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Domestic smartphone market seen to grow 8% in 2022
The latest forecasts show that Indonesia's smartphone market is poised to grow this year toward third-place global dominance by 2025.
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T
he domestic smartphone market is projected to grow 8 percent year-on-year (yoy) this year as supplies improve, according to market research company International Data Corporation (IDC).
In its latest report, the IDC forecast that 2022 smartphone market in Indonesia would reach 44 million units after posting 11 percent growth last year to 40.9 million units, on expectations for gradual improvements in the domestic supply.
The IDC expected local smartphone vendors to start stocking up before the Ramadan fasting month, while preparing for planned changes to the local content requirement (TKDN) and tax increases in April 2022.
“Vendors are largely ready for the increase in the local content requirement, but there are uncertainties regarding their higher-end portfolios, which may be subject to a stricter set of rules,” said IDC Indonesia associate market analyst Vanessa Aurelia.
“Channel players may also stock up before the tax rate is increased from the current 10 to 11 percent,” she added.
Vanessa said the recent merger between Indosat Ooredoo and Hutchison 3 was expected to accelerate the growth of 4G and 5G networks in Indonesia.
Read also: Indosat Ooredoo and Cisco ink deal to bring 5G to Indonesia
Indonesia is set to raise its value-added tax (VAT) from the current rate of 10 percent to 11 percent in April in line with the provisions of the Tax Harmonization Law (UU HPP).
OPPO and Vivo, both owned by China's BBK Electronics Corporation, were the first and third most popular smartphone brands in Indonesia last year, with market shares of respectively 22.3 percent and 16.3 percent. China's Xiaomi ranked second with 18.1 percent, while South Korea's Samsung came fourth with 17.6 percent.
Recording internet connectivity of 64 percent in 2021, the country is likely to have 410 million smartphone users by 2025, the third largest in the world, according to the Indonesia Mobile Ecosystem Report 2019, the inaugural report on the Indonesian market from New York-based Mobile Marketing Association (MMA).
Read also: Indonesia’s mobile ads record highest growth rate in the world
Indonesia’s smartphone market posted double-digit growth in the first half of 2021 as a result of increased activity amid a decline in COVID-19 restrictions and preparations for Ramadan. However, activities quickly ground to a halt with the second wave in mid-2021 driven by the Delta variant, which led the government to impose restrictions that effectively shut down the retail sector and led to tighter supplies in the third quarter.
Smartphone shipments grew 10 percent quarter-on-quarter (qoq) in the fourth quarter as COVID-19 cases were contained, restrictions were eased and vendors released new products simultaneously in “double date” promotions toward the year-end, though still lower than the 13 percent growth in shipments recorded in 2020.
