Aggressive Value
    Category: E-Conomy By : Yessar Rosendar Read : 501 Date : Friday, February 09, 2018 - 11:19:16

    Ahmad Zamroni / Forbes Indonesia

    Xiaomi is one of the rising smartphone brands from China. It currently ranks as the fifth largest global brand for smartphones in terms of volume, and as just started an aggressive strategy in the low-end segment. Last December, it launched the Xiaomi 5A, a low-end smartphone costing only $75, half the price of what others charge. Billionaire Lei Jun, Xiaomi founder, made a rare visit to Indonesia and gave Forbes Indonesia one of a limited number of interviews. For Jun, nothing less than number one is good enough for him. Last year the brand sold 90 million smartphones worldwide and this year it aims to increase that to 100 million units. “This year we aim to sell 10 million Xiaomi smartphones in Indonesia, and in two to three years we can be the number one in Indonesia,” says Jun.

    The Indonesian smartphone market recorded a shipment of 7.2 million units in the third quarter of last year, down 9% from the same period last year, according to researcher IDC. In this flat market, Indonesia consumers are moving to Chinese smartphones, which are now among the bestselling brands. Samsung leads with 30% market share, with Chinese brands Oppo holding 25%, Vivo 8% and Xiaomi 6%, in the third quarter of last year. Locally made brand Advan also holds 8% share.

    In Indonesia, low-end smartphones that sell from $100 to $200 still dominate half of the market with a 47% share, while midrange smartphones between $200 to $400 continued to grow with a 32% share. “We project that the smartphone market will grow another 6% this year. The difference from last year—where first-time smartphone buyers boosted the low-end segment—this year the growth will be supported by the replacement market with people who want to upgrade their phones to accommodate their need for social media, streaming music or videos,” says Risky Febrian, associate market analyst of IDC Indonesia, in an email.

    Xiaomi is still relatively new to the market. It sold its smartphones officially in Indonesia back in 2014 with the Xiaomi Redmi 1S for the low-end segment. Now the brand has quickly has strengthened its presence in Indonesia as it increased its local office staff from only three to 44, and is also building a research center. The government requires a smartphone sold in Indonesia to have 40% local content, or that the brand have a research center here. To help meet the local content regulation, the brand also started to locally assemble its phone. Xiaomi 5A also is the first locally produced smartphone, assembled in collaboration with PT Erajaya Swasembada, PT Sat Nusapersada, and TSM Technologies, after all of them signed an agreement with Xiaomi in February 2017. The assembly itself is done at a Sat Nusapersada facility in Batam within the free trade zone, and in close proximity to Singapore and Malaysia.

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