The opportunities of Indonesia’s Electronics Industry.
Nowadays, electronics have dominated our life like perhaps nothing else. And a lot of electronic industry companies has to do with the advancements in technology made in the last several decades which have literally completely changed the industry and our lives, without any exaggeration at all.
Together, these electronics companies have over USD 950 billion in revenue, over a trillion dollars in assets, and provide direct employment to nearly 3 million people. We have used revenues, profits, assets, and employees and given higher weightage to the latter two metrics, to calculate our rankings. The data has been taken by the Fortune 500 Global List for 2020.
The electronics industry was only established in the 20th century and has grown exponentially over the last few decades. It is also by far one of the biggest industries in the world at a global level. The big electronics companies include LG Electronics, Samsung Electronics, Pegatron, and Toshiba.
In Indonesia, all these companies are considered successful in entering the Indonesian market. Although competing with local electronics services, the development of electronics services from outside the country remains a favorite in Indonesia.
Which outside electronics service brands has successfully expanded their market in Indonesia? What is the outlook for the Electronics industry in Indonesia? Read this article to know more!
The Overview of Electronics Industries Development in Indonesia
The Indonesian Ministry of Industry noted that the overall export value of electronic and telematics products reached USD 7,8 billion during 2019. The 10 main destination countries were Singapore, the United States, Japan, Germany, Vietnam, Hong Kong, Malaysia, China, Thailand, and The Philippines.
Consumer electronics in Indonesia had been significantly impacted by the pandemic in 2020 due to supply constraints and consumers prioritizing their expenditure in terms of essential needs. The electronics industry of Indonesia has been experiencing a period of rapid growth.
According to the Indonesian Electronics Producers Association (Gabel), domestic sales of electronic products typically increase by around 11% every year. In Indonesia, the electronics industry includes various subsectors from semiconductors to consumer electronics.
In 2018, the gross value added from the electronics manufacturing industry in Indonesia amounted to approximately USD 3,95 billion, accounting for a slight increase compared to the previous year. The growth of electronics production in Indonesia is not only connected to growth in demand for consumer electronics but also to the increasing number of electronic applications for manufacturing production and processing of information.
The export of electronic products is one of the main Indonesian export products which could give a positive contribution to Indonesia’s international trade. There are more than 10 electronics services that provide manufacturing in Indonesia.
Some are from abroad, some are from within Indonesia itself. However, of all the electronics companies, there are 4 famous electronics brands in Indonesia. The 4 brands are LG Electronics, Samsung Electronics, Pegatron, and Toshiba. 3 of the 4 electronics services are from abroad which will be discussed further below:
Samsung Electronics is the second-largest electronics company in the world with a revenue of USD 221.6 billion generated last year. Samsung is a South Korean multinational electronics company headquartered in South Korea and best known as one of the world’s largest electronics manufacturers of consumer electronics and semiconductors.
Samsung is also the world’s largest manufacturer of mobile phones and smartphones, known for its flagship Samsung Galaxy product line of smartphones. According to data from the financial statement of Samsung Electronics Indonesia, assets are generating USD 1,317,92 million with its Indonesian manufacturing segment in 2017
South Korean multinational electronics company headquartered in Yeouido-dong, Seoul, South Korea, a division under LG Corporation. LG Electronics is the world’s second-largest LCD television manufacturer. In 2019, LG Electronics brought in annual revenues of USD 54,39 billion.
It has a total of 120 subsidies with 100,000 employees working in its companies. LG was founded in 1958 with its headquarters in Seoul, South Korea. According to data from the financial statement of LG Electronics Indonesia, sales are generating USD 1,284,44 million with its Indonesian manufacturing segment in 2020.
Toshiba Corporation is a Japanese multinational electronics company founded in 1939 as Tokyo Shibaura Denki K.K. The company had sales of approximately USD 65 billion in 2017. Toshiba is the fifth-largest company in the world in the manufacture of PCs and the 7th largest semiconductor vendor in the world.
Its headquarters are in Minato, Tokyo, Japan. Its products are grouped into 4 categories as digital products, electronic devices, home appliances, and social infrastructure. According to data from the financial statement of Toshiba, Indonesia sales are generating USD 313,605 million in Southeast Asia with its Indonesian manufacturing segment in 2019.
The Future Prospects of Electronics Industries in Indonesia
When discussing the electronics industry in Indonesia, it is very important to note the shift of electronics manufacturing from Japan, Taiwan, South Korea, and Singapore to four countries in Southeast Asia of which one is Indonesia. The important factor supporting the increase of Indonesia’s electronic exports in the world is the decrease of international tariffs which have been imposed on Indonesian electronics products.
Televisions contribute most to total electronics sales in Indonesia. They account for around a third of the market. They are followed by refrigerators and other large electrical appliances such as air conditioners and washing machines.
Market penetration for electronics and household appliances is still relatively low in many areas of the country, but the ongoing expansion of retail outlets which specifically sell electronic goods all over Indonesia has made the future growth of the industry likely.
Enter The Indonesian Electronics Market with BRIGHT Indonesia
Due to the high number of electronics service users in Indonesia, Indonesia certainly has a large electronics market potential. So, to enter the Indonesian market, you need the right local partner to assist you.
Indonesia is an ideal business partner for you. We will assist you on the ground, including virtual assistants during the mission, logistical planning, and detailed communication. It can cause your company to focus on developing partnership cooperation rather than the hassles of the business trip.
BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:
- Assist you in expanding and developing your business by identification of potential partners.
- Secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arranging business meetings, and acting as a liaison.
- Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
- Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.
For more information, email email@example.com.