Date
20 September 2017
Lenovo aims to challenge global biggies like Samsung in the Indonesia smartphone market.
Lenovo aims to challenge global biggies like Samsung in the Indonesia smartphone market.

INTERVIEW: Lenovo to double Indonesia smartphone outlets

Lenovo Group Ltd. (00992.HK) plans to more than double its sales outlets for smartphones in Indonesia in a year to capitalize on the Southeast Asian nation’s growing ranks of middle-class consumers.

The world’s No. 1 personal-computer maker, which also produces tablets and mobile phones, secured a double-digit share in Indonesia’s smartphone market as of end-September after the first launch in 2012. It aims to expand its coverage to 4,500 points-of-sale from about 2,000 currently, Koh Kong-meng, vice president and general manager for East Asia, told the Hong Kong Economic Journal’s EJ Insight.

“From the fourth quarter of 2012 until now, we have expanded within Indonesia from zero to more than 2000 stores across the country,” Koh said in an interview. “We should be able to double that again in another four quarters.”

Lenovo’s ambition deals a direct challenge to the bigger brands of Samsung and BlackBerry in the country, where the Chinese company is already in the top spot for PCs with a 10 percent share. Indonesia has a 247 million-strong population, the largest among the ASEAN bloc.

Koh names Indonesia as Lenovo’s top emerging East Asian market, followed by Thailand, the Philippines and Vietnam. Myanmar is a newly opened economy that also draws its attention.

“GDPs are growing across Southeast Asia. More and more people are able to afford more and more devices,” he said. “An important factor is that it’s a very young market; the majority of the population is under 30 in all these countries.”

According to PricewaterhouseCoopers Ltd. (PwC), gross domestic product (GDP) per capita in Indonesia may reach US$4,560 in 2015, more than double the US$2,250 in 2009. The gauge of a country’s output, also the broad measure of average living standards, may rise to US$5,860 in 2017.

“The middle class is growing strongly, probably around 40 million people,” said Cliff Rees, PwC executive director for financial advisory services in Indonesia. “It doubled in size over the last 10 years. I expect it to double again over the next 10 years or so.”

Rees cited a recent PwC survey as showing that 20 percent of global chief executive officers put Indonesia as top priority in foreign investment across the world.

Beyond PCs

Worldwide smartphone shipments are forecast to grow 40 percent year on year to more than 1 billion units this year, thanks to “a growing array of sub-$200 smartphones,” research house IDC said in a Sept. 4 report. Shipments may reach 1.7 billion units in 2017, according to the Massachusetts-based company.

“As we continue to build our brand in emerging markets like Indonesia, we are also aware of the fact that it’s not just about PCs,” Koh said. “We also want to expand into more personal devices like phones and tablets.”

In the second quarter, Lenovo was the world’s No. 3 smartphone vendor with 11.3 million shipments, lagging Samsung Electronics Co. Ltd.’s 75.6 million units and Apple Inc.’s 31.2 million, according to research firm Canalys.

The company only sells smartphones in selected markets outside China, such as Indonesia, Philippines and Vietnam, where it rolled out mainly entry-level products priced at the low end. It wasn’t until early this month that Lenovo unveiled plans to launch four handsets in Hong Kong.

The company will seek to grow its smartphone business “organically”, Koh said, even as speculation persisted that the PC giant was considering a bid for Canadian handset maker BlackBerry. Blackberry announced on Nov. 4 that it has dropped a plan to sell itself to its biggest shareholder, Fairfax Financial Holdings Ltd.

– Contact the reporter at [email protected]

RC

EJ Insight reporter

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