Jakarta. It's 7 a.m. and 212Mart, a new convenience store chain in Indonesia, has opened its door to serve its first customers.

Shopkeepers greet each visitor with "Assalamualaikum," or "peace be upon you," welcoming them to selections of halal household items and consumer products. Do not expect to find any tobacco products, condoms or alcohol beverages here.

Established in 2017, the chain store derived its name from a religiously charged rally held on Dec. 2, 2016, when thousands of protesters took to the streets of Jakarta, demanding the arrest of then-Governor Basuki "Ahok" Tjahaja Purnama, a Christian of Chinese-descent, for blasphemy.

Some of those involved in the rally — who usually refer to themselves as "212 alumni" — have moved to evolve into a more permanent political movement, while others took to shape the enthusiasm into business enterprises.

"Indonesia is a Muslim-majority country, so there is a need for halal products in convenience stores. And the demand is growing," Irfan Syauqi Beik, the general secretary of Koperasi Syariah 212, a Bogor, West Java-based cooperative that holds the chain's trademark, told the Jakarta Globe in a recent interview.

"For example, if parents give money to their children to shop, they do not need to worry, as we do not sell alcoholic beverages, non-halal foods or cigarettes. So that can give them reassurance," Irfan said.

As a Sharia-based convenience store, Irfan said all of the products sold in 212 need to secure halal certifications from the Indonesian Ulema Clerics (MUI).

The store also pauses operations four times a day to adhere to the Islamic call to prayer, or adzan. Such practices are common in places like Saudi Arabia, but are rarely implemented by Indonesian shopkeepers, who typically take turns with employees to answer the call to prayer.

"After all, we are a Sharia-based convenience store," said Irfan, who is also a director of the Center of Islamic Business and Economic Studies at Bogor Agricultural Institute (IPB) and one of the few founders of 212Mart.

Business Scheme

As a cooperative, 212Mart relies on members to open new stores and expand networks. To open a new branch, an initiator should at least establish a community of more than 100 people, in which all of them also need to become a member of the 212 cooperative.

"That is one of our key challenges, to build a community. So for prospective investors or individuals who are interested in opening a branch, they need to make sure that they are supported by the community in the vicinity," Irfan said.

The franchise's first store opened in the Taman Yasmin housing complex in Bogor in May last year, with a Rp 320 million ($23,000) investment excluding rental and building renovation fees.

Today, the franchise currently operates 104 stores across the archipelago, most notably in the greater Jakarta area.

To open a new store, prospective members need to prepare a budget ranging from Rp 200 million to Rp 400 million, depending on the store standards and type. The higher the budget, the bigger the store. Profit sharing is mutually agreed upon by the community investors.

"The profit sharing is mutually agreed upon by the investors of each 212mart branch," Irfan said.

After creating a small community and preparing a budget, investors need to secure several permits by seeking operational business permission from city and regional governments.

"Securing permits from related authorities will be done by investors or the community with assistance from our committee of Koperasi 212. It is usually handled by our general manager," Irfan added.

Targets

The cooperative expects to more than double its total stores to 250 by the end of this year, Irfan said.

"Almost every week we inaugurate the opening of another branch in the greater Jakarta area. We are positive that the business is growing stronger," Irfan said. After all, momentum for the 212 brand remains robust, as almost every other week media covers the 212 alumni political maneuver.

Still, the chain-store is tiny compared to rivals that now dominate about Rp 90 trillion in the mini-market industry.

Alfamart, owned by publicly listed company Sumber Alfaria Trijaya, operates 13,376 stores across the archipelago and in the Philippines as of the third quarter last year, while Indomaret, which is owned by Indomarco Primastama, operates 14,846 stores in Indonesia, also as of the third quarter last year.

Currently, both retail stores have about a 95 percent market share, with Indomaret targeted to open 1,000 stores in Indonesia throughout this year.

Inversely, the convenience retail market has also seen a slow down over the past three years, forcing some businesses — like Modern Sevel Indonesia's 7-Eleven franchise — to close down.

"We are aware that our retail industry is declining, but we believe that our captive market still draws new Koperasi 212 members. That is our priority captive market. We have our attraction, that we can offer halal products ... I am sure that could ensure consumers, especially Muslims, to shop at our stores," Irfan said.

More Works Ahead

However, having a captive market may not be enough to survive.

"If they want to keep up their game and compete with other stores that already surpass them in market share, they need to focus on their business," said Tutum Rahanta, Indonesian Retail Business Association (Aprindo) deputy chairman.

"At first, they have this specific concept, but it is only the beginning, in the end, opening a convenience store is a business, how they are able to maintain their services and business operations, and also capturing large consumers. That's the one that matters," Tutum said.

Koperasi Syariah 212's Irfan recognizes the challenges the business must overcome to become sustainable in the future.

Currently, the cooperative does not have a distribution center, but is partnered with other companies to maintain its supply of products.

The 212Mart is also still in its infancy in terms of financial transparency. Irfan said 212Mart has yet to produce financial performance reports subject to public scrutiny, unlike other major and mushrooming publicly-listed convenience stores, which allows the public to monitor their financial performance.

Irfan added that non-Muslims should feel welcome to invest in the business as well.

"In the meantime [...] for investors [...] this is the ummah [Muslims in Indonesia] community [...] but it is possible for non-Muslim individuals or groups to become investors in this business, as long as they share the same spirit as us," Irfan said, adding that non-Muslim customers are welcome to shop at the mart.

Umi Habibah, a 76-year old woman who lives in a housing complex in Jatibening, Pondok Gede, said: "The price of several products are relatively the same as other stores, but the thing is they do not sell non-halal products, and it also located nearby my house than any other stores."