Aprindo Chairman Roy N. Mandey, right, with Danny Kojongian, Matahari Putra Prima's corporate secretary, center, and Irene Koloway, a senior manager at The Walt Disney Indonesia, pose for a photograph with Disney-branded products at a Hypermat store in Tangerang, Banten. (B1 Photo/Emral Firdiansyah)

Retail Group Matahari Putra Prima Teams Up With Disney


NOVEMBER 18, 2019

Jakarta. Matahari Putra Prima, one of Indonesia's largest retailers, has collaborated with The Walt Disney Company Indonesia, the local unit of the American media giant, in a new marketing campaign that will be rolled out at all the retailer's outlets across Indonesia.

This is the latest push from the company to return to profitability after enduring massive hits from competitions and slowing demand in the past few years. 

Under the agreement, Matahari Putra Prima, which operates Hypermart, Primo, Foodmart and Hyfresh, would pay royalties to Disney for the use of Disney cartoon characters at all its outlets. 

For now, fresh produce such as fruits and vegetables sold in Hypermart will come in packaging bearing Disney characters. Clothing, toys and stationeries branded with Disney and Pixar characters will also be available at all of the company's outlets.  

"The contract is for three years. But in the long run we're looking to extend it beyond three years," Danny Konjoningan, Matahari's corporate secretary, said last week. 

Danny said the partnership with Disney was part of the company's efforts to maintain its loyal customers and attract new ones. The company is targeting an increase in the number of visits to its stores, or customer traffic, of around 20 percent per year. 

"Collaborating with Disney also gives us valuable experience on how to meet international quality standards as a modern retailer," Danny said. 

"Disney set several requirements that are quite strict... from procurement, packaging concept to retail operation. We're quite proud because we became the first hypermart to offer a shopping concept like this," he said. 

Amanda Dhalluin, the executive director of retail product commercialization at The Walt Disney Company Indonesia, said the collaboration offers Disney fans a range of relevant products and a unique experience when they do their grocery shopping.

"When we do collaborations in Indonesia, we make adjustments to meet local consumers' preferences," Amanda said.

Return to Profitability

Danny said Matahari will keep its focus on managing expansion costs. Next year, the company plans to allocate a capital expenditure of Rp 140-150 billion ($10-11 million). 

The company is opting to maximize its existing outlets and to become more selective in product selection. 

"We already have 105 Hypermart outlets and 27 to 28 Foodmart outlets throughout Indonesia. We just need to improve their quality," Danny said. 

He said the company's recent efforts to improve efficiency and return to profitability have finally come to fruition. 

Matahari's earnings before interest, tax, depreciation and amortization (EBITDA) has returned to the black at Rp 71 billion in January-September this year compared to a loss in the same period last year. 

Net sales went up to Rp 6.64 trillion, and the company's gross profit margin increased 451 basis points year-on-year to 17.7 percent. Gross profit increased by 7.6 percent to Rp 1.18 trillion from Rp 1.09 trillion in the same period last year. 

Roy Mandey, the chairman of the Indonesian Retailers' Association (Aprindo), said Matahari's collaboration with Disney showed the kind of innovation modern retailers need to adopt to keep up with local consumers' changing shopping style. 

"The retail industry is not expanding at a slower rate than other industries. Whenever household consumption grows, the retailers will grow as well," Roy said.

He said the local retail industry is still expected to grow by 9 percent this year, with the Christmas and New Year holidays providing a much-needed boost at the end of the year.