Indonesian rupiah slump impacts smartphone prices & sales strategies
The weakening of the Indonesian rupiah against the US dollar has become a significant concern across various sectors, including the smartphone industry. This devaluation might reduce consumer purchasing power and increase smartphone prices. The research division of SEQARA Communications, Reasense, surveyed consumer behaviour in Indonesia, revealing that 78.6% of respondents are apprehensive about the rising prices of smartphones, which has influenced their purchasing decisions.
A recent report titled "Weakening of the Rupiah Exchange Rate and Various Offers: New Smartphones—An Opportunity or A Challenge?" outlines the economic situation. According to Bank Indonesia data, as of June 21, 2024, the rupiah has weakened by approximately 5.67% against the US dollar since the beginning of 2024. This depreciation is the lowest in 20 years and has brought about several challenges and opportunities within the smartphone market.
Aryo Meidianto, a smartphone market analyst and senior consultant at SEQARA Communications provided insights into the potential impacts on the smartphone industry. "Smartphone prices are likely to rise in the next few months, in line with rising import component and logistics costs. To anticipate this situation, the strategy of smartphone vendors is not expected to immediately raise the prices of existing smartphones, but can be seen through some devices that will be launched later, possibly some new devices will look slightly higher priced compared to the specifications offered," said Meidianto. He noted that vendors might introduce higher-priced new devices due to increased component and logistics costs directly influenced by the weakened rupiah.
Despite these challenges, Meidianto suggested there are still market opportunities for smartphone vendors. He explained, "Smartphone vendors still have the opportunity to increase their market share by offering products that are more competitive in terms of price and features considering consumers will currently be more careful in spending money to buy a new smartphone." This implies that vendors capable of offering value-for-money devices might attract cautious consumers even amid economic uncertainty.
The Reasense survey further provided detailed insights into consumer intentions regarding smartphone purchases. While 78.6% are worried about price increases, 44% of respondents indicated plans to buy a new device, 30% opted to continue using their current device, and the remaining 26% did not intend to purchase a new device. The findings suggest that nearly half of the surveyed population remains in the market for new smartphones despite economic concerns.
These findings suggest strategic avenues for smartphone vendors to explore. Enhancing brand image through concerted efforts in public relations and marketing strategies could prove beneficial. The report indicates that while influencers and Key Opinion Leaders (KOL) have been heavily utilised, traditional media can also play a pivotal role in building credibility and public trust. "The 44% respondents who intend to buy a new smartphone could be a stepping stone for a smartphone vendor to continue engaging with loyal consumers, as well as attracting potential new consumers," the report states.
Meidianto emphasised creativity and continuous engagement in vendor strategies. "In dealing with this situation, smartphone vendors need to be more creative in marketing their products. They should not only stop at launching products that seem excessive, but must have a continuous program to offer promotions and discounts that attract consumer interest. Besides, smartphone vendors must target wider market segments by utilising various communication channels, including the media," he concluded.
