Indonesia's smartphone market grew by 5% YoY in 2021 to reach its highest ever shipments in a single year, according to Counterpoint Research.
Indonesia’s smartphone market grew by 5% year-on-year (YoY) in 2021 to reach its highest ever shipments in a single year, according to Counterpoint Technology Market Research’s Monthly Indonesia Channel Share Tracker. The growth was due to pent-up demand during the first half of the year, good performance of mid-tier smartphones and 5G adoption driving some of the users to upgrade their devices. The Indonesian economy also started to recover in the second half of 2021 as the restrictions and lockdowns were relaxed, triggering a rebound in the demand for mobile phones.
“Brands like OPPO brought bundled offers and campaigns like Joy-Full, which provided benefits and after-sales promos. There were also strategic partnerships between major OEMs and e-commerce players, like between vivo and JD.com. Had it not been for the component shortages during the second half, the growth would have been even higher. To meet the challenge, brands focused on their mid-tier portfolios and increased the selling price in some cases to pass on the increased cost to the end consumer,” Research Analyst Tanvi Sharma said.
The online portion of total shipments accounted for 18% in 2021. There was an online push in the country by major brands during shopping festivals such as 10.10, 11.11 and Harbolnas 12.12. In addition to providing attractive deals, campaigns were also held to support micro, small and medium enterprises (MSMEs) in developing businesses in the digital realm. However, offline retail continued to dominate the shipments. Erajaya, the country’s biggest distributor, opened 38 outlets simultaneously to expand its coverage area.
5G smartphone shipments took an 11% market share in 2021, compared to just 1% in 2020. With the commercial rollout of 5G services in the country, 5G handsets are gaining popularity. It is expected that the initial use cases such as enhanced mobile broadband (eMbb) and fixed wireless access (FWA) will enrich the internet experience of consumers, contributing to faster adoption of the technology. To drive further expansion of 5G, communication service providers are expected to form strategic alliances with other ecosystem players to bring innovative services to attract consumers.
In 2022, we will see tough competition for the top spot. The ASP (average selling price) for 5G smartphones will continue to see a slow decrease. Mid-tier smartphones are most likely to witness increased demand this year thanks to a continued focus on digital transformation and 5G network expansion. We are estimating a mid-single-digit growth rate in 2022.