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Illustration of retail business (CNN Indonesia / Hesti Rika)
Growing E-commerce, Retail Stores Face Heavy Challenges
Jakarta, Indonesia - According to Indonesian Retail Entrepreneurs Association (Aprindo), the entrepreneurs stated that there is a challenge that prevents businesses in the retail industry from expanding or developing, which is the development of the online retail business (e-commerce) that is chosen by the customers nowadays.It is reported that in terms of financial performance, despite losing money, e-commerce can still develop the business. In fact, e-commerce received a capital injection every month and every year. This is different from conventional retailers who are required to maintain financial performance every day and every month with some targets.
Not only the capital injection and easy purchase, e-commerce can provide massive discounts because it is not related to an agreement with the supplier. Meanwhile, conventional retailers must have careful calculations in giving discounts during some periods.
On the other hand, conventional retailers are currently facing the challenges of the quality of Human Resources (HR) which can be considered low as well. Therefore, companies must pay for training programs for their employees.
Stack of unsold supplies also create its own problems for conventional retailers. When the supplies have not sold out, they have to add the supplies because they have not been able to pay off the previous payment. As a result, supplies accumulate and adding more spending to the company.
Chief Executive Officer of PT Lotte Mart Indonesia Joseph Buntaran said that e-commerce has a different character than conventional retail, where the characteristics encourage e-commerce to develop its business faster than conventional retail.
He stated that his company, Lotte Mart had to pay the cost of developing Lotte Mart's human resources that has increased eightfold since 2017-2018. However, this was taken by the company to encourage the development of the business itself and to produce more quality and professional employees.
Source: https://www.cnnindonesia.com/ekonomi/20190729190758-92-416537/pelaku-akui-iklim-usaha-ritel-hancur
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