Indonesia often falls into the long shadow cast by other developing markets – Brazil, Russia, India and China – also known as the BRIC countries. But with the fourth largest population in the world, Indonesia is growing rapidly, as evidenced by the growth in smartphones.
The digital picture
Several factors have come together to create a ‘perfect storm’ driving the move to digital in Indonesia. Almost half of the population is under 30, there’s been a rapid rise in the emerging middle class and there is a strong cultural desire to be part of a community. These factors have created a new and dynamic class of digital consumers who are using their connected devices not just to work and play, but also to make life easier.
Smartphones are a key part of the evolution. Although internet usage is in its infancy, communication and information gathering are popular. As in other markets, social media is one of the main online activities, reflecting the social nature of the country’s culture. Facebook, Blackberry Messenger and Twitter are becoming accepted ways for people to communicate with each other.
With this move to digital, it may be no surprise that Indonesia is one of the fastest growing smartphone markets in the world. Sales increased seven fold in the past five years, with more than 50 million devices purchased in 2013/2014. In fact, smartphones accounted for 53% of all devices sold in 2014, up 17 percentage points from the year before. With internet penetration currently at 56%*, the increasing number of smartphones means more Indonesians will have access to the web. This year 40 million more people will be connected this way. As this connectivity becomes more sophisticated, it offers a great opportunity for app developers and manufacturers in particular. So it’s a good time to get to know the country’s smartphone users.
Some key facts about the Indonesia smartphone market:
Handsets in transition
The market has gone through a handset transition in the past five years. In terms of operating systems, Android has experienced rapid growth since 2011. In 2011, market penetration for Android stood at 24%, but by the end of 2014 that had grown significantly to 88%. This means the number of Android devices sold each year since 2011 has doubled annually.
Almost two thirds (68%) of smartphone sales in Indonesia are dual SIM card, allowing users to manage two phone numbers from one device. Since 29% of smartphones sold in Indonesia have a 4” screen, there is an emerging opportunity for these larger screens that offer users a more enjoyable viewing experience on their handset.
With five million more people every year entering the urban consumer class, there are even more ways for brands to connect with consumers. A particular gap in the Indonesian market is mobile commerce.
We know from our work on the purchase journey in other markets that mobile plays an important part in researching, considering, purchasing and providing feedback all sorts of items, from clothing to airline tickets. As more Indonesians are connected to retailers via their smartphones, it will be important for brands to deliver a consistent service to maintain loyalty and grow their business. Delivering an excellent experience and engaging with people in the right way throughout their journey will be the key to success.
For more information contact GfK Digital Market Intelligence
*GfK Point of Sales Tracking data 2014