معامله گران مواد غذایی سنتی در کشورهای در حال توسعه و رقابت از سوی سوپر مارکت ها : مدارک و شواهد از اندونزی

Indonesia’s urban centers recently underwent an explosion of supermarkets. With cheaper, higher quality commodities and better services, supermarkets have the potential to drive traders in traditional markets out of business. In this paper, we evaluate whether this is indeed the case. We find that traditional traders experienced declines in their business. However, both qualitative and quantitative findings indicate that the main cause of decline is not supermarkets. Instead, traditional markets are plagued with internal problems and face increasingly bitter competition from street vendors. Therefore, the policy recommendations include strengthening traditional traders and seriously tackling the problem of street vendors.

The competition between modern and traditional retailers has been taking place in developed countries for many years. In the United States, for example, many studies find that Wal-Mart adversely affects existing retailers (Artz and Stone, 2006) and the local labor market (Basker, 2005), while consumers generally benefit through the lower prices, arrival of new brands, and differentiated products that result from the competition (Hausman and Leibtag, 2007). Towards the last decade of the previous millennium, the battleground has expanded to developing countries, where deregulation in the retail sector aimed at increasing foreign direct investment has resulted in the proliferation of supermarket chains (Reardon and Hopkins, 2006 and Minten, 2008). Reardon et al. (2003) find that as of 2003, supermarket’s share of the retail food sector in several emerging economies, such as Thailand, Mexico, and Poland, has reached 50%. In Brazil and Argentina, where the proliferation began earlier, the share was around 60%. Traill (2006) uses various assumptions and predicts that supermarket’s share of the retail food market will reach 61% in Argentina, Mexico, and Poland; 67% in Hungary; and 76% in Brazil by 2015. The onset of supermarkets in developing countries, bringing with it higher quality products at lower prices, would theoretically be beneficial to consumers, especially those who are poor. As an example, D’Haese and Van Huylenbroeck (2005) provide a case study of the effect of supermarkets on poor households in rural South Africa. At the same time, however, the increased competition may force traditional retailers, many of whom are also vulnerable to poverty, out of business. According to Reardon and Hopkins (2006) and Minten (2008), the war between supermarkets and traditional retailers in developing countries takes place on several fronts, such as price, convenience, quality of the products, and safety. Similar to the findings from the United States, most studies in developing countries find that the effect of supermarkets on traditional retailers is mainly negative, although the effect differs in magnitude on different types of retailers. Reardon and Berdegué (2002) summarize studies that look at the effect of supermarkets on traditional food retailers. They find that small shops and ‘mom and pop’ stores are hit the hardest, while speciality shops and street fairs tend to hold out much longer. When differentiated by products sold, those selling dairy products or processed food tend to go out of business the earliest, with fresh produce shops and wet markets following afterwards. After several years of competition, the traditional retailers that are usually still in business are those selling niche products. An exception to this is in Brazil, where it appears that traditional traders are able to coexist with modern retailers by depending on traditional food preparation habits and ensuring fresher products (Zinkhan et al., 1999 and Farina et al., 2005). Other than describing the number of traditional retailers that have closed down since the onset of supermarkets or comparing their growth rates, however, there is yet to be any study that conduct an impact evaluation of the effect of supermarkets on traditional retailers in developing countries. Furthermore, studies that use micro-level data of traditional retailers are still very rare, even in developed countries. In a case study in Portugal, Farhangmehr, Marques, and Silva (2001) measure traditional retailers’ perception of supermarkets and unsurprisingly find a negative perception. In this article, we investigate the business practices of traditional retailers in Indonesia and measure whether supermarkets adversely affect the traditional retailers. We use the data from a survey of traditional retailers that was precisely designed for this purpose. This article focuses on traditional retailers inside traditional markets, as opposed to local shops, for two reasons.1 Firstly, the majority of traditional retailers are located in these markets. Secondly, the commodities sold by these retailers are fresh fruit and vegetables, meat, and basic necessities. These commodities also make up a large part of the supermarkets’ product line (Krishnamurti and Fauzia, 2004). Hence, these traders are the supermarkets’ main competitors. We abstract away from traditional wholesalers in this study. This would not significantly bias our results given that traditional wholesalers are not located in the same area as traditional retailers or most of the supermarkets. The rest of this article is organized as follows. The next section describes food retail trade in Indonesia. “Survey design and research methodology” lays out the survey design and research methodology. “Business practices of supermarkets” provides an overview of the business practices of supermarkets. “Business practices of traditional traders” discusses the business practices of traditional traders. “Business performance of traditional traders 2003–2006” measures the traditional traders’ performance during the period that we study. “The effect of supermarkets on traditional traders” explains the econometric estimation strategy and the results. “Possible bias” examines possible biases in this study. “Conclusion and policy recommendation” concludes and provides policy recommendation. Food retail trade in Indonesia Supermarkets have been around since the 1970s in Indonesia, although they were only concentrated in large urban centers. Foreign supermarkets began entering the market in late 1990s as foreign direct investment in the retail sector was opened in 1998. While local supermarket chains had been of medium size, the foreign supermarket chains, such as France’s Carrefour and Malaysia’s Giant, opened hypermarkets.2 From 1998 to 2003, hypermarkets grew by 27% a year, from eight to 49 stores in the country. While it is difficult to ascertain the total number of supermarkets and hypermarkets in the country, the top seven retailers operated around 284 supermarkets and hypermarkets in 2004 (PricewaterhouseCoopers, 2006). The increased competition has resulted in supermarkets reaching smaller cities and waging price wars in their effort to win consumers. Hence, while CPIS (1994) finds that Indonesian supermarkets catered only to the upper class in the 1980s and early 1990s, their mushrooming in smaller cities and predatory pricing practices means that consumers from the lower classes now have an easy access to supermarkets. World Bank (2007) states that the modern market made up only 11% of the total market share for food in Indonesia in 1999. By 2004, the share had almost tripled. In terms of sales, the study finds that supermarket sales grow by an average of 15% while traditional retail sales decline by 2% per year. This pattern is similar to other developing countries, as stated by Reardon et al. (2003). In contrast to supermarkets, city governments own most traditional markets and manage them under the Office of Market Management (OMM). This office either entirely manages the markets on its own or in cooperation with private companies. The latter involves giving the private companies a permit to build and/or operate a traditional market under a build, operate, and transfer scheme, with the private companies making a set payment to the office each year. There is no information on the number of traditional markets in Indonesia.

Supermarkets have been around in major urban centers in Indonesia for the last three decades. At the onset of the liberalization of the retail sector in 1998, however, foreign supermarket operators began entering the country, sparking a fierce competition with local operators. Some corners claim that traditional markets are the real victims of the intense competition, as they lose their customers due to the cheaper and higher quality products and the more comfortable shopping environment that supermarkets provide. Therefore, there are calls to limit the construction of supermarkets, especially in locations near traditional markets. This study investigates the impact of supermarkets on traditional market traders in Indonesia’s urban centers. Five traditional markets were chosen as the treatment group and two traditional markets were chosen as the control group. The sampling frame ensures that these markets are representative of traditional markets in urban areas in Indonesia. Furthermore, it also ensures that the treatment and control groups have similar characteristics other than their proximity to supermarkets. Two treatment markets and one control market are located in Depok, an urban center near Jakarta, while the rest are located in the Greater Bandung area, the capital of West Java Province. Randomly selected traders in these markets were interviewed using a questionnaire. These traders are representative of the traditional markets. On average, traders in both treatment and control markets have experienced a decline in their business over the past 3 years. The quantitative impact analysis finds no statistically significant impact of supermarket on the profit and revenue of traditional traders. These results are further confirmed by the qualitative analysis findings that supermarkets are not the main cause of the decline among traditional markets. The traders, market managers, and traders’ representatives all state that the main steps which should be undertaken to ensure their survival are the improvement of traditional market infrastructure, organization of the street vendors, and the implementation of better market management practices. The traders explicitly state their confidence that supermarkets would not drive them out of business if the above conditions were met. While there is indeed evidence that traders have gone out of business during the last 3 years, the reasons for this are more complex than the entry of supermarkets alone. Most business closures are associated with internal market and personal problems. In addition, traders who mainly sell to non-households and have maintained a good relationship with their customers over a long period of time are more likely to stay in business. Therefore, policy recommendations to ensure a thriving traditional market environment evolve around increasing the competitiveness of the traditional market. This involves several steps. First, the local government should improve the infrastructure in the traditional markets. This includes ensuring proper hygiene, sufficient cleanliness, ample lighting, and an overall comfortable environment. This also entails appointing qualified people as market managers and giving them enough authority to make decisions. Furthermore, the market manager should consistently coordinate with traders in order to achieve better market management. Secondly, local governments should organize the street vendors, either by providing them with kiosks inside the traditional markets or by enforcing the law banning them from opening stalls around a traditional market. It is imperative that these vendors are kept from blocking the market entrance. The third recommendation pertains to the traders themselves. Most traders have no option but to pay their suppliers with cash and use their own capital for the business. On one hand, this poses a constraint for business expansion. On the other hand, it means that traders have to undertake all the risks associated with doing business. Given that the traders do not usually insure their businesses, they are vulnerable to even a small shock. It is therefore worth investigating the types of insurance suitable for traders and assisting them should they need additional capital to finance their expansion.