All I hear is “Ka-Ching!”.
Ka-Ching!
Ka-Ching!
Ka-Ching!
Ka-Ching!
Ka-Ching!
If you have taken a good walk down the street of any typical Indonesian city, you’ve probably met that old man who sells some meatballs on his cart, that janitor who was pushing you to buy some of his pre-paid phone vouchers, or that beggar down the street who held his hands out to passers by, asking for some spare change. As you ordered some meatballs, as you were haggling the price of that janitor’s phone vouchers, or when you were about to hand out Rp 1,000 to that street panhandler, you heard a ringtone coming out of nowhere. It was then that you realize who it belongs to as that meatball old man, that janitor or that beggar took out his cell phone and began chatting away.
While statistics on average Indonesian income probably indicate that things like cell phones shouldn’t be popular in the country, such conclusion couldn’t be further from the truth. In May this year alone, 3.1 million units of cell phones are sold in the country, 25% of which are smartphones. And get this, the sales of smartphones in Indonesia outstripped global averages, with a very high growth rate. Sales of branded smartphones throughout 2010 is 65% higher than the previous year. While manufacturer Research in Motion (RIM), is struggling hard to make inroads into the rest of the Asia-Pacific market, here in Indonesia, it is making a killing having sold some 1.2 million units of BlackBerries by 2010, a mere 5 years after it first entered the Indonesian market.
And let’s not forget the many millions more of cheap, Chinese knockoffs, “ChinaBerries”, being bought by the millions of lower-income Indonesians every single year. Phone retailers in Jakarta estimate that for every BlackBerry they sold, they sell at least 10 ChinaBerries. One Hong Kong-based company that sells ChinaBerries, eTouch, noted that they managed to sell 22 million units of cell phones to Indonesians in 2010 alone, raking in some US$2.7 Billion. And they expect sales to increase to at least 29 million units for FY2011. The reason behind this success is, of course, price. While a legitimate Berry can cost around US$500, a ChinaBerry can go for under US$100. Still, for many Indonesians, only the real thing will do. This is especially true for the Indonesian business class, where a swelling thumb and a BlackBerry by your side has become status symbol of success. And that’s the essence of what cell phones had become in this archipelagic nation, not merely a necessity, but a status symbol and a lifestyle.
The growth of the smartphone market has plenty to do with the explosion of online social networking in the country. From foreign Social networking sites such as Facebook and Twitter, to Indonesian forums such as Kaskus, the popularity of cell phones, especially smartphones, can be argued to be closely intertwined with the growing popularity of such networks. We can probably say that it is these Social Networking sites that drive the Indonesian cell phone market, or perhaps there’s just something about Indonesian love of socializing that made the popularity of online social networking and its physical mediums, cell phones, an inevitability.
To give a good example of the huge and glaring growth in online social networking in Indonesia, let’s take a look at the Facebook case. While Facebook does not have any branch office in Indonesia, Indonesia is its biggest market in all of Asia. In July 2008, a mere 209,000 Indonesians were registered as Facebook users. In 2009, Indonesia became Facebook’s 4th largest market, with 14.6 million users, registering a 1,500% growth over the previous year. By April 2010, Indonesia became Facebook’s 3rd largest market, and its second-largest after the United States, by year’s end. And this was still at roughly 14% penetration, a total of 35 million users. Indonesia now adds roughly 2.4 million new users every single month and this is in keeping with the number of units of smartphones being sold in the country, branded or pirates.
One more reason behind the popularity of smartphones in Indonesia is something we don’t actually like to point out, the poor telecommunications infrastructure in the country. Broadband connection in Indonesia is both slow and expensive, negating the need for desktop computers and laptops for personal use since websites that are better accessed through desktop and laptop computers are also heavy on the bandwidth (ie. Youtube) and thus unusable. Emails and social networking can be sufficiently done with a smartphone, connected through pre-paid plans such as those offered by OperaMini, a mobile internet provider. According to a report by Business Monitor International, Indonesia has more than 200 million mobile subscribers. Of course, this is not to say there are really 200 million people with access to mobile internet. It’s just than when even housemaids and lorry drivers can own 2-3 cell phones, 200 million mobile internet subscriptions is within “normal” range. Alas, the lucrative telecommunications market in Indonesia should have anyone salivating with eyes blinded by green as all he can hear is “Ka-Ching!”