Pictured is Grand Indonesia Shopping Mall in Jakarta on Friday, January 5, 2024.
Bloomberg | Bloomberg | Getty Images
BEIJING – Huawei spinoff Honor on Tuesday announced plans to start selling smartphones in Indonesia by the end of March, making it the latest to enter a market that has banned Apple’s iPhone 16 due to domestic production requirements. Becomes a Chinese company.
In Indonesia, it is mandatory for smartphones sold in the country to have 40% of their parts procured domestically. The rules prevent Apple from selling its latest phones in a market where it is reportedly negotiating a $1 billion investment.
Honor has an office in Indonesia and is working with one local manufacturing partner, Justin Li, president of the Chinese company’s South Pacific operations, told reporters last week. He said the foldable mobile phone will be one of Honor’s first set of products for domestic sale, with 10 items belonging to the mid-range to luxury segment.
The company aims to offer around 30 products, ranging from mobile phones to tablets, in Indonesia by the end of the year. This Southeast Asian country is the fourth most populous country in the world after the United States.
“While 80% of the market is made up of sub-$200 devices, Indonesia, Southeast Asia’s largest and fastest-growing economy, has a long-term outlook,” Canalys analyst Chiew Le Xuan said in an email. “There is tremendous potential for growth.”
“Indonesia is emerging as a major market in Southeast Asia due to its rapid economic growth and expanding middle class,” Chiew said, adding that the country accounts for 35% of the region’s smartphone shipments and is a strategic player in the region. He pointed out that it can function as a hub.
According to Canalys, as of November, Oppo, Xiaomi, and Transsion, all based in China, were the top three in Indonesia in terms of smartphone shipments. In November, Shenzhen-based Oppo held a global launch event for its flagship mobile phone, the Find X8, in Indonesia, where the company also has a factory.
According to Canalys data, Samsung ranks fourth in Indonesia with a 16% market share, tied with fellow Chinese brand Vivo.
Excluding China and Japan, just under 8% of Apple’s revenue comes from the Asia-Pacific region.
Lee maintained that the decision to enter Indonesia was unrelated to Apple’s presence in the country and that he was confident in Honor’s ability to compete. He said Honor had been observing the Indonesian market for years before redoubling its expansion efforts in the past six months.
Although he did not provide a breakdown of the current number of Indonesian and Chinese staff, Lee said that Honor is currently hiring domestically and aims to hire mainly local staff in the future. He said that
In addition to selling at local retailers, Honor plans to open at least 10 of its own stores in Indonesia this year, Lee said.
Outside of China, Honor is mainly sold in parts of Europe and Southeast Asia. The company’s phones are not sold directly in the U.S. In December, the company claimed for the first time that more than half of its sales came from outside China.
Honor, which plans to go public, was spun off from Chinese telecommunications giant Huawei in November 2020 after its parent company was hit with U.S. sanctions. Huawei said it does not own any shares in Honor or participate in its management decisions.
