Strategy Increases Informal Trader Investment Discovered

Traditional Market in Medan City

Ahmad Kholil and Hubbul Wathan

Politeknik Negeri Medan, Universitas Sumatera Utara, Kampus USU, Jl. Almamater No. 1, Kota Medan, Sumatera Utara

20155 Indonesia

ahmadkholil@polmed.ac.id, hbwathan@polmed.ac.id

Keywords: Informal, tradears, strategy, SWOT.

Abstract: From the results of in-depth interviews with the seven related parties, it is concluded that the factors that

influence the informal income of Traders around the Traditional Market in Medan City. Different from other

reports and the informal sector or more often known by informal traders is increasing in number. The presence

of informal traders that continue to grow and increase also occurred in the city of Medan. Informal traders in

Medan City are mostly around traditional markets. This study aims to formulate a strategy in optimizing the

income of informal traders around the traditional market in Medan City. This research is expected to provide

benefits in optimizing revenue for informal traders and PD Pasar Medan city. The informal sector as a term

is usually used for a number of small-scale economic activities. The informal sector is considered as a

manifestation of the situation of employment growth in developing countries, so those entering these small-

scale activities in the city, primarily aim to seek employment and income rather than profit. Since those

involved in the sector generally come from low-income, low-educated, unskilled and predominantly

immigrant dominions, it is clear that they are not capitalists seeking profitable business and are not

businessman as they are known in general.

1 INTRODUCTION

The informal sector or more often known by informal

traders is increasing in number. The presence of

informal traders that continue to grow and increase

also occurred in the city of Medan. Informal traders

in Medan City are mostly around traditional markets.

North Sumatra as one of the most developed

provinces outside Java. As an area that is one of the

destinations of migrants from various regions, the

informal sector dominates the main job status in the

trade sector. In Table 1. It can be seen that 63.83% or

about 3.87 million people work in the informal sector,

while for the formal sector only about 36.28% or 2.19

million.

The informal sector as a term is usually used for a

number of small-scale economic activities (Alma,

2001). The informal sector is considered as a

manifestation of the situation of employment growth

in developing countries, so those entering these

small-scale activities in the city, primarily aim to seek

employment and income rather than profit. Since

those involved in the sector generally come from low-

income, low-educated, unskilled and predominantly

immigrant dominions, it is clear that they are not

capitalists seeking profitable business and are not

businessman as they are known in general.

The presence of informal traders that continue to

grow and increase as well as in the city of Medan,

most informal traders depend their lives on the

existence of traditional markets. However, the current

development of traditional markets is very

insignificant and even declining because of the

difficulty of structuring and managing the places that

cannot attract merchants to sell goods on the available

spots in traditional markets.

One of the problems in the development of

traditional markets in Medan is the difficulty of

arranging informal traders who prefer to sell in the

street stands that causes inconvenience of buyers and

traffic of vehicles that are hampered by trading

activities. Informal Traders who basically have

limitations in venture capital, expertise and

knowledge of the existing rules become a problem

that has to be taken care of. Some alternative that can

be done is expected to overcome the existing

problems.

Kholil, A. and Wathan, H.

Strategy Increases Informal Trader Investment Discovered Traditional Market in Medan City.

In Proceedings of the Annual Conference on Social Sciences and Humanities (ANCOSH 2018) - Revitalization of Local Wisdom in Global and Competitive Era, pages 275-285

ISBN: 978-989-758-343-8

275

The Medan City Government has been trying to

accommodate informal traders' demand by providing

areas for local markets, but informal traders are not

willing to sell their goods in the provided place

because the places are seen as not being strategic.

The SWOT Matrix is an important matching tool

to help decision makers develop 4 (four) types of

strategies. The four types of strategies are SO

Strategy, WO Strategy, ST Strategy, and Strategy ST.

In this matrix, using key success factors for internal

and external environments is a difficult part so good

judgment is required. The usefulness of the SWOT

matrix is to formulate a feasible alternative strategy

to implement, not to choose or determine which

strategy works best. So not all strategies are

developed in the SWOT. Table 1 shows the informal

merchant SWOT matrix PD Pasar Kota Medan as a

manager of traditional markets experienced problems

with store occupancy rate, kiosks and stall selling

under 80%.

2 LITERATURE REVIEW

2.1 Understanding the Informal Sector

The paper size must be set to A4 (210x297 mm). The

informal sector is generally defined as a sector

comprised of small business units that produce,

distribute goods and services with the ultimate goal

of creating employment and income for themselves

respectively as well as in their efforts is greatly

limited by capital and skills factors (Sinungan, 1988).

Meanwhile, according to Hadionoto (1996) who

stated that the choice of the informal sector is an

answer to the low education and skills possessed by

street children. The investment required for this

sector is relatively low and does not require special

skills or skills requirements.

2.2 Characteristics and Examples of

the Informal Sector

The informal business sector has only a small and

narrow scope of economic enterprises, since the

informal business sector is carried out by people who

may not be capitalized. In fact, the actors in the

informal sector can only borrow merchandise from

large entrepreneurs, then sell in their own way

without a neat sales organization. The sellers of

newspapers and magazines in big cities often borrow

the merchandise they sell, after the merchandise is

sold, and then they pay it off. The following describes

the characteristics of the informal sector:

• Has no business permit.

• Capital is not too large, relatively small.

• The number of workers involved is not too much

• In running the business does not require formal

education, special skills but only based on the

will or experience. The technology used is very

simple.

• Less understanding of how to manage finances.

• Business hours are not regular.

• The scope of his business is small.

• The type of business that is usually done in the

form of: craftsmen, trade and simple services.

• Production results tend to lower middle

segment.

The Characteristics of the Informal Sector is

different from the formal sector, in summary in Table

1 it can be seen the difference between the two

sectors.

Table 1: Formal and informal character sector.

Source: Hadionoto, 1996.

Some examples of businesses in the informal

sector are:

• Street Traders

Street vendors we can meet on the street or in

the village. Street vendors in peddling

merchandise using carts, tables with tents as a

place to take shelter.

• Wholesalers

The traders are the ones who peddle goods by

thrusting goods to prospective buyers. Goods

offered are lightweight and portable goods such

as mineral water, newspapers, cigarettes,

No Informal character

sector

formal character

sector

1 Easy to access Difficult to access

2 depending on local

resources

depending on

external resources

3 family ownership

system

company ownership

system

4 operate in small cases

operates in large

numbers

5 technology is adaptive

using imported

technology

6 skills can be obtained

from outside

requires skill from

school

7 unorganised protected

ANCOSH 2018 - Annual Conference on Social Sciences and Humanities

276

candies, tissues, and others. These traders we

encounter at street intersections in urban

markets, at bus stops, at terminals, on buses, on

trains, and at stations.

• Grocers

Merchants who sell their goods from door to

door and from one place to another. They use

motorcycles, cars, carts, and others to carry

around. And they sell daily necessity.

3 RESEARCH METHOD

3.1 Types of Research

The research was conducted in traditional market

managed by PD Pasar Kota Medan. In each

traditional market there are informal traders. The type

of research in this study is action research, a study

conducted to obtain practical findings or for the

purposes of operational decision making. Because the

purpose is for operational decision making in order to

develop new skills or new approaches (Sinulingga,

2011).

Population is the whole subject of research that

includes all elements that exist within the research

area (Arikunto, 2006). The population in this study

consists of the competent parties provide information

about informal traders who sell around the traditional

market managed PD Pasar Medan namely:

• The Director of Operational of PD Pasar Kota

Medan

• Chairman of Traditional Traders Association of

Medan City

• Vice Chairman of Traditional Traders

Association of Medan City

• Chairman of Traditional Market Traders

Cooperative Medan City.

• Chairman of Association of Street Traders

(APKLI) Medan City

• Vice Chairman of APKLI Medan City

• Secretary of APKLI Medan City

3.2 Data Collection Technique

Data were obtained from in-depth interviews with the

seven specified parties. Interviews were conducted

separately, then the researchers formulated the

interview results coupled with supporting documents.

3.3 Data Analysis

Data and information obtained from seven parties

related to informal traders and traditional market

operations managed by PD Pasar Kota Medan, were

collected and then analyzed by using environmental

analysis that is an analysis of internal environment of

company which produce strength and weakness and

also external environment of company which

generate opportunities and threats (Rangkuti, 2008).

SWOT is an acronym for Strengths, Internal

Weakness, and Opportunities and Threats from the

company's external environment. The SWOT

analysis is based on the assumption that an effective

strategy maximizes the strengths and opportunities

and minimizes the weaknesses and threats of a

company (Umar, 2004).

4 RESULTS AND DISCUSSION

From the results of in-depth interviews with the seven

related parties, it is concluded that the factors that

influence the informal income of Traders around the

Traditional Market in Medan City, from the aspect of

opportunities and threats include:

Table 2: External factors affecting income informal traders

around traditional market in Medan city.

External Factors

(Opportuinty)

Regulations of a provisional rule of

overnment

2 Growing Informal Sector in North Sumatra

Increase your visit to the city of Medan for

sho

in traditional markets

Flexibility of Informal Trade in the

market

lace

5 Flexibilit

in the world of strate

ic tradin

(

Threat

)

1 The eviction and control can happen anytime

Lots of malls or plazas, self-catering, and

minimarkets are continuall

bein

added.

Information technology makes it easy to find

and choose between online media

4 Com

etition faced b

fellow informal traders

Illegal charges and threats of bullying that

reduce the income of informal traders

Source: Data Processing Results, 2018.

4.1 Factors Included in Opportunities

The following describes the explanation of each

external factor that affects the income of informal

traders around the traditional market in Medan City.

Strategy Increases Informal Trader Investment Discovered Traditional Market in Medan City

277

4.1.1 Traditional Government Regulations

in Favor of Traditional Markets (O

)

Development and fostering of informal traders in

traditional markets is fully supported by the

government, as evidenced by the government's role in

Government Regulation No. 32 Year 1998 on Small

Business Development and Development related to

the role of government in developing and developing

small-scale enterprises in the informal sector in order

to play a role in realizing the economy national level

that is getting better and balanced based on economic

democracy in Indonesia. Further supported by

Presidential Regulation no. 112 of 2007 on the

arrangement and fostering of traditional markets,

shopping centers and modern stores. This regulation

regulates technically the division of business between

traditional markets, shopping centers and modern

stores. In some provisions of the article, the

Presidential Regulation provides very clear on the

location and terms of establishment, building area,

hours of operation, provision of goods, licenses, and

guidance and supervision for traditional markets,

shopping centers and modern stores. This regulation

is made with the objective of protecting and

developing small business as well as efforts to

develop small business in order to move forward and

develop.

Related issues of public interest and national

interest are basically the spirit of nationalism of

policy makers. One of the tasks of the government is

to seek the strengthening of the economy from within

so that domestic business actors or informal traders

can compete with outsiders. Strengthening the

economy is by conducting guidance to informal

traders (UMKM) to innovate in order to compete with

foreign business actors.

It is said that informal traders because some of

them are not clear the status of their business.

Certainly influenced by various factors that actually

harm not just one party. Government support has not

been fully realized, especially in this class (Siregar

and Hidayat, 2012).

4.1.2 The High Growth of the Informal

Sector in North Sumatra (O

)

Based on data from the Central Statistics Agency of

North Sumatra noted that according to the main

employment status in February 2016, the population

working on formal activities amounted to 2.19

million people or 36.18 percent. While working on

informal activities amounted to 3.87 million people

or 63.82 percent. From these data shows the high

growth of Informal Traders in North Sumatra.

Improved economic conditions are an opportunity for

informal traders to increase their income through a

viable strategy. Business opportunities and high

public interest spending are the drivers of the growth

of the informal sector in Medan. The number of

public spaces and traditional markets in Medan City

make informal traders freely to sell. The high interest

of consumers to shop in the informal sector keeps

informal traders on hold and will continue to grow

every year (www.medantribunnews.com).

The high interest of shopping in the community to

the area of Medan is a fresh breeze for a trader to

continue to develop his business. In the future there

are more and more traders, including the informal that

comes up with the variety of products they offer. The

way to have an optimal income is to improve the

quality in running the business.

4.1.3 Increased Consumer Visits Outside the

City of Medan to Shop in Traditional

Markets (O

)

The city of Medan as the capital of North Sumatra

Province becomes the attraction for the surrounding

community to buy various types of products for

resale. Traditional markets managed by PD Pasar

Kota Medan some of them are Small and Medium

Micro Enterprises in the form of big shops or

wholesalers who act as suppliers to various stores or

informal Traders both within and outside the city of

Medan (www.analisadaily.com).

Enthusiastic people who come from outside the

city of Medan on the scope of North Sumatra who are

accustomed to direct shopping to Medan within a

certain time with a variety of needs to be traded back

in the place of origin or to meet personal

consumption. Usually the type of community with

this type has its own assessment criteria that regard

Traders in the city of Medan both Formal and

Informal have their own uniqueness that they do not

find elsewhere. This has become a valuable value for

traders because it has been able to create a good

impression even for people outside the city of Medan.

The position of Medan as the capital of the

province makes Medan a place of transit. Even in

some big cases such as meetings, competitions, and

performances the city of Medan has greater

opportunity to be chosen than other cities. This can

certainly be a valuable opportunity when Traders can

work together to build a good image at all times to the

buyer. Such as the management of convenient

shopping places and the placement of traders in a

structured way.

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4.1.4 Informal Trader's Flexibility in

Following Market Demand (O

)

The flexibility of informal traders in adjusting market

demand with goods or products sold encourages an

increase in the informal sector in Medan City. The

price of goods and products are cheap because

unencumbered traders with leasing of premises and

business licenses, make consumers choose to buy

goods through informal traders. The service to meet

the consumer directly in selling the products and

goods becomes a separate value owned by informal

traders. Its flexible existence makes it easy for

consumers to find informal traders in public places in

Medan City.

The main characteristic of Informal Traders

presence is unrestricted and always depends on the

conditions that make the sector more responsive to

adapt. But the impact on income that becomes erratic

each time will make an adaptation.

4.1.5 Flexibility in Finding a Strategic Place

of Trade (O

)

Place becomes one of the biggest factors for a trader

to determine success. Informal Sectors that do not

have fixed stalls will make it easier to move around

in accordance with their own needs without any

personal harm. Moving is a step toward finding new,

unbound and new opportunities for new profits. If this

continues to happen it will reduce the market

atmosphere and confuse the already comfortable

consumer.

4.2 Factors Included in the Threat

In addition to the factors included in the

opportunities, external factors included in the threat

criteria are described below.

4.2.1 Evictions and Controls that can

Happen Anytime (T

)

Evictions by local governments to informal traders

are a very common threat. The existences of informal

traders who sell not in place become the main reason

for evictions. Evictions are always carried out in a

way that is not feasible and continually cause unrest

for both buyers and informal traders who are in the

point of location. The importance of proper direction

and planning is the best solution to discipline while

protecting informal traders. We know that Informal

Traders is a sector of MSME which with its

empowerment will prosper regional income and

trader itself. Evictions will cause traders to move

suddenly without preparation even in conditions that

are not ready. Not only informal traders, buyers and

others involved can also feel the impact of evictions.

The government is experiencing a dilemma in this

case, traditional markets managed by local

governments are revitalized to provide comfort, but

informal traders increasingly, thereby reducing the

entirety.

4.2.2 The Number of Malls or Plazas,

Supermarkets, and Minimarkets

Continues to Grow (T

)

The growth of various shopping centers such as

plazas and minimarkets poses a serious threat to

informal traders as well as to traditional markets. The

location is very strategic and close to the traditional

markets to give impact to upper middle class to shop

for basic needs no longer in traditional markets. So as

to impact the declining income for informal traders

who peddle merchandise in traditional markets. The

comfortable market atmosphere is able to maintain

the visitors is different from the traditional Market

with a solid nuance.

Plus the existence of shopping system with only

capitalize internet network plus direct delivery

facility to the address of course greatly facilitate the

life of urban special community today. This is

certainly a serious threat due to the lifestyle of today's

society that prioritizes comfort so as to put aside

many other factors.

4.2.3 Information Technology that Allows

Consumers to Choose and Buy Goods

through Online Media (T

)

Informal Traders are accustomed to only maximizing

product promotion when they have shown the product

in place that they live at that time with consumers who

are also in the same place. It is unfortunate that a

merchant sells an attractive product but because the

place is always on the move, the buyer becomes not

fixed.

Various online shopping applications are growing

in Indonesia. The easiness and convenience afforded

to consumers is a significant advantage. Various

features, visual products and variety of products

offered make the customers interested in buying.

4.2.4 Competition Faced by Informal

Traders (T

)

It is easy to be an informal trader, making the

emergence of informal traders an enormous amount.

This indirectly makes the competition among

Strategy Increases Informal Trader Investment Discovered Traditional Market in Medan City

279

informal traders increasingly tight. The absence of an

institution or organization that accommodates

informal traders leads to non-partnership and

business sharing.

4.2.5 There are Illegal Levies and Thuggery

Threats that Reduce Informal

Merchant Revenues (T

)

The existence of informal traders is increasingly and

cannot be controlled because of certain parties that

protect. The existence of a dominant youth

organization as a party given rights in parking

management, it becomes an indirect threat to the

existence of informal traders in the form of illegal

levies and the threat of thuggery.

Resident traders also encourage their families to

become informal traders. This is because as long as a

formal trader who obeys the demand of market

managers it is not a guarantee in business security.

Issues such as overpriced rent, unhealthy places,

inconvenient comforts and regulations encourage

merchants to opt into Informal Traders.

Giving access to credit or loans to raise capital is

also very difficult to access by informal traders in

traditional markets. This is because due to

complicated procedures and credit requirements,

bureaucratic, and so on. Based on the research, the

percentage of capital used as much as 86.8% is its

own capital. In addition, relatively small capital

becomes the main reason why informal traders cannot

afford to open a shop or sell at a place that has been

provided PD Pasar Kota Medan.

The following describes the factors influencing

the non-optimal income of informal traders around

the traditional market in Medan City from the internal

environment side, which is shown in Table 3.

Table 3: Internal factors affecting informal traders'

revenues around the traditional market in Medan City.

Internal Factors

(Strenght)

1 Small Relative Capital

2 Item Prices Cheape

3 It can be found by heart that it does not require

special skills

4 Can be easier to make the job easie

5 Advantages can be instantly enjoyed

Weakness

(Weakness)

1 Limitations in terms of business developmen

2 Rental prices for expensive venues

3 Lack of ability in accessing materials or

merchandise from suppliers

4 he ability to take advantage of a less than optimal

smartphone

5 Informal traders lack protection and security.

4.3 Factors Included in Strength

4.3.1 Relatively Small Capital (S

)

To build Small and Medium Enterprises (MSMEs)

through the informal sector does not require large

capital. With the capital roughing informal traders

can sell products and goods to consumers they meet.

This small capital resulted in a short turnover of

capital so that they would not be difficult to resume

trading the next day. These advantages resulted in not

a few people willing to pursue the profession of

informal traders’ background even though the income

generated is also not large.

4.3.2 Cheaper Goods Price (S

)

With relatively small capital accompanied by a

quantity of goods that do not make much informal

traders can more freely move position from one place

to another where this factor is one side advantageous

because of reduced costs that should be charged by

taxes and retribution in trading environment. The

absence of additional costs, making the price of goods

and products.

Offered by informal traders will be cheaper than

the prices found in kiosks or other stores. When in

fact the price of goods that are cheaper will have an

impact on consumer interest, but the condition of laps

that do not settle sometimes can divert the existence

of consumers.

4.3.3 Can Be Established by Anyone and

Does Not Require Special Skills (S

)

Being an informal trader does not need any special

background so it is the right choice for anyone who

wants to trade without big risk. This encourages the

growth of informal traders every year. The informal

sector is very important to note in order for rapid

growth to be balanced with proper handling. Positive

economic growth is expected by society that is not

causing any problems either environmentally or

socially in the future.

4.3.4 Can Absorb Labor More Easily (S

)

The large number of people in both big and small

cities creates many labor force. Not all labor forces

have a chance to work in the formal sector. Especially

for people with a background of regular education,

certainly prefer the direction of the informal sector

that is more dynamic. The informal sector can absorb

the workforce by providing space to keep working not

in idle predicates. These entrepreneurs will work on

ANCOSH 2018 - Annual Conference on Social Sciences and Humanities

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small business fields with limited capital and do not

require any special managerial skills. Empowerment

may be able to develop a business of an informal

trader to enable a trader expand his business that

absorbs other labor.

4.3.5 Profits Can Be Directly Used (S

)

With an effort that passes only a few cycles and does

not require a special recording certainly will make it

easier for people who cultivate this field to manage

the money in and out of something that is needed. If

not careful, the business can be a loss and vice versa.

In these circumstances awareness of a more serious

trade is needed. The goal is for the traders the still be

able to sell every day without complaining about the

limited capital that is often due to incorrect

management.

4.4 Factors Included in Weaknesses

4.4.1 Limitations in Terms of Business

Development (W

)

Constraint many traders experienced in the informal

sector mainly is limited capital, especially working

capital. With the status of work that does not have

official permission, making informal traders

difficulties in getting additional capital and

constrained in developing its business due to limited

funds. Access to credit or loans to increase capital is

very difficult to access by informal traders in

traditional markets. Due to complicated, bureaucratic

procedures, credit requirements, and so on. Based on

the research, the percentage of capital used as much

as 86.8% is his own capital. A relatively small capital

is the main reason why informal traders can not afford

to open a store or sell at a place that has been provided

by PD Pasar. Yet by helping merchants to increase

revenues will certainly affect the prosperity of the

market and local revenue.

4.4.2 Rental Price of Expensive Place to Sell

)

Informal traders complain about the expensive cost of

shop and kiosk rental. Meanwhile, sales turnover is

not too high, in addition to competition among

informal traders. Thus, price competition must occur

to attract customers.

Informal traders initially only sell in narrow

alleys. Along with the high cost of selling places,

informal traders start selling along the buyer's traffic

area. However, this move turned out to make the

market more uncomfortable, and eventually the

buyers became reluctant to shop in traditional

markets.

4.4.3 Lack of Ability to Access Raw

Materials or Merchandise from

Suppliers (W

)

The ability to access merchandise from suppliers is

also a disadvantage of informal traders. This is

certainly due to the low bargaining power of informal

traders to suppliers, because they buy small amounts

of data. Another problem is the procurement of raw

materials (e.g., too far, expensive, and not always

available), lack of expertise in certain types of

production techniques (e.g. skilled or expensive

designers / designers), and lack of management

expertise. Next is a keen competition and low

communicating ability, including their access to

facilities that should be available but difficult to

communicate. This is certainly comparable to that of

fixed traders who are superior in access so as to know

informal sector traders are lagging behind. This is

certainly due to the low bargaining power of informal

traders to suppliers, because they buy small amounts

of data. Another problem is the procurement of raw

materials (e.g., too far, expensive, and not always

available), lack of expertise in certain types of

production techniques (e.g. skilled or expensive

designers / designers), and lack of management

expertise. Next is a keen competition and low

communicating ability, including their access to

facilities that should be available but difficult to

communicate. This is certainly comparable to that of

fixed traders who are superior in access so as to know

informal sector traders are lagging behind.

4.4.4 Improper Marketing Communication

Skills (W

)

Competition in business is not only in terms of quality

and price, but also in services after sales and product

appearance. With various limitations, ranging from

limited funds, skills, to difficulty to obtain good

quality raw materials, making many informal traders

and home industries in Indonesia difficult to improve

the quality of their products in order to compete in the

domestic and export markets. Especially when they

have to deal with the lack of security guarantees and

the difficulty of maintaining the place of business

they run as informal traders. In addition, in promoting

merchandise also does not utilize communication

tools such as smartphones that now have become the

basic necessities in communicating. Various

applications that can be a means of promotion are not

put to good use.

Strategy Increases Informal Trader Investment Discovered Traditional Market in Medan City

281

4.4.5 Informal Traders Lack Protection and

Security (W

)

The presence of Informal Traders is not really

something that the Government expects. Due to its

status as a temporary trader still known for its

incompetence and difficulty in management, it affects

the difficulties of informal traders getting help from

the government. Therefore, the Government hopes

that they will not only become informal traders but

become permanent traders who are able to contribute

to contribute later. Thus, there is a gap in the

relationship between the market government and

Informal Traders.

4.5 SWOT Matrix Compilation

This matrix is used to identify strengths and

weaknesses within the company's internal

environment, while opportunities and threats in the

company's external environment (Rangkuti, 2008).

Analysis of the strengths and weaknesses that exist in

the internal environment is primarily directed towards

key success factors. So with this analysis it is hoped

that there will be a way to develop and utilize

strengths and support or reduce weaknesses in order

to exploit opportunities and reduce threats (David,

2006).

4.6 Strategy Application

From all proposed alternative strategies obtained

from the analysis of IE Matrix, and SWOT Matrix,

then grouped into 4 (four) strategic applications as

shown in Table 6.of 4 (four) quadrants namely:

1) S-O Strategy

• Establish Cooperatives for informal traders

that make it easier for them to borrow

Business Capital.

• Develop a market concept as an economic

corridor or a tourist market by improving

hygiene and adding facilities or

infrastructure for informal traders.

2) S-T Strategy

• Establish cooperation with financial

institutions in informal merchant financing.

• Establish cooperation between merchants

and suppliers with consideration of high

liquidity from informal traders.

• The leadership of the PD Market builds

partnerships with private traditional market

managers, to deal with illegal levies and

thuggery, which is a facilitator for informal

traders.

3) W-O Strategy

• Provide assistance in the form of payment

relief installment place official trade with

process easy and fast.

• Joining the merchant's cooperative to

develop faster and legal business.

• Placing CCTV in various strategic locations,

as a form of supervision to informal traders

who do not occupy predetermined areas.

4) W-T Strategy

• Involving SOEs in the form of CSR

programs to informal traders aimed at

providing network-building skills with

suppliers and capital assistance for business

leases.

• Enhanced the ability of informal traders by

optimizing smartphone functionality

• Informal merchant cooperatives build

partnerships with private traditional market

managers.

• Pemko Medan encourages mall or plaza

owners to provide special areas for informal

traders on a certain day or time.

4.7 Discussion

Informal traders and traditional markets should be

taken seriously by the government. The government

should consider the sustainability of traditional

markets and informal traders by maintaining fair

competition between traditional markets and modern

markets. Among them is regulating the balance

between the number and location of the modern

market. The modern market must be placed

somewhat away from traditional markets and the

numbers are limited, not to the traditional markets

surrounded by modern markets / mini markets. This

restriction is to maintain the continuity of small

traders who are in many traditional markets.

The existence of the informal sector in the

national economic development system has shown its

role significantly. In addition to toughness, ease of

substitution and business flexibility, the informal

sector also promises a pretty good economic outlook.

It is proper that the sector is developed in harmony,

serious and polite.

The most important form of urban informal sector

to foster is the Informal Traders. Along with growth

in other cities, the efforts of informal traders can also

be dynamic and growing. It can be seen from

Informal Traders activities that provide promising

prospects if the government delivers special attention

and makes some form of regulation in the context of

coaching and development. The Informal Traders'

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business flexibility is very likely to evolve over time.

The government is expected to raise the presence of

Informal Traders as partners as well as provide

flexibility in the business. Legally, legal guarantees

are also needed for the business they undertake to

avoid being misused by many parties.

The difficulty of obtaining loans in business

development often shows the stigma of the

relationship between the Informal Traders and the

relevant government. Business protection and capital

that should be accessible, not least felt by small

traders. This situation is often followed by repeated

evictions which further encourage inconsistencies in

various situations and parties. Background with a

modest education shows the ability to communicate

and manage their own capital that is sometimes not

fully structured. Naturally the application of business

rarely reveals innovation and follows the times as

competitors do.

5 CONCLUSIONS AND

SUGGESTION

5.1 Conclusions

From the results of the discussion, the factors that

lead to informal sales revenues around traditional

markets are not optimal because limitations in

business improvement, the rental price of expensive

places to sell on traditional markets, lack of ability to

access raw materials and merchandise from suppliers,

lack of ability to use communication technologies

such as smartphones, lack of protection and security,

confiscation by security, the number of malls or

plazas, supermarkets, and minimarkets continues to

grow also information technology that allows

consumers to choose and buy goods and competition

faced by informal merchants.

5.2 Suggestion

From the conclusion, it is advisable: PD Pasar Kota

Medan and Koperasi Informal Traders conduct a

partnership to provide a place to sell on the upper

floors of traditional markets for informal traders with

cheaper rental system, but with restrictions on

duration of rent for example for 6 (six) months, and is

not allowed to be extended by informal traders the

same, allowing other informal traders to take turns

using the area. PD Pasar Kota Medan performs

detailed and complete data collection on informal

traders in order to mapping the potential of each

informal trader that can be fostered through

partnership with Informal Traders Cooperative.

Cooperate between PD Pasar Medan and Dinas

Pemuda and Sport and Gardening Agency to arrange

informal traders not to sell in areas passed by motor

vehicles. For example the parking area football

stadium that can be used for informal traders selling

from morning until noon with the system open-close

stall, so that the area used back clean in the afternoon.

Provide convenience in terms of capital to develop

business so that more and more traders are not

worried about competing with modern competitors so

that businesses are able to grow and able to open jobs

that can be felt others. Conducting management

related to the laying of kiosks or stalls of traders

according to the goods sold. After the placement is

done, regulation should be made to do the mutual help

of the market as well as the mapping of homogeneous

selling locations in the form of lists listed in various

corners of the market in order to facilitate the

consumers find the required seller. Sanctions are also

required against merchants who are unable to meet

the rules and maintain cleanliness. And issued a

regulation ban on street sales in addition to stalls.

Pemko Medan and Dinas Kopeasi UMKM in

cooperation with the Department of Parks as the

manager of Football Stadium, so that the stadium

parking area can be used for the place of selling.

Informal traders are given a special place in the

stadium parking area from morning until noon,

because stadium activity usually does not exist at that

time. If it is past the deadline traders are expected to

leave the place selling, and clean the place of business

to return clean and does not interfere with the interests

of others.

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Jakarta.

Hadionoto, K., 1996. Perencanaan pengembangan

destinasi pariwisata. UI Press, Jakarta.

Http://medan.tribunnews.com/2017/05/08/jelang-bulan-

suci-ramadan-beberapa-pasar-tradisional-sudah-

naikkan-harga-ayam-potong, diakses pada tanggal 26

Januari 2018

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pedagang-informal-pelataran-pasar-petisah-

ditertibkan/19055/2014/04/04, diakses pada tanggal 26

Januari 2018

Strategy Increases Informal Trader Investment Discovered Traditional Market in Medan City

283

Peraturan Pemerintah No. 32 Tahun 1998 tentang

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APPENDIX

Appendix 1: Matrix SWOT informal traders around the traditional market in Medan City.

(Strengths) S (Weaknesses) W

1. Capital is relatively small

2. The price of the Goods is

cheaper

3. Can be established by anyone

and does not require any special

skills

4. Can absorb labor more easily

5. Direct benefits enjoyed

1. Limitations in business development

2. The rental price of the place is

expensive

3. Lack of ability to access raw materials

and merchandise from suppliers

4. Lack of ability to use communication

technology such as smartphones

5. Lack of protection and security..

(Opportunities) O Strategy S – O Strategy W – O

1. Government regulation in

favor of traditional markets.

2. The high growth of the

Informal Sector in North

Sumatra

3. increasing of Population and

increasing of consumer visit

outside Medan City

4. Informal Trader's flexibility

in following market demand

5. Flexibility in finding a

strategic place of trade.

1. Establish cooperatives for

informal traders that make it

easier for them to borrow

capital business

)

2. Developing the concept of a

market as an economic corridor

or a tourist market by

improving cleanliness and

adding facilities or

infrastructure for informal

traders (S

)

1. Provide assistance in the form of

payment relief mortgage official place

with easy and fast process. (W

)

2. Joining a merchant's cooperative to

develop faster and legal business

)

3. Placing CCTV in various strategic

locations, as a form of supervision to

informal traders who do not occupy

predetermined areas. . (W

)

(

Threats

)

T Strate

–

TStrate

–

1. Confiscation by Security

2. The number of malls or

plazas, supermarkets, and

minimarkets that continue to

grow.

3. Information technology that

allows consumers to choose

and buy goods.

4. Competition faced by

informal merchants

5. There are illegal levies and

thuggish threats that reduce

informal merchant revenues

1. Building cooperation with

financial institutions in

informal merchant financing

)

2. Establish cooperation between

merchants and suppliers with

consideration of high liquidity

from informal traders. (S

)

3. The leadership of the PD

Market builds partnerships

with private traditional market

managers, to deal with illegal

levies and thuggery, which is a

facilitator for informal traders

)

1. Involving BUMN in the form of CSR

programs to informal traders aimed at

providing network-building skills with

suppliers and capital assistance for

business leases (W

)

2. Improvement of informal merchant

capabilities by optimizing smartphone

functionality ( W

)

3. Informal merchant cooperatives

establish partnerships with private

traditional market managers (

)

4. Pemko Medan encourages mall or

plaza owners to provide special areas

for informal traders on a certain day or

time.

(

)

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