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The Indonesian smartphone market is increasingly concentrated at the top with the market share of the top five smartphone OEMs reaching the highest-ever level of 80% in Q1 2019, according to the latest research from Counterpoint’s Market Monitor service. Samsung, Xiaomi, OPPO, Vivo, and Asus, the top five smartphone OEMs by market share, are more than four years old in the market and have a strong offline reach now, as compared to previous years. This enabled them to reach users even in the least populated provinces in the eastern region of Indonesia.
Meanwhile, overall smartphone shipments in the country fell 4% year-on-year (YoY) during the quarter. This is due to a dip in demand post strong fourth quarter. Some of the key brands were sitting on inventory post-Q4 2018.
Commenting on the results, Research Analyst, Parv Sharma, said, “Indonesia is one of the key South East Asian markets which OEMs are keeping a close eye on. Almost two-fifths of the population lives in rural areas, which is much higher than more developed countries in the Asia Pacific (APAC) region. Further, 4G penetration, as well as coverage, is growing rapidly. This offers a big opportunity for smartphone OEMs to target feature phone and entry-level smartphone users looking to upgrade to 4G devices. This trend of upgrading will drive Indonesia’s smartphone market to grow by 7% YoY in 2019 as per our estimates.”
Entry-level devices in the sub-US$200 price bands dominate Indonesia’s smartphone market, occupying close to 75% of the shares by volume. However, going forward, we estimate the mid-tier segment to gain more traction as more Chinese brands to expand their product portfolio in the mid to high tier segment.
Commenting on the distribution landscape, Associate Director, Tarun Pathak said, “Offline still remains the dominant channel strategy for OEMs. Leading retailers like Erajaya have been successful in forging partnerships with key OEMs, and this is one of the reasons why we have seen that share of the top five brands expanding in the country. Additionally, the government will introduce a new rule in August, which aims to curb the distribution of illegal handsets. We believe this is a step in the right direction and will positively impact the leading retailers in the country.”
Exhibit 1: Indonesia Smartphone Sales Market Share - Q1 2019
Source: Counterpoint Research Market Pulse Q1 2019
Market Summary:
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