Investment by a series of Chinese vendors has resulted in strong growth in the Indonesian smartphone market. Chinese smartphone manufacturers have expanded sharply in the region in the last twelve months, but that strategy resulted in dramatic decline in market share for local manufacturers.

Figures disclosed from the Indonesian smartphone market clearly indicate a strong growth in Q1, with Chinese firms boosting its market share from 23% to 31%. However, in contrast local smartphone manufacturers have seen their market share decrease from 20% to 17% according to a report conducted by IDC. Whilst, just two years ago, local Indonesian vendors had a 34% share of the smartphone market.

The IDC disclosed that smartphone shipments during the quarter increased by 13% to 7.3 million units. In addition to this, it was revealed that the top-five vendors in Indonesia were Samsung, Lenovo, Oppo, Asus and Advan.

Market analyst at IDC, Risky Febrian, has claimed that aggressive strategic marketing policies by Chinese vendors in the Indonesian market has left local vendors now struggling to compete, with Chinese vendors likely to continue its aggressive approach to the market. The IDC analyst said, “The smartphone market in Indonesia has changed with the China-based vendors becoming more aggressive with their strategies, not just with their product line-up, but also their overall marketing plans and activities. Their cash-rich initiatives have left local vendors struggling to compete in the market space with their limited resources.”

Other industry commentators have suggested that Samsung has also tailored its strategy in order to help it fend off increased competition in an attempt to maintain its market leadership in the region. The IDC has attributed the success of China-based vendors down to its pricing strategy, claiming it’s positioned well in the mid-range segment with most of its handset retailing at between $200-$400.Local vendors tried to counteract this but were unsuccessful due to a distinct lack of brand equity, which forced them to sell its devices for $200.

However, this did not dampen the local vendors’ attempt to gain back share as they try to provide more value-added services, with Advan developing its own Android user interface variant called IdOS.

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