The Economy Improves, Indonesia’s Smartphone Market Will Grow 8 Percent This Year


During the improving condition of the Indonesian economy, the smartphone market in Indonesia is expected to grow to 44 million units in 2022. This figure grew 8% from the previous year (YoY).

The data is based on the IDC Worldwide Quarterly Mobile Phone Tracker. They said the growth came after a strong recovery in 2021, with shipments of 40.9 million smartphones generating 11% growth.

The first half of 2021 saw strong growth, at 47% compared to 1H20 and 20% compared to 1H19, although the market then slowed down in 2H2.

2021 started with a spike, with annual growth hitting double digits in the first half. This growth was due to the decline in the number of positive cases of Covid-19, plus preparations ahead of Ramadan.

Unfortunately, this growth was immediately halted after the Covid-19 delta variant broke out, forcing the government to re-implement PPKM and causing retail closures in 3Q2

During these conditions, supply continues to run low. Shipments managed to improve by 10% (quarter-on-quarter/QoQ) in 4Q21 as the number of positive Covid-19 cases decreased, PPKM was relaxed, and new products were launched along with twin date promotions during the quarter.

Entering 2022, IDC estimates that the supply of smartphones will gradually increase. Smartphone vendors are predicted to start adding stock before entering the Ramadan period, to prepare for changes in the Domestic Component Level (TKDN), and prepare for an increase in income tax (VAT) which will be implemented starting April 202.

“Although most smartphone vendors have prepared themselves to face the increase in TKDN, there is still uncertainty for their higher-end product lines which may be more tightly regulated. There is a possibility that smartphone distributors will stockpile before the tax is increased from 10% to 11%,” said Vanessa Aurelia, Associate Market Analyst from IDC Indonesia.

Furthermore, Vanessa added, the recent merger between Indosat Ooredoo and Hutchison 3 is expected to accelerate the development of 4G and 5G networks in Indonesia.