TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Phone retailers defy gloomy outlook

While consumers are becoming more concerned about their financial circumstances and spending outlook, phone retailers in the country are still optimistic that their sales will improve in the second half of this year

Khoirul Amin (The Jakarta Post)
Tue, August 18, 2015

Share This Article

Change Size

Phone retailers defy gloomy outlook

While consumers are becoming more concerned about their financial circumstances and spending outlook, phone retailers in the country are still optimistic that their sales will improve in the second half of this year.

'€œThere'€™s indeed a decline in consumer purchasing power amid the current economic downturn, but we nevertheless believe that people will still buy [smartphones],'€ said Semuel Kurniawan, the corporate secretary of phone and cellular voucher distributor Tiphone Mobile Indonesia.

Although people might hold back from upgrading their old phones to new ones, there was still a market for first smartphone users, he told The Jakarta Post.

A recent study published by market research firm Nielsen, the Nielsen Global Survey of Consumer Confidence and Spending Intentions, has revealed that Indonesian consumers are getting more concerned about the future of their personal finances and spending outlook.

The study was conducted between May 11 and 29 by polling more than 30,000 Internet users worldwide, with 523 people coming from Indonesia.

According to the study, consumers have cut their household spending, with 50 percent of them choosing to delay upgrading their gadgets and 48 percent spending less on new clothes.

The study has also revealed that 37 percent of respondents have become more concerned about the country'€™s economic performance, up from 33 percent during a similar study conducted in the first quarter of this year.

Hasan Aula, the CEO of phone retailer Erajaya Swasembada, said that he was optimistic that sales of gadgets would still grow as the decline in sales of certain phone products would usually be offset by rising sales in lower-price segments.

'€œIn the first half, for example, we saw growing sales of mid-range phones Lenovo and Xiaomi,'€ he said.

Erajaya, which is listed on the Indonesia Stock Exchange (IDX) as ERAA, saw its net revenue grow by 28.97 percent to Rp 8.68 trillion (US$626.04 million) in the first six months of this year from Rp 6.73 trillion in the same period last year.

Leading the retail phone industry in the country, Tiphone netted a 43.7 percent increase year-on-year (yoy) in its net revenues to Rp 9.07 trillion in the first half of this year from Rp 6.31 trillion. This stellar performance was largely due to its cellular voucher business.

The company, which is listed on the bourse as TELE, successfully booked a 19.4 percent yoy increase in its net profit to Rp 182.52 billion in the first half of this year.

Both firms have implied that their businesses would still grow in the second half of the year despite the slow recovery in economic growth.

Erajaya has achieved more than half of its annual target of Rp 15 trillion in the first half of this year, so it would likely be easier in the second half, said Erajaya'€™s Hasan.

Erajaya, which runs gadget retailer Erafone, currently has over 520 retail outlets nationwide selling 13 top smartphone brands.

While refusing to disclose specific growth targets this year, Tiphone'€™s Semuel said that his firm would remain strong this year as a result of strong sales growth of cellular vouchers, which has made up more than half of its revenue.

Tiphone exclusively markets cellular vouchers of Telekomunikasi Selular Indonesia (Telkomsel), the 'ۥcellular arm of state-owned telecommunications giant Telekomunikasi Indonesia (Telkom)'ۥ after a 24.94 percent stake was acquired by Telkom last year.

Meanwhile, phone retailer Trikomsel Oke may see a bleaker outlook in the second half compared to its peers as it booked a 32.12 percent drop in its net revenue to Rp 3.93 trillion in the first half of this year from Rp 5.79 trillion during the same period last year.

The firm saw its net profit slump by 42.42 percent yoy to Rp 120.85 billion in the first half of this year.


{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.