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Samsung goes online to lure millennials with new product
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Models display the iris scanner features of the Samsung Electronics Co's Galaxy Note 7 smartphones during its launch event at the company's headquarter in Seoul, South Korea, Thursday, Aug. 11, 2016. (AP/Ahn Young-joon)
S
outh Korea-based electronics giant Samsung Electronics Indonesia (SEIN) is targeting millennials and the emerging middle class with a new product, which also benefits from an e-commerce boom in the country.
The new product, the Samsung Galaxy On 7 smartphone, is now available on eight online marketplaces, namely Lazada, JD, Blibli, Bhinneka, Dino Market, Matahari Mall, Alfa Cart and Klik Indomaret.
Samsung decided to sell the phone exclusively online to cater to the rising number of millennials and middle class consumers. “Online is a very potential marketing channel. Millennials are there, making up 50 percent of online users,” Samsung corporate marketing director Jo Semidang said during the launch in Jakarta on Tuesday.
(Read also: Samsung to fully refund Indonesian customers following Galaxy Note7 recall)
Millennials are defined as people aged between 18 and 34. They have been emerging rapidly, accounting for 41 percent of the 127.6 million-strong Indonesian workforce as of February this year.
Lazada Indonesia director Duri Granziol said the launch of the new phone could pave the way for other smartphone makers to exclusively market their products online.
“I think that’s what all brands are doing right now. If you want to really understand the online channel, you have to launch a specific product so that it’s going to be more tailored to the audience,” he said.
The number of middle class and affluent consumers is set to increase to 141 million people by 2020, up from 88 million in 2014, based on a Boston Consulting Group (BCG) survey. This demographic group possesses at least Rp 50 million (US$3,801) in assets.
As people’s purchasing power grow stronger, the number of online shoppers has also increased
rapidly to 49 million people as of today, compared to 13 million in 2012, according to end-to-end e-commerce service provider aCommerce Solusi Lestari.
However, that only represents a snippet of the country’s 255 million people, meaning there is still a lot of room for e-commerce players to expand their businesses.
Moreover, data from the Indonesian Internet Service Providers Association (APJII) show that Indonesia only has 100 million internet users, up from 55 million in 2011, and market research firm eMarketer also predicted the number of smartphone users will hit 103.6 million in 2017, up from about 61.2 million last year.
“Indonesia is the most promising region in Southeast Asia considering the high growth of its middle class population,” end-to-end e-commerce service provider aCommerce CEO Hadi Kuncoro said.
Meanwhile, Samsung product marketing manager Seto Anggoro said that his company remained confident about the sales of On 7 handset, which is priced at Rp 2.7 million, following the company’s recall of its Galaxy Note 7 last week because of faulty batteries.
“When it comes to consumer confidence, I think that consumers can feel more confident in Samsung because we took very swift action in regards to the Note 7 fiasco. It all comes down to the consumer though, whether or not that confidence stays,” he said.
After the global recall of Samsung’s Galaxy Note 7 smartphones, Samsung’s shares took a devastating dip of 6.3 percent, with its investors wiping out around $14.3 billion from its market capitalization as of Sept. 12. (vps)
— Dylan Amirio contributed to this story
