Domestic Consumption, Smartphones and Social Media in Indonesia

According to data from Mediacells, Indonesia is positioned within the top ten of the world's smartphone market based on sales volume. Smartphone sales in Indonesia are predicted to reach 46 million in 2014. About 39.8 million of these sales involve new smartphones.

One of the reasons that explain Indonesia’s high smartphone sales is that the smartphone is no longer a luxury item that can only be afforded by the upper-middle class and elite circles. Due to the influx of various smartphone brands on the Indonesian market, and which cover a whole range of prices, many Indonesians can now afford a smartphone. Local mobile phone brands are more encouraged to compete with international brands, offering high-tech smartphone products at a cheaper price.

The introduction of the smartphone caused that Indonesians are no longer using the mobile phone simply as a device to send a SMS message or to make a phone call. Communication through a variety of social networks has become increasingly popular. Facebook, for example, said that the number of users in Indonesia has reached tens of millions of people. At end-2013, the number of monthly registered active users (meaning that they open Facebook at least once per month) stood at 65 million, while the number of daily active users was 33 million. This makes Indonesia the fourth largest Facebook community after the United States, India and Brazil. Interestingly, 86 percent of all Indonesian Facebook users use a mobile device to access their account.

Due to the Indonesia's great potential - as 80 percent of the population is still not connected to the Internet - Facebook intends to strengthen its business in this country. Facebook has set up a representative office in Indonesia’s capital city of Jakarta with the aim to establish better communication with a number of sides, including the country's small, medium and large businesses. Particularly the small and mid-sized enterprises are increasingly using Facebook as a tool to market their products. Facebook also aims to build a good relationship with the Indonesian government. This is evidenced by the meeting between officials of Facebook and the Vice Governor of Jakarta at City Hall on 20 March 2014.

But not only Facebook is targeting for business expansion in Indonesia. South Korean-based mobile applications and mobile social messaging platform KakaoTalk has the same ambition. The management of KakaoTalk said that Indonesia is its second-largest market, after South Korea. In 2013, the number of Indonesians that use this new application was only 500 thousand people. However, around the end of February 2014, the number has reached 16 million. A growth of about 3,000 percent. Therefore, KakaoTalk wants to provide the best services to its Indonesian fan base. For example, it wants to apply a specific technology in order to provide fast delivery of messages despite the current 2G or EDGE network conditions.

Line, a chat application from Japan, also expressed optimism on their business in Indonesia. Based on information from Line published on the website techinasia.com (dated early February), the number of Line users in Indonesia has exceeded 20 million people (and approximately 350 million users globally). After Japan (50 million users) and Thailand (22 million), Indonesia comes third.

Regarding the more professional social application of LinkedIn, the Asia-Pacific region (including Indonesia) contributed significantly to its growing number of users. Based on information from LinkedIn in mid-February, the number of users has reached 50 million in the Asia-Pacific region. There are nine countries in the Asia-Pacific region that have more than one million LinkedIn users. These are India (over 24 million), Australia (over 5 million), China (over 4 million), Indonesia and the Philippines (each more than 2 million). Meanwhile Japan, Singapore, Malaysia, and New Zealand all have more than one million users. The fact that Indonesia has more LinkedIn users than Singapore (a much more developed country), is a clear sign that Indonesian people continue to show and develop their existence in cyberspace, both informally and professionally. It also happens more frequently that job applications are conducted through LinkedIn. It is certainly handy for those who are looking for employees, because through LinkedIn, a record of experience and educational background of job seekers can be read.

Seeing the current trends of Indonesian society in relation to the active use of social networks, many companies are trying to tap this market in order to generate profit. Besides communication, social networking can also be used for promotion, sales, and even for politics.

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