Premium smartphones to raise distribution, retail sales

Mobile phone distributors say the sales of premium smartphones will take the sting out of tighter import regulations that lengthen the time it takes for devices to reach the market.

Evy Soenarjo, president director of PT Global Teleshop (GLOB), said the launch of premium smartphones, including the BlackBerry Z10 and Samsung Galaxy S4, would stimulate the mobile phone market.

'€œWe are aiming to grow revenue by 15 percent this year, in line with this double digit growth the industry would experience,'€ she said.

In the first quarter of the year, the mobile phone distributor and retailer already recorded a 20 percent year-on-year gain in net sales by bringing home Rp 818.1 billion (US$84.24 million).

Operating profit rose 59.4 percent to Rp 75.22 billion while profit for the year increased 77.5 percent to
Rp 47.6 billion although the company spent 20.8 percent more '€” equivalent to Rp 722.8 billion '€” in expenses.

To tap the market demand for smartphones and tablets '€” devices that Global Teleshop focus on '€” the company plans to open around 50 new retail outlets by the end of the year.

According to Evy, the company prepared $2 million for this year'€™s capital expenditure.

'€œAs of April, we are operating through 325 retail outlets. We have opened around 10 outlets so far,'€ she said, adding that each outlet required a minimum investment of $30,000.

She added that the company was redesigning their super-store concept. It currently runs 12 super-stores but future versions would infuse in-store entertainment because consumers saw smartphones as a lifestyle item.

'€œSmartphone and tablets contributed 50 percent to revenues yielded by our mobile phone sales,'€ she said.

As of the first quarter, mobile phone sales reached Rp 277.2 billion, or 34 percent of net sales, while computer and notebook sales produced Rp 13.8 billion. The sales of SIM cards and top up vouchers remained as the main business driver and brought in Rp 512 billion, equivalent to 62.5 percent of net sales.

Meanwhile, PT Erajaya Swasembada (ERAA), went through a rough first quarter, which involved seeing their office inundated during the January flood season.

Djatmiko Wardoyo, Erajaya Swasembada spokesman, said the flood, which lasted a week, crippled the company'€™s distribution activities for over one month. He added that imported mobile phones were held up at the port in the first quarter due to the implementation of new regulations concerning imported devices. The regulation, which was supposed to come into effect in January, only hit full swing in March.

Under the regulation, a single company may not act as an importer, distributor and retailer at once. As a result, many had to restructure their companies. As a result of the complications, Erajaya'€™s net sales dipped 7.5 percent year-on-year to Rp 2.93 trillion in the first quarter while comprehensive income slid 5.2 percent to Rp 75.5 billion.

However, Djatmiko said the company expected performance to get back on track.

'€œA star line up of smartphones, including the upcoming BlackBerry Q10 and Samsung Galaxy Note 8.0, will enter the market and excite sales in the second quarter and onwards,'€ he said.