Carrefour’s Indonesian stores are being taken over by local franchisee CT Corp and the French retailer’s name in the country is to be phased out.

We are now entering the last days of Carrefour in Indonesia, following its spin-off in 2012, as local franchisee CT Corp is determined to phase the French name out of its stores within five years. The move in itself has not come as a surprise as we long suspected that the local partner was uninterested in sustaining the franchise agreement once it expires in 2017.

While the real impact will be marginal on the French retailer, it has a symbolic dimension: it marks the end of the French name in Southeast Asian streets. Indonesia has indeed become an increasingly isolated operation after Thailand, Singapore and Malaysia all fell by the wayside following Carrefour’s divestment of non-core assets.

But more than Carrefour, it is a general reflection on all the global retailers that have had to turn their attention back onto their domestic markets and thus often cut down on long-term, capital intensive investments in emerging economies.

The move marks another example in the never-ending problematic issue of choosing between today’s needs and long-term gains. After all, prospects for Indonesia remain seductive. Although the country remains poor (even by Asian standards) it is one of the most populous nations in the world, rapidly urbanising and boasting an economy that has quickly bounced back after the credit crunch thanks to a great reliance on its domestic market.

We see this announcement as the latest example of what Carrefour’s chief executive himself qualified as the “end of imperialism” – an age when Walmart, Carrefour, Tesco and the likes could plant flags globally, without meeting any local resistance and be celebrated.

However, local retailers and consumers have since learned, adapted and changed. In this respect the case of Carrefour in Indonesia is a good illustration, as the traditional store logos, overly-suggestive of the French tricolour, were replaced by the Indonesian colours, red and white. 

Earlier this year the franchisee declared “now we have the courage to use the new name. Therefore, we must have the courage to make a new breakthrough and become a trendsetter”. We believe this renewed confidence and ambition of local retailers against the world’s giants is not confined to Indonesia. Western retailers, which have led globalisation for over two decades, will need to radically review their relationship with the rest of the world. A challenge already accepted by Carrefour, which looks to move away from a multinational to a more transnational organisation.

  • Gildas Aitamer, retail analyst, Planet Retail