Indonesia's Electronics Industry Plagued by Weak Purchasing Power
Although a modest improvement is detected in the second half of 2017, Indonesian electronics manufacturers say that bleak consumer purchasing power poses a major challenge and therefore urge the government to implement policies that would strengthen purchasing power in Southeast Asia's largest economy.
Andry Adi Utomo, Senior General Manager Sales & Marketing at Sharp Electronics Indonesia (Sharp Indonesia), said bleak consumer purchasing power is a big issue for most industries in Indonesia, including the electronics manufacturing industry. Sharp Indonesia is one of the companies that is negatively affected by this context.
Besides urging the central government to implement measures that would improve Indonesia's purchasing power, Utomo also urges the government to offer incentives to national electronics manufacturers, such as a tax holiday, because several of these electronics companies have invested heavily in recent years in business expansion (hence generating more jobs in society).
In the first half of 2017 Sharp Indonesia saw its sales decline by 5 percent year-on-year (y/y). Utomo detected a slight improvement so far in the second half of the year and therefore remains optimistic that full-year 2017 sales growth can match last year's growth pace. Overall, Utomo emphasizes that Indonesia's electronics industry needs a significant recovery in people's purchasing power to become a thriving industry again.
Currently, washing machines are the best sold item for Sharp Indonesia, while sales of LED televisions are declining. The home appliances segment contributes 60 - 70 percent to total sales.
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