INNOVATE | Interview “Retail is detail.”

Alfamart is taking convenience a step further, with a revolutionary digital presence offering service and opportunities to even the most remote locations.INSPIRING THE BUSINESS WORLD INSPIRING THE BUSINESS WORLD

INSPIRINGINSPIRING THE BUSINESS THE WORLD BUSINESS WORLD WORDS WENDY KAY • IMAGES EMILY FRANCES The WORLD As featured in that BEZOS The CEO Magazine The extraordinary man behind one of the world's built biggest brands For more info visit WHY KPIs ARE KILLING YOUR BUSINESS theceomagazine.com SIX REASONS EVERY LEADER NEEDS TO REST

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ou can’t go far in without spotting the distinctive red, yellow and blue logo of an Alfamart . There are 12,000-plus stores scattered across the country, with hundreds more emerging in the Philippines, providing a familiar, almost comforting, sight to more than three million customers a day in easily accessible neighbourhood locations. LastY year, Alfamart broadened its appeal online with the launch of Alfacart.com, an ecommerce platform the company boasts has the most online to offline (O2O) transactions in Indonesia. Whereas online shopping was previously restricted to residents of large cities, Alfacart uses its bricks-and-mortar stores as designated pick-up or return points for online purchases. This eliminates the need to deliver to remote and often impassable locations, increases foot traffic through stores, and enables cash on delivery, the preferred method of payment in Indonesia. The range of goods offered has also revolutionised Alfamart’s online presence, with shoppers able to purchase everything from fashion to electronics, lifestyle, kitchenware and gadgets to daily necessities. PT Sumber Alfaria Trijaya Tbk is the business that operates the grocery store chain. It was established in in 1989 by Indonesian entrepreneur Djoko Susanto as a trading and distribution company, and entered the retail sector in 1999, branding its stores Alfa Minimart before converting to Alfamart in 2002. It employs more than 112,000 people, making it one of Indonesia’s largest employers, and enjoys a strong reputation for aiding the community in education, sport and environmental concerns. »

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The CEO Magazine asked President How did the business begin, and Director Anggara Hans Prawira to where was the first store opened? explain more about the company and The first Alfamart store was opened on its continuing evolution. 18 October 1999 in Karawaci, , about 40 kilometres from Central Jakarta. The CEO Magazine: How long Alfamart was founded by Mr Djoko have you been with Alfamart? Susanto, who started his entrepreneurial in greater Manila, and we Hans: I was a consultant working in life as a traditional kiosk trader in Jakarta. hope to be doubling the the business consulting and corporate He was operating a wet market, selling number of stores every finance division of Prasetio Utomo fresh meat and produce, and was partnered year from 2017. & Co, Arthur Andersen Indonesia, with Sampoerna, one of Indonesia’s largest from 1994 to 2001. I joined Alfamart tobacco companies, and currently owned What is the key to in April 2001 as the CFO when we by Phillip Morris. In 2006, Sampoerna having a successful store? had only 43 stores. divested its shares and Mr Djoko took While location is the key As of 31 December last year, there are over as the majority shareholder. and obviously the most now 12,366 Alfamart stores throughout successful factor, I truly Indonesia, most of them located in What about overseas? Where has believe personal service to residential, high-traffic and public areas. Alfamart expanded its footprint? customers also significantly Through Alfamart’s subsidiaries, however, We are currently operating and developing contributes to success. the total number of stores operated by Alfamart via a joint venture with With the community the company reaches 13,475 under several the largest retailer in the Philippines, in mind, our cashiers are banners: Alfamart, Alfaexpress, Alfamidi, SM Investments Corporation. urged to know customers Dandan, and – under a licence By the end of last year, the joint by name, and even become agreement with Lawson Japan. venture was operating 210 Alfamarts a friend to the customer. This encourages customer loyalty. But most of all, we while shopping, but also crave an offer happiness in our stores enjoyable and engaging shopping to go along with the Alfamart experience. We have developed and shopping experience. implemented some digital initiatives to communicate with these shoppers via social media, and also use AR/VR technology and digital media in our stores “We hope to be doubling to give customers greater interactivity and engagement with products. Furthermore, the number of stores we have the Alfagift app, which allows every year from 2017.” users to be updated on our latest promotions and special deals. Half page advert Of course, the beauty of all this LIMITED PT PROCTOR digital engagement is that it gives EDITION & GAMBLE us measurability to track not only The majority of Alfamart customers participation, but also the conversion are aged below 30. What attracts rate of initiatives by linking it with our these younger people to your stores, POS. However, our main customers and how do you market to them? are young mothers aged from about Around 53 per cent of Indonesia’s 25 to 35 years. They expect to shop for population is aged under 30, and these groceries at a convenient location and at millennials definitely represent the face a reasonable price. They need more time of Alfamart customers. They have already to take care of their families and don’t changed market behaviour and successfully want to waste time buying groceries. It created a new trend. We understand that also makes more economic sense for them they are not just expecting convenience because the stores are close to their »

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We keep learning to understand them better, along with their shopping behaviour, which is continuously changing.

Can people pay their bills in store? Customers can pay many of their bills at Alfamart: from utilities to health funds; TV and phones; financial instalments for their cars or motorcycles; or their land and property tax. We also provide remittance homes, so they don’t need to pay services, ticketing for transport, shows for transport. We’re careful to provide and theme parks, as well as ecommerce our customers with selected products payment points. This is getting more tailored to their needs, rather than and more significant for our business, carrying large numbers of items in particularly when you consider that the each category. Indonesian payment system is still pretty We’re not interested in trying much dominated by cash. to change our shoppers’ habits; we’re more interested in trying Alfacart has practically revolutionised to understand their habits. your ecommerce presence. What was the thinking behind it? In anticipation of e-shopping for the “We’re not interested in trying future, we launched our new digital channel, Alfacart, in May last year to to change our shoppers’ habits; replace Alfaonline. Currently, the business Full page advert model of Alfacart is an e-marketplace with we’re more interested in trying COCA-COLA groceries as the predominant and anchor AMATIL to understand their habits.” category. It functions as an extension of the existing offline retail business to strengthen Alfamart’s presence as well as to tap into a new segment of customers. Our aim is to leverage store networks How do you go about monitoring to provide an open platform for an your customers’ behaviour? offline-to-online model. We believe that We are continuously monitoring customer with a store network of more than 13,000 behaviour through focus groups and throughout the country, supported by data analytics from external research an extensive supply chain of capabilities, institutions, as well as our internal CRM we will be able to provide solutions for data analytics. We have developed and deliveries that have previously been continued to build analytics capability impossible or difficult. to gain more insights from POS data. Currently, we have more than 8.7 You’ve also introduced Alfamind, million members through our member Indonesia’s first 3D virtual retail store card, Kartu Aku Ponta. network. How does that work? Next on the agenda is customisation, Alfamind, supported by MindStores’ how we can deliver specific offers to advanced AR/VR technology, transports specific groups of customers based on shoppers into a virtual store environment, their shopping behaviour. Before, the allowing them to buy or sell. With just offer was basically standard, one size fits a small investment, users can become an all. Now, and in the future, we aim for entrepreneur by opening an Alfamind store one-to-one marketing for our customers. offering an infinite number of products »

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accessible from their own “With just a small investment, users can devices. This will develop entrepreneurship in our become an entrepreneur by opening an communities and Alfamind store offering an infinite number of empower small-to- medium retailers by products accessible from their own devices.” providing and extending their market and customer base.

Describe your work culture, and how do you inspire your employees? With more than 112,000 employees within the organisation, we really need to have common values to unite us as one big Alfamart family. We are very lucky, as our core values have been in force since our founding and are still very relevant today and for the future. They are the values of Integrity, Innovation, Quality, Productivity, What is the best business advice Teamwork, and Customer Satisfaction. you ever received? All these are the key components that Just do it, but do your best in doing Full page advert build our corporate culture. As a leader, it. Sometimes we have too many PT NUTRICIA I’m fully aware that I have to always considerations during the planning phase position myself in the right place to be and lose momentum. In many cases, able to deal with any situation. I should you just need to do it and learn from be at the front when giving directions it. You will know exactly whether you and sharing our vision, leading by have done your best, because you will example, and walking the talk – whereas find satisfaction when you do it. As long in other situations, I really need to be in as you do your best, the result is no the middle, among the team listening and longer important. Even if it fails, it’s just observing, dealing hands-on with details, a delay for another success. because retail is detail. But I should also be at the back to push the team moving What is your long-term goal for forward, to be the last guard that the Alfamart customers? team can count on. We will keep striving to provide reliability to our customers and the surrounding What is your work–life balance like? community and earn their trust – not When working, I just want to do my only to know what their needs are but best. It sounds simple, but making sure to anticipate what their needs will be. you’re always doing your best is something We also want to be true community that’s easy to say but often very hard to stores, not just a preferred grocery shop. do. We are too easily satisfied with good We already have more than 150 when we can do better and be doing our community zones on the second floors best. During my days off, I spend most of stores where the local community of my time with family, particularly with can use the space for events, such as my three boys. I enjoy my time being cooking demos, health and nutrition a father and being involved in my boys’ sessions, kids’ birthday parties, and even lives. We love to visit new places and aerobic classes. We want to understand explore new things together. our customers, not change them.

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