Indonesia’s largest retailer selling fashion apparel, beauty, and home products, Matahari Department Store (MDS) has recently increased its indirect ownership in the online marketplace MatahariMall.com to further broaden its business reach through e-commerce.
This is done by purchasing 7.3 billion shares in PT Global Ecommerce Indonesia (GEI), the parent company of MatahariMall.com which ownership is derived through its subsidiaries PT Rekata Sinar Bumi and PT Lenteng Lintas Benua.
The agreement is worth about Rp 164.9 billion, translating to about US$12.2 million in transaction. Following this purchase, it will also raise the company’s stake in GEI to a paid-up capital of 12 percent in total, increasing by 3.62 percent.
Prior to this, MDS has also raised its stakes in GEI back in January to 10.33 percent. But the company’s ownership has also since been diluted to 8.38 percent due to investments made by other shareholders.
With potential additional investments from other players which could further dilute MDS’ shares, this has resulted in the company’s decision to expand its control gradually.
Matahari Mall warehouses and ships about products from 5000 affiliated seller and web portal hosts. Besides, the online retailer also produces goods and sells them independently with home electronics currently seeing robust demand.
On the other hand, Matahari Mall also handles apparel, clothing accessories and food. The company’s monthly sales are reportedly outpacing year-earlier figures by 10 percent.
“The company sees large potential in the e-commerce sector. With increased stakes in the platform, Matahari secures opportunities for huge returns in the future. We will also be able to synergise MatahariStore.com into Matahari Mall’s existing platform, which will, in turn, widen reach across the country, as well as boost Matahari’s net profit,” MDS management team commented.
It is also reportedly said that MDS intends to maintain a stake of up to 20 percent in GEI by injecting an estimated Rp 590 billion in stages.
MDS currently owns and operates 148 stores in 68 cities across Indonesia whose locations include Jakarta, Yogyakarta, West Kalimantan and East Nusa Tenggara.
By Vivian Foo, Unicorn Media
This news is published on Reuters.