JAKARTA (TheInsiderStories) - The smartphone and feature phone market in the July-September (Q3) in Indonesia declined 18 percent year on year (Y/Y) and the smartphone segment shrunk by 7 percent (yoy) for the first time since the advent of smartphone in the country, the latest research from Counterpoint Research’s Market Monitor service showed.
Counterpoint Research Director Tom Kang, said the key reasons for the market decline during the quarter were domestic brands clearing off their built-up inventory thus realizing a weaker sell-in, international brands realigning their product roadmap to the local sourcing rules laid down by Indonesia Trade Ministry and a slightly weaker consumer demand.
“However, we see this as a temporary blip in the Indonesia’s smartphone growth story as the market is undergoing correction and brands are aligning to regulatory framework. Thus, the Indonesia market is estimated to bounce back during the ongoing holiday quarter.”
Senior Analyst, Tarun Pathak notes, while most of the operators are currently expanding their 4G network and infrastructure, the demand for 4G smartphones continue to increase.
As a result, the 4G handset shipments continue to grow, shipping more than a million units during the quarter in spite of the overall demand weakening.
He said, Indonesia is a preferred market for the major smartphone brands beyond China & India in the Asia Pacific region, thus, attracting new entrants every quarter. Currently, more than 50 smartphone brands compete in the country, however, ample opportunity beckons for the brands to grow as the overall smartphone penetration is still a third of the total unique mobile phone user base.
The research showed that Samsung reclaimed its pole position in the overall handset market from Evercross with 19 percent market share in the overall handset and 27 percent in the smartphone segment. The growth in smartphone was due to healthy contribution of its mid-tier portfolio led by J-series.
Meanwhile, Evercoss captured second spot in both overall and smartphone segment with a market share of 14 percent and 13 percent. Evercoss’s shipments declined sequentially as the local king was in the process of refreshing its product portfolio and thus looking to scale up beyond the entry level devices moving into the holiday quarter.
Smartfren, another local operator brand, captured fourth spot in the overall handset market and climbed to third spot in smartphone segment with a market share of 6 percent and 10 percent. The operator continues to ramp up its LTE offerings with five devices in its portfolio.
Advan was the fourth largest smartphone player in the country during the quarter capturing 8 percent share due to strong demand for its smartphones in the entry level segment with best sellers like S35H,S4P, S35 and others. It also captured fifth place in overall handset market rankings by capturing 6 percent market share.
Asus captured fifth spot among smartphone players in the country by capturing 7% market share during the quarter. The refreshed Zenfone series remained popular with Zenfone C among the top 3 bestselling models during the quarter.
Market Highlight
The research said that the LTE ecosystem in Indonesia continues to grow with shipments crossing more than a million units for the second successive quarter.
Indonesia government is expected to clear its move on local sourcing by announcing the criteria’s supporting 30 percent local souring.
It said E-commerce contribution in smartphones sales increased during the quarter but is still low compared to that of India and now contributing close to 10 percent of all the smartphone shipments during the quarter. Lazada remains the number one e-commerce channel in the country.
Another interesting feature is the increasing share of Chinese mobile handset vendors in the smartphone segment, which capturing 21 percent of the total smartphone market as compared to 16 percent in previous quarter. Most of the share was captured by brands like Oppo, Lenovo, Xiaomi and Vivo.
Key smaller brands to watch out in coming quarters are Infocus, Wiko, Infinix, Coolpad and Meizu among others which can grab market share from local and other international players with aggressive pricing and attractive device lineup. (*)