.

    “We in Zone 12 don’t have a choice,” says Gafur in the petition on Change.org. It’s true because Telkomsel is often the sole carrier in remote areas. The others don’t even bother because the infrastructure costs outweigh the opportunities.

    Gafur demands that people in his area get access to the internet for an equal price, so that they too can participate in things like education, tourism, government, and creative industries online. “If [the connection] is a little slow, that doesn’t even matter so much,” he adds.

    Indonesia’s ICT Minister Rudiantara has since responded to the petition, and met with Telkomsel’s president director to discuss the matter, according to local media.

    Rudiantara said that the government is looking into subsidizing Telkomsel in areas where it is the only operator on the ground, supported by the Universal Service Obligation (USO) fund.

    The USO in its current form has been in place since 2005. Mobile phone carriers operating in Indonesia have to contribute 1.25 percent of their gross revenue into a shared pool, which non-profit government agencyBP3TI deploys toward connectivity programs in remote areas.

    Apparently, BP3TI is not quick enough to keep up with the demand for affordable mobile internet connectivity in the remote parts of Indonesia.

    Indonesia currently has no regulation on data tariffs, but according to Rudiantara, discussions on this will take place in 2016. In order to allocate funds from the USO to support Telkomsel in said remote zones, USO’s structure has to be changed. That will take time. For now, it’s up to Telkomsel to respond to the increasing frustration from people in zone 12.

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  • Electronic City invests online

    Electronic City invests online

    Indonesian appliance retailer PT Electronic City is to invest US$15 million on strengthening its online shopping site and to develop its back end IT infrastructure.

    It will also open another seven stores this financial year and renovate some of its existing outlets.

    Electronic City has 70 stores across Indonesia, operating in 22 cities in 15 provinces.

    The 14 year old company, which listed two years ago, has reported a stunning 600 per cent year on year increase in sales through its eCommerce site during the month-long Ramadan fasting season.

    The overall business is budgeting for 10 per cent revenue growth this year, its stores selling IT and office equipment, mobile devices, home appliances and audiovisual equipment. It holds a share of about 41 per cent of the Indonesian appliances market.

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  • Mitsubishi Shifts Focus to Smaller, Emerging Economies

    Mitsubishi Shifts Focus to Smaller, Emerging Economies

    With its decision to end auto production in the U.S., where Detroit’s Big Three and global giants dominate, Mitsubishi Motors Corp. has become the latest second-tier car maker to shift its focus away from crowded, mature markets to smaller emerging economies where there is less competition and more chance to grow.

    Japan’s sixth-biggest car maker—which produces about 1.1 million cars a year—said last week that it is ending production at its only U.S. plant, in Normal, Ill. At the same time, Mitsubishi Motors is ramping up its operations in Southeast Asia, building a plant in Indonesia and starting production this year at a factory in the Philippines that the company acquired from Ford Motor Co.
    Other small auto makers have taken a similar approach, including Suzuki Motor Corp., which largely withdrew from the U.S. market in 2012 to concentrate on places such as India, where it is the market leader, and Daihatsu Motor Co., which abandoned the U.S. two decades ago to focus on markets such as Indonesia.

    “We have a long history in Thailand, Indonesia and the Philippines, a larger market share compared to other regions, and a strong brand image, which are very big advantages,” Mitsubishi Motors Chief Executive Osamu Masuko said in an interview earlier this year.

    The expanding population and growth potential in the region are also attractive, he said. In addition to fast-growing markets such as Indonesia, he cited future prospects in countries such as Myanmar, Cambodia and Laos, which until now have barely featured in auto makers’ global strategies.

    Mitsubishi Motors will continue selling cars in the U.S. by importing vehicles from Thailand and Japan, a move analysts say will likely boost profitability because a weakening yen is letting Japanese auto makers make vehicles more cheaply at home than in the U.S.

    The U.S. factory, however, last year produced fewer than one-third of the 222,000 vehicles it made at its peak in 2000, because of slow sales in the U.S. as well as dwindling exports to Russia. Mitsubishi Motors said Monday that it would work with the United Auto Workers union, which represents employees at the Illinois plant, to try to find a buyer.

    “The reality is that the scale of the [U.S.] plant is very small compared with manufacturing plants of other companies,” Mitsubishi Motors’ president and chief operating officer, Tetsuro Aikawa, said during a news conference Monday. “It was becoming clear that the plant didn’t have an economic rationale.”

    Mitsubishi Motors’ shift highlights the economic realities for smaller car makers, some of which are choosing to concentrate their limited financial resources on emerging markets to tap demand for new cars. That focus lets the car makers design and build models better suited to consumers in their selected markets. Mitsubishi, for example, is developing a new compact multipurpose vehicle for Indonesia, where such cars, with high capacity and low operating costs, are popular.

    Emerging markets also tend to have fewer competitors than mature ones. Although Japanese car makers, led by Toyota Motor Corp., have been operating in Southeast Asia for decades and dominate the market, U.S. and German auto makers have struggled. In Indonesia, Japanese auto makers together hold about 90% of the market share. This year, General Motors Co. shut its assembly plant in Indonesia. It is now shifting strategy to team with a Chinese joint-venture partner, SAIC Motor Corp., to manufacture and sell low-cost minivans in Southeast Asia’s most populous nation.

    In recent years, Mitsubishi Motors has been increasingly oriented toward Southeast Asia, which now accounts for roughly 20% of the auto maker’s annual global sales. Thailand, where Mitsubishi has three factories, has become an export hub for the company.

    Shares in Mitsubishi Motors rose 5.5% on Monday, as analysts said the company could reap savings by ending U.S. production. Mitsubishi currently manufactures the Outlander Sport at the U.S. plant, but it plans to shift output of that model to a plant in Japan.

    Masataka Kunugimoto, an analyst at Nomura Securities, estimates that costs to make the Outlander Sport in Japan would likely be at least ¥200,000 ($1,615) lower per vehicle than in the U.S., because of a weaker yen.

    Some analysts say that if the yen strengthens, Mitsubishi Motors might pull out of the U.S. altogether.

    “If current foreign-exchange levels continue, it can continue exporting” from Japan to the U.S., said Koji Endo, an automotive analyst at Advanced Research Japan. “But in the case that the yen strengthens again in the future, there’s a possibility that it won’t be able to export.”

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  • Hong Kong + Indonesian Fashion Meet at “Batik Crossover”

    Hong Kong + Indonesian Fashion Meet at “Batik Crossover”

    “In Style – Hong Kong”, a large-scale promotion organised by the Hong Kong Trade Development Council (HKTDC), is coming to Jakarta 14-20 September 2015. The promotion will showcase a range of Hong Kong lifestyle products as well as business services to Indonesian entrepreneurs and consumers.

    The innovative “Batik Crossover” display is a highlight of the week-long “In Style – Hong Kong” promotion, which also includes a product expo for trade buyers at the Jakarta Convention Center 17-19 September 2015, a citywide retail and gourmet promotion at venues across Jakarta for consumers and a symposium with various business networking activities as well as a high-level Gala Dinner for Indonesian businesses.

    Symbol of Collaboration

    Six collections by renowned Hong Kong designers will feature in “Batik Crossover”, with works created from the traditional Indonesian fabric. The designs by Lulu Cheung, Walter Kong with Jessica Lau, Walter Ma, Aries Sin, Harrison Wong and Cecilia Yau will be unveiled at the Fashion Hong Kong catwalk show during the Gala Dinner (by-invitation only) on 17 September, before going on public display at Grand Indonesia Shopping Town.

    “‘Batik Crossover’ is about combining a fine Indonesian craft with Hong Kong fashion design talent, symbolising the ‘In Style – Hong Kong’ theme of style, creativity, and collaboration between Indonesia and Hong Kong. We believe this initiative would be inspirational to Indonesian consumers,” said HKTDC Director of Product Promotion, Stephen Liang.

    Lulu Cheung – Indonesian Roots

    Bandung-born Hong Kong fashion designer Lulu Cheung’s love of batik dates back to her early childhood, when she wore casual clothing made from the material. Today, the renowned designer’s bond with the fabric is being rekindled through her “Batik Crossover” collection.

    “This is my first try at batik design. I will mix Hong Kong and Indonesian fashion cultures to create a contemporary look. I hope I can also give the cloth a new, impactful look,” said Ms Cheung, who, at the age of five, moved to Hong Kong with her family. “I’ve long been fascinated with batik, even keeping two batik moulds for many years as art pieces.

    “Batik is one of the core elements of Indonesian art and culture. The printing and colour represent part of the country’s culture and contemporary arts trends. In the past, the most natural dyes and colours and the most original methods were used to make the patterns. My mum told us batik colours would never fade.”

    Ms Cheung designs a wide range of womenswear, from casual to formal wear, Her clients include Hong Kong models such as as Kathy Chow, Eunice Chan, Vanessa Yeung and Janet Ma. Since her first runway show at Hong Kong Fashion Week in 1989, she extended her catwalk rounds internationally and has received multiple awards, including the International Fashion Editors’ Best Hong Kong Collection Award at Hong Kong Fashion Week in 1996, and the Certificate of Merit for Excellence in Fashion Design at Hong Kong Fashion Week in 1992 and 1994. Ms Cheung was named one of the Ten Outstanding Designers at the Hong Kong Art & Design Festival in 2006.

    Walter Kong and Jessica Lau – Fairy-tale Fantasy

    “Batik is something new to us. The fabric has a strong cultural element, but we’d like to integrate different cultures into our collection as well. The fabric is quite light, colourful and energetic. Because of its colour, it actually is quite feminine,” said Jessica Lau.

    “Our batik pieces will be based on our latest collection inspired by the Nutcracker. They are surreal, colourful and comfortable and flatter the female body. Our target customers are career women,” Walter Kong added.

    Mr Kong and Ms Lau design contemporary east-west fusion womenswear that can be easily mixed and matched for various occasions. They have dressed Hong Kong actresses including Aimee Chan and Grace Chan, both former “Miss Hong Kong” winners. Mr Kong was the 2007 Overall Winner of the HKTDC-organised Young Designers’ Contest. Ms Lau, a Central Saint Martins College of Art and Design graduate, was named “Best Emerging Fashion Designer 2009” in London by Artstalker creative group.

    Walter Ma – Attention to Detail

    Veteran designer Walter Ma will use batik in his evening gown designs. “The material is very comfortable, but it needs adapting to be used in evening gowns, so my collection will feature batik detail rather than being made totally with batik. The design concept is mainly beading and embroidery,” said Mr Ma.

    Mr Ma designs a wide range of fashion, including womenswear and menswear. He was honoured with the Merit Award at the Design Gallery show staged at the Hong Kong Fashion Week for Fall/Winter 1996. In 1997, he was awarded the “Energetic and Creativity Award” of Porsche Design and the “Artist of the Year Awards 1997 – Fashion Designer”. His clientele has featured internationally acclaimed Hong Kong actors and actresses, including Maggie Cheung, Andy Lau and Aaron Kwok.

    Aries Sin – Futuristic & Fun

    Aries Sin aims to give batik a modern twist. “I’m still learning about batik. There’s lots of potential in using this fabric in different ways. I have picked one that has a picture on it. I think it will match my collection,” said Ms Sin.

    “I will try to make it more international. I will use a contemporary way to present the material, and use the fabric in a more futuristic way, so maybe you can see something fun in the collection. And it’s going to be unisex.”

    Ms Sin’s unisex pieces have been worn by renowned Hong Kong singers including Miriam Yeung, Denise Ho and Andy Hui. In 2013, she was named by Perspective magazine as one of “40 under 40” design talents, and won the bronze award at the “Design for Asia Awards 2013” organised by the Hong Kong Design Centre.

    Harrison Wong – Casual Charm

    Harrison Wong is getting creative with the traditional material. “The batik technique of wax-resistant dyeing gives the cloth a beautiful pattern and colour, and it feels good, too. I will turn this traditional fabric with traditional pattern, into a contemporary street fashion look for men, which is a challenge. I guess the design will be interesting,” said Mr Wong.

    The menswear specialist was Overall Winner at the Hong Kong Young Designers’ Contest and captured a Special Award at the Asian Fashion Grand Prix Contest (organised by Association of Total Fashion in Japan) in 1996. With a Master’s degree with distinction from the London College of Fashion, Mr Wong has designed women’s and men’s seasonal collections for international runways in New York, Milan, Shanghai, Taipei, Sydney and Hong Kong.

    Cecilia Yau – Creative Classic

    Cecilia Yau’s inspiration came from her childhood journeys. “The theme for my collection will be ‘A Midsummer Night’s Dream’, inspired by my Southeast Asian travels as a child when, during the hot evenings, I would imagine myself being part of Shakespeare’s play, ‘A Midsummer Night’s Dream’,” said Ms Yau, a young yet experienced and well-known award-winning designer specialising in bridal wear and haute couture.

    “The batik I am going to use features deep blue, purple and golden yellow colours, with the latter resembling moonlight. Batik is versatile and I will use it in an unconventional way. My design will feature 3D cutting, representing a romantic and elegant rendition of the Shakespearean classic.”

    Graduating with a degree with distinction from ESMOD International in Paris, Ms Yau was Overall Winner of the Hong Kong Young Fashion Designers’ Contest and winner of the Hong Kong Fashions Association Creative Award in 1999. The Hong Kong Communication Art Centre recognised her as one of The Ten Outstanding Designers in 2008, and the Outstanding Greater China Designs Winner in 2013 and 2014. She was named among the “Ten Outstanding Young Persons” in 2013. Ms Yau has participated in various large-scale fashion shows including the Fukuoka Asia Fashion Festival, the Shanghai Fashion Festival and New York Fashion Week. Her celebrity clients include former Miss Hong Kong Michelle Reis, Hong Kong singer Linda Wong, and Chinese mainland actresses Huang Yi and Irene Wang.

    In addition to “Batik Crossover”, Mr Kong and Ms Lau, as well as Ms Sin and Mr Wong will also be exhibitors at the “In Style – Hong Kong” Expo (17-19 September).

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  • Caffe Bene Opens 4th Indonesian Branch in Aeon Mall in Tangerang

    Caffe Bene Opens 4th Indonesian Branch in Aeon Mall in Tangerang

    Caffe Bene, a South Korean coffee franchise, is accelerating its marketing in Southeast Asia. The company has opened its fourth branch in the Aeon Mall in Tangerang City, the company said on July 15. The city is near Jakarta, the capital of Indonesia, the country that produces the largest amount of coffee in Asia.

    Caffe Bene’s Aeon Mall café is on the first floor of the Aeon Mall shopping center, a new fixture of Tangerang City. The café has 108 seats in the area of 280 m2, 52 seats of which are in the outdoor terrace in front of the entrance of the shopping mall.

    Tangerang City is a “new city,” which attracts many local people on the weekend. The city is also a middle class residential area. The Indonesia Convention Exhibition (ICE) is nearby as well, giving the area a lot of floating population. The ICE hosts various fair events as well as the performances of overseas musicians, including Korean pop stars like Big Bang.  The city also has commercial areas around the Swiss German University and Prasetiya Mulya Business School, which may bring steady profits throughout the year.

    In addition, Caffe Bene has a new menu, having studied local customers while enhancing its competence attributed to “South Korean café culture.” The company released “K-Coffee,” which is a reinterpreted version of South Korean sweet coffee. The company also provides “frappenos” made of ground ice, as well as hot beverages.

    Moreover, considering the local food culture where people have meals and deserts at once, Caffe Bene has developed an affordable meal menu that includes pasta and pizza at around 6000 to 7000 won. The company has also developed new foods made with kimchi, which are adjusted for the local taste.

    Caffe Bene has now entered 11 overseas markets across North America, Asia, and the Middle East. The company has 40 shops in the United States, and recently opened a 7th shop in Malaysia, and 8th and 9th shops in Mongolia, developing its brand in Southeast and Central Asia.

    An official of Caffe Bene said that the company’s marketing strategy is localization, while emphasizing its own competence and South Korean café culture.  The Aeon Mall branch of Caffe Bene will brand itself as a South Korean style café providing a menu tailored for the local taste, the official said. The company will also provide events and additional services to attract customers.

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  • Qoo10 parent raises $82m

    Qoo10 parent raises $82m

    Singapore-based Giosis, the parent company of Pan-Asian eCommerce platform Qoo10, has raised US$82.1 million in new funding led by Singapore Press Holdings.

    Other investors in the mix included eBay, Saban Capital Group, UVM 2 Venture Investments LP, Brookside Capital and Oak Investment Partners.

    Qoo10 operates six online eCommerce marketplaces across Asia – in Singapore, Japan, Indonesia, Malaysia, Hong Kong and China. Qoo10 has 17.6 million registered users across the region and combined, turned over US$408 million in 2014. Of the six markets in which the company operates, Qoo10 Singapore is the best performer with 1.8 million registered users as of June 2015 and US$182 million in gross merchandise volume in 2014.

    “Through this Series A investment, Giosis will deploy the new funds to accelerate Qoo10’s technology growth and service development, while investing in additional infrastructure and talent acquisition,” the company said in a statement.

    “The new funds will also help Qoo10 strengthen its position as a leading Pan-Asian platform in its key markets Singapore, Japan and Indonesia, and accelerate its expansion in its other rapidly growing Asian markets Malaysia, Hong Kong and China.”

    As the lead investor in this Series A round, SPH will also partner with Qoo10 to explore strategic collaborations on the e-commerce platform across various content, marketplaces, retail, advertising and classifieds opportunities.

    Alan Chan, SPH CEO, said Qoo10 is the number one ranked eCommerce website in Singapore and its parent company Giosis has established itself as a market leader in the region’s e-commerce space.

    “The investment in Qoo10 will enhance our portfolio of digital assets and open up opportunities for future marketing collaborations. With the region’s eCommerce market poised to grow, this investment puts us in a good position to tap on the industry’s growth and be an active player in this space.”

    A joint venture between Gmarket Inc founder Ku Young Bae and eBay, Qoo10 was founded in 2010 with US$20 million seed capital, after Gmarket was acquired by eBay in 2009 for US$1.2 billion.

    Ku Young Bae, CEO of Qoo10, said: “From the beginning Qoo10 has strived to be a hyperlocal eCommerce platform which enables local merchants, big and small, to sell their products to a local and regional customer base across Asia.  Today, 90 per cent of our staff and merchants are local, in order to provide consumers with a seamless shopping experience in a specialised marketplace. With this new funding, we aim to further strengthen our position as the leading Pan-Asian marketplace.”

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  • Smoothie King eyes Asia

    Smoothie King eyes Asia

    Fresh from sealing a deal to enter the UAE, US chain Smoothie King is now seeking partners to enter seven Asian markets, along with Australia.

    With more than 700 locations worldwide and plans to top 1000 locations globally by the end of 2017, Smoothie King has signed up Al Ghurair Retail to open across the emirates, starting with multiple locations in Dubai.

    Smoothie King is currently located in Korea, Grand Cayman and Singapore, and according to Dan Hannah, VP of international business development, the company is now eyeing development in Japan, China, India, Indonesia, the Philippines, Taiwan, Australia and Brazil.

    Smoothie King is providing guests around the world with nutritional solutions that live up to the brand’s founding vision to create “Smoothies With a Purpose.”

    Smoothie King differentiates itself in the crowded juice and smoothie category as an “originator and innovator”, evolving to meet customer’s health needs since 1973. The mission since the company’s inception carries through to today: to inspire people to live a healthy and active lifestyle.

    New Orleans-based Smoothie King offers a wide variety of smoothies made with the highest quality ingredients, created to meet all nutritional goals including weight loss, weight gain and increased energy.

    “By working with dedicated and passionate partners like AG Retail, we are able to continue to build our brand and expand our presence worldwide, while preserving brand integrity,” said Smoothie King CEO Wan Kim.

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  • Retailers Brace for Gloomy Ramadan Amid Economic Slowdown

    Retailers Brace for Gloomy Ramadan Amid Economic Slowdown

    Indonesian retailers are predicting sales to drop by 36 percent year-on-year during the Muslim holy month of Ramadan and Idul Fitri, the latest sign of the country’s weakening economy.

    Sales are expected to reach Rp 15 trillion ($1.12 billion) during the fasting period, which runs from June 18 through July 17,  compared to Rp 25 trillion in the same period last year, according to estimates from the Indonesia Retailers Association (Aprindo).

    Members of the association range from convenience store chain operators such as Sumber Alfaria Trijaya to hyper market operators like Matahari Putra Prima.

    Aprindo chairman Roy N. Mandey said consumers’ purchasing power has been under pressure this year due to rising inflation stemming from fluctuating oil prices, the weakening rupiah and slow government spending.

    President Joko Widodo shifted government subsidies for fuel prices this year to back up his $21 billion infrastructure projects. However, only 8 percent of the funds were disbursed in the first six months 0f 2014 due to red tape, dragging further on the country’s economy, which is already struggling against low commodity prices and slowing investment.

    Based on current conditions, Aprindo has revised its 2015 sales target to Rp 152 trillion from its initial total of Rp 184 trillion — a 10 percent contraction from last year’s sales of Rp 168 trillion.

    “People are not as enthusiastic [as before]. They are refraining from buying anything now,” Roy said.

    A recent consumer confidence survey from Bank Indonesia, the country’s central bank, showed that consumers have become less optimistic about their income and job availability, holding back on buying durable goods like electronics, motor vehicles and home appliances.

    Still, Matahari Putra Prima, one of the largest retailers in Indonesia and a Jakarta Globe affiliate through the Lippo Group, remains confident it will see an 11 percent increase in sales during Ramadan to Rp 3 trillion from Rp 2.7 trillion last year, banking on its expansion in the eastern part of the country.

    The company now operates 111 stores under the brands Hypermart, Foodmart and Boston Health & Beauty.

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  • Can Lippo Malls Indonesia Retail Trust Turn Itself Around?

    Can Lippo Malls Indonesia Retail Trust Turn Itself Around?

    With China’s stock market turmoil and Greece’s debt issues, it’s easy to miss out the woes that are befalling Singapore’s southern neighbour, Indonesia.

    The rupiah, Indonesia’s currency, has crashed by around 50% against the Singapore dollar since the start of 2010. In fact, the rupiah has tumbled in recent times to levels that were last seen during the Asian Financial Crisis of the late 1990s, some 17 years ago.

    Indonesia’s currency issues have heaped pressure on Indonesia-based but Singapore-listed companies and investment trusts.

    One good example is Indonesian retail malls owner Lippo Malls Indonesia Retail Trust the real estate investment trust has seen its units fall by 30% in price since the start of 2010 even as the broader market, a tracker for the Straits Times Index has climbed by 12%.

    Can things ever turn around for the REIT? Here are three reasons why it may.

    Hedging in place

    Lippo Malls Indonesia Retail Trust is well aware of the risk which can come with a falling rupiah and as a result, the REIT mentioned in its 2014 annual report that it “has entered into foreign exchange hedges to hedge its estimated quarterly cash flows in Indonesian Rupiah until the end of 2016.”

    These hedges can help to cushion any negative impacts from adverse currency swings which may affect the REIT’s bottom-line and distributions.

    Growth by acquisitions

    My colleague Stanley Lim had noted only two weeks ago that Lippo Malls Indonesia Retail Trust has made two new acquisitions of the Indonesian malls Lippo Plaza Batu and Palembang Icon and the purchases are accretive to the REIT’s distributions on a per unit basis.

    The REIT may also have a healthy pipeline of assets to acquire given the reach of its sponsor, PT Lippo Karawaci Tbk, Indonesia’s largest listed company by total assets.

    Undemanding valuation and juicy yield

    At its current unit price of S$0.35, Lippo Malls Indonesia Retail Trust has a very high trailing-12-months dividend yield of 8.2%.

    In the first quarter of 2015, the REIT’s distributions per unit (DPU) for the quarter had jumped by 16% year over year from 0.68 Singapore cents to 0.79 cents. Based on the REIT’s reading of its own micro-economics, it’d appear that brighter days are ahead. Here’re the REIT’s comments from its first quarter earnings release:

    “As the shopping centre moratorium continues, the near term retail space supply in Jakarta will be limited. This will create a favourable market condition for existing shopping mall owners as retail space in Jakarta will be keenly sought after in the next few years.

    The outlook for quality retail spaces looks promising in the next 12 months as both local and foreign retail players continue to remain active. Higher disposable income, lower inflation, coupled with an emerging trend of lifestyle shopping malls are expected to drive the demand for retail space.”

    While currency woes may still plague the REIT, it’s worth noting, as I mentioned earlier, that currency hedges have already been put in place till the end of 2016.

    In the meantime, Lippo Malls Indonesia Retail Trust is also selling for just 0.8 times its latest book value. These low valuations could potentially give some downside protection for investors.

    Foolish Bottomline

    While there may be things to like about Lippo Malls Indonesia Retail Trust, it’s important to note that its history with its DPU has been less than impressive.

    The REIT’s first annual distribution was in 2008 and it had doled out a DPU of 4.96 Singapore cents. But in 2014, its annual DPU was just 2.76 cents, a fall of some 44%.

    This undesirable track record is a source of risk, in the sense that while a weak rupiah may have played a part in the REIT’s shrinking distributions (this is something not within the REIT’s control), it could also be a sign that the REIT may not be the best operators of retail malls around.

    Investors would have to weigh the risks and rewards with Lippo Malls Indonesia Retail Trust before any investing decision can be reached.

  • Prada Jakarta opens doors

    Prada Jakarta opens doors

    Prada Jakarta has opened its doors, the luxury Italian fashion brand’s first store in Indonesia.

    The new 420 sqm single level store is located inside the upmarket Pacific Place shopping mall.

    The retail space, designed by architect Roberto Baciocchi, houses the women’s and men’s ready-to-wear, leather goods, accessories and footwear collections.

    The external facade is clad in black Marquinia marble, while slim polished steel profiles highlight the light boxes.

    The store has a corner location inside the mall, with slim strips of black Marquinia marble framing the entrance, display windows and large floor-to-ceiling windows that open up on the interior.

    The space is designed as a succession of rooms, each featuring a different atmosphere.

    The women’s leather goods area is defined by the signature black-and- white marble chequered flooring – a legacy of Prada’s identity worldwide – and green fabric-clad walls with alcoves housing displayed product, an original reinterpretation of Prada’s iconic display niches.

    The space housing the women’s accessories and small leather goods collections is characterised by black marble-clad walls and display counters with coloured saffiano leather detailing.

    The women’s footwear collection is showcased in an area defined by green fabric-clad walls with cut-in display niches. Beige carpeting and green velvet sofas create an elegant atmosphere.

    Green fabric-clad walls also characterise the area dedicated to the women’s ready-to-wear collection, where transparent perspex cases exalt the product display. Crystal tables and green velvet sofas complete the furnishing.

    The space devoted to men comprises an area dedicated to the leather goods and accessories collections and another room where the footwear and ready-to-wear collections are displayed. The area features masculine materials and finishes: ebony floorboards and walls, dark brown carpeting and cotto-coloured leather sofas. Polished steel display cases and counters with drawers covered in coloured saffiano leather complete the setting.

  • Indonesia eyes return to OPEC as oil crisis looms

    Indonesia eyes return to OPEC as oil crisis looms

    Indonesia is seeking to rejoin OPEC to get access to cheaper oil supplies as demand soars and domestic production falls, but critics say the move is an unwelcome distraction from efforts to overhaul the country’s troubled energy sector.

    Resource-rich Indonesia, Southeast Asia’s largest economy, was part of the Organization of the Petroleum Exporting Countries (OPEC) for almost 50 years until suspending its membership in 2009 after becoming a net oil importer.

    The switch to becoming an importer came as domestic demand soared and output dropped due to a lack of investment from foreign companies, put off by complex regulations, corruption and growing economic nationalism.

    With oil imports surging as the economy booms and the energy sector still in urgent need of reform, the government is looking for cheaper supplies and has taken the unusual step for an oil importer of requesting to rejoin the 12-member exporting cartel.

    “It is only natural that we should build relations with exporters,” Energy Minister Sudirman Said said before heading to an OPEC meeting at the organisation’s headquarters in Vienna last month, where he was seeking to have the suspension lifted.

    After the meeting, the energy ministry said that some OPEC members had backed Indonesia rejoining.

    OPEC has refused to comment but analysts said the group, which has members from the Middle East, Latin America and Africa, is likely to welcome an applicant from Asia.

    “We understand the application is viewed favourably because Indonesia would again provide OPEC with a member nation in Asia and thus broaden the geopolitical base of the group,” Ann-Louise Hittle, vice president of Macro Oils research at Wood Mackenzie, told AFP.

    The OPEC statute states that “any country with a substantial net export of crude petroleum” can become a full member. But it also says associate membership is possible for countries who do no qualify as full members, the course Indonesia is likely to pursue, analysts believe.

    Observers also say Ecuador has set a precedent for Indonesia, by suspending its membership in 1992 and rejoining in 2007.

    But some observers questioned the wisdom of the move, suggesting that trying to rejoin OPEC and source cheaper supplies from outside Indonesia could slow the momentum of the government’s attempts to reform the corruption-tainted, domestic oil and gas sector.

    When reform-minded President Joko Widodo took power last year, he set up a team to look at overhauling the sector, which critics have said is plagued by a shadowy “oil mafia” who skim off huge, illicit profits.

    Some progress has been made. In May, state-owned energy company Pertamina said it would disband its oil-trading arm Petral, which supplies one third of the country’s daily oil needs but has been dogged for years by concerns about a lack of transparency.

    But the reform team, which undertook a six-month assignment to assess the sector, made other recommendations, such as shifting to a newer type of cleaner burning, more efficient petrol, and there are fears such efforts could be stymied by the new focus on OPEC.

    “What is the use of Indonesia approaching OPEC, even if only as an observer?” wrote Faisal Basri, the former head of the government’s reform team, on his blog, and added the country appeared to be “just giving up”.

    Reform is seen as urgent. During its heyday in the 1990s Indonesia produced close to 1.6 million barrels of oil per day, which easily covered demand and left plenty more for export.

    But by last year, Indonesia was importing 689,000 barrels a day to cover its domestic needs, the bulk of which was for transport, Benjamin Tang, a senior analyst for Wood Mackenzie’s Asia Pacific Refining research service, told AFP.

    Some have called for Indonesia to wean itself off oil to help ease the looming supply crisis — but there seems little chance of that, with many new cars and motorbikes hitting the roads every day as the middle class rapidly expands.

    To make matters worse, decades of generous government subsidies have made Indonesians used to cheap fuel.

    The payouts were slashed almost entirely this year, as low global oil prices naturally helped to keep pump prices down, but there are already suspicions the government is quietly reintroducing small subsidies as oil prices creep back up.

    While some fear the move towards OPEC could hamper reforms, others believe it simply makes no sense for a net oil importer.

    “If you want to join a car club,” said Komaidi Notonegoro, head of energy research group ReforMiner Institute, “You have to have a car.”

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  • Indonesia retail sales continue to soar

    Indonesia retail sales continue to soar

    Indonesia retail sales soared 19.8 per cent May on May, according to bank of Indonesia data.

    While that is slower than the revised rate of 23.1 per cent in April (the bank had earlier estimated 22.4 per cent), it remains a figure developed economies can but dream about.

    Sales rose a healthy 19.7 per cent in March.

    The figure is based on data collected from 650 retailers in 10 major cities who are also quizzed on sentiment in the months ahead.

    Despite the healthy rates of April and May retailers expressed sales growth will slow in June and soften further in August after the end of the Ramadan fasting month, largely over July.

    They also expect inclement weather to disrupt distribution of stock during the next six months.

    But consider this: Last month, the retailers surveyed said they expected sales growth to slow in May, weakened by the vehicle fuel, spare parts and accessories categories. They said they expect inflationary pressure in July to soften due to retail discount programs linked to Ramadan.