Hardware in the mall

The US retail cooperative Ace Hardware is one of the top ten retailers in the global DIY business, with over 4 850 stores and sales totalling approximately € 3 bn. But here’s the question: where is its biggest store to be found? Answer: the biggest Ace store in the world is in Indonesia. In July 2011, the company’s local franchise partner, PT. ACE Hardware Indonesia, Tbk, opened an Ace Hardware store with a retail area of 15 000 m² in the Living World Mall Alam Sutera in South Tangerang.
The American cooperative’s Indonesian partner is pursuing an aggressive expansion strategy. At the end of April 2014, the company opened its 100th store in Indonesia in Surabaya, the capital of Jawa Timur (East Java) province. Ace is represented in 28 cities in Indonesia and plans to expand to other cities. It employs over 10 000 people.
This expansion strategy has put the retail group in a strong position, and not just in Indonesia. “We are the market leader in the home improvement sector in the Philippines and in Indonesia,” says Bob Moschorak, president and general manager of Ace Hardware International Holdings, Ltd.
Ace has been operating in Indonesia since 1995. Its 100 stores there have retail areas ranging in size from 1 000 to nearly 15 000 m2. The master franchiser is the Kawan Lama Sejahtera group, which is also active in the industrial sector.
Ace entered the Philippines market in 1997. The master franchiser there is the SM Group, a family-run business in the grocery sector and a shoe retailer. It runs about 115 Ace stores with retail areas ranging between 1 200 to 1 500 m² on average, which tend to follow the typical Ace store size format found in the USA. There are also 45 Ace Express stores, which are 300 to 400 m² in size and are integrated into department stores of the SM Group.
A year later the US cooperative branched out into another South-East Asian country, Malaysia. Ace’s current Malaysian partner, Giant Ace SDN BHD, has 15 outlets, likewise with an average retail area of roughly 1 500 m².
Expanding into Malaysia was only logical for Ace, because compared with the other two countries it has a much more developed retail market with consumers who look for high quality, says Bob Moschorak. “Malaysia is a market that from a consumer standpoint is very similar to more developed markets,” is his description of the retail situation. A better class of products and brands is demanded. “People go to shop,” says Moschorak, summing up the lifestyle of a country…