TEMPO.CO, Jakarta - Indonesian Chamber of Commerce and Industry Chairman (Kadin), Rosan Roeslani, explained the reason behind the downfall of Seven Eleven in Indonesia, which can be traced to their business model that isn’t compatible with Indonesia’s current condition.
She said that there are two contributing factors; thin margins and low sales volume.
“A person buys one coca cola but spend time there for a couple of hours, it just doesn’t fit their business model,” said Rosan Roeslani on Sunday, June 25.
The closure of Seven Eleven has baffled members of the public, considering that it has always been the favorite location for young generations to gather together.
According to Rosan, there are several reasons leading to the failure of Seven Eleven in Indonesia, one of it is that they rent vast spaces meant to accommodate social gatherings even though financially they are a business with a thin profit margin. It is a stark contrast compared to the successes of local well-known retail chains such as Indomaret and Alfamart.
Both local retail franchises mostly rent small spaces but produces a high sales volume which is considerably better than Seven Eleven.