February 24, 2024

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Pandemic continues to drive smart device sales in Indonesia

Smartphone sales in Indonesia grew throughout the year and topped in the fourth quarter of 2020, with 20% sold online, said a report, which was analysing shipment data. After a decline in the first two quarters, sales rebounded later in the year, recording 23% year-on-year (YoY) growth in the final three months.

The International Data Corporation (IDC) Indonesia also noticed a sharp drop of 18% YoY in the first half. Smartphone shipments bounced back strongly with 19% YoY growth between July and December, reaching 11.7 million units in Q4. Overall, 36.8 million phones were sold in 2020, a 1% YoY growth from 2019.

They added that the new International Mobile Equipment Identity (IMEI) regulation, which was launched last year, helped minimise the circulation of illegal phones sold on the black market. This played a role in the recovery of the smartphone market in 2021. IDC estimates the Indonesian market to grow around 20% this year.

According to the IDC’s Quarterly Mobile Phone Tracker, pent-up demand due to the supply shortage and retail shutdown in the second quarter of the year plus the increased utility of smartphones to support various stay-at-home activities led to a swift recovery of smartphone sales throughout the second half of the year. Lower consumer spending power and the need for a decent smartphone drove the growth of the low-end (US$100<US$200) segment to reach 65% market share, up from 45% in 2019.

Indonesia’s smartphone market was resilient amidst the COVID-19 pandemic, which changed how people interact. The need for a smartphone soared, be it to support Work-from-Home, Home-based-Learning, streaming entertainment services, or simply communicating virtually, says IDC Market Analyst for client devices, IDC Indonesia.

Accordingly, as reported by OpenGov Asia, online shopping using smartphones, laptops, and desktops are still the people’s primary choice during the COVID-19 pandemic. Moreover, this business model is one of the main ways businesses have been able to survive during the crisis.

This year online sales recorded record increases and set new benchmarks. Data from the Ministry of Communication and Information Technology shows that sales of products on social media and e-commerce portals in 2020 amounted to IDR 446.75 trillion (US$ 31.65 billion). This value represents an increase of over 400% compared to 2017 which amounted to IDR 124.9 trillion (US$ 8.88 billion).

The Minister of Trade went on to explain the four strategies to survive and increase sales in the current pandemic conditions. First, by going digital to reach a wider market. Second, implementing multimedia marketing through various platforms such as websites, digital applications, including print and electronic media, whose purpose is to provide information to consumers. Third, provide product guarantees to build consumer trust. Fourth, promote empathy in marketing communications.

During the COVID-19 pandemic, Indonesia’s trade balance has shown good performance. Cumulatively, the trade balance for January-October 2020 reached USD 17.07 billion and is the highest achievement in the last five years. This achievement is partly supported by the increase in Indonesia’s export performance.

The export value in October 2020 reached USD 14.39 billion, an increase of 3.09 % compared to the previous month. Meanwhile, imports reached USD 10.78 billion or decreased by 6.79% compared to the previous month.

The Minister of Trade was encouraged that during this season, micro, small and medium enterprises (MSMEs) have begun marketing their products in a hybrid, namely online and offline. That way, the contribution of the sector to the national economy will be maintained.

Meanwhile, the ministry confirmed that the synergy between agencies encourages the recovery of the export market for creative products. The Minister of Trade emphasised that the cooperation of various parties is needed in encouraging the recovery of the export market for Indonesian creative economy products, especially during the pandemic. To that end, the Ministry of Trade will continue to improve synergy with related agencies and institutions.

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