Electronic Retailer Courts Asia Breaks Ground for Its Megastore in Bekasi

October 24, 2013 Leave a comment

Electronic Retailer Courts Asia Breaks Ground for Its Megastore in Bekasi

By Johan Mulyadi on 11:00 pm October 23, 2013.
Bekasi. Singapore-based Courts Asia, an electronics retailer, is hoping to tap the Indonesian market with its first store in Bekasi, West Java, on the outskirts of Jakarta. The ground-breaking ceremony at the site took place on Wednesday. The company plans to spend $20 million on the Bekasi megastore, expected to be operational by the second half of 2014. The store, to be located in Kota Harapan Indah, Bekasi, will occupy 13,000 square meters. It will stock a wide range of products from computer products and electronics, to home furnishings. “Big-box stores have lower rental cost per square meter and this should compensate for the lower shopping traffic as compared to shopping malls. A big-box store can also earn rent from food and beverage vendors located on the premises,” Courts Asia chief executive Terence Donald O’Connor said during the ceremony. Besides the Bekasi store, the company also plans to open another in Bumi Serpong Damai in Tangerang, Banten. It is expected to open some time in 2015. Courts Asia plans to open an additional 10 stores in Indonesia in the next five years, O’Connor said. The company raised S$44 million ($36 million) from an initial public offering early this month. It will use the bulk of the proceeds to finance its Indonesian expansion, which according to its website, will amount to about S$40 million. “Indonesia’s growth is driven by a burgeoning consumer market that is still under-penetrated. It is highly attractive. We plan to launch stores in urban areas to capture our target customers — the rising middle-class,” O’Connor said.Indonesia’s $900 billion economy is forecast to expand by as much 5.9 percent this year compared to 6.23 percent last year. “The recent rise in Indonesian interest rates will not deter Courts from its expansion plans. Indonesians are consumptive in nature with high purchasing power,” Courts Indonesia country chief executive Roy Santoso said. “Rupiah fluctuations pose little implications to us because they are only short-term,” he added. The government has recently taken several measures to contain rising inflation, including raising borrowing costs. Bank Indonesia has raised its benchmark interest rate by 1.5 percentage points since mid-June to 7.25 percent. Monetary policies were tightened in order to defend a weakening rupiah, which traded at 11,258 against the US dollar on Wednesday. T he local currency has depreciated by 16 percent to the greenback so far this year. The Courts group has a history spanning over 35 years in Singapore and 25 years in Malaysia. It operates a chain of 14 stores in Singapore and 62 in Malaysia. With the company’s plan to open a further 10 stores in Indonesia, and at a presumed cost of $20 million per store, that suggests it may have to invest more than $200 million in Indonesia. However, O’Connor declined to confirm the number.

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