In March 2018, the staid stupas of Borobudur, a Buddhist temple in Central Java, Indonesia, transformed into a lively concert venue. A trio of singers performed national pop hits in front of a packed crowd; two famous actors staged scenes from the popular Indonesian web series Perfect Love. Broadcast by a dozen national television stations to millions of Indonesians across the country, the event was not a celebration of a religious festival, but the launch of a new Chinese smartphone: the Vivo V9.
Vivo’s glitzy launch party was only one of the many ways in which Chinese smartphone companies have won over the hearts and wallets of Indonesian consumers in recent years. Once viewed by many Indonesians as low-quality knockoffs, Chinese smartphones now occupy almost 70% of the country’s smartphone market. Not only is Indonesia the fourth-largest smartphone market in the world, it is also where people spend the most time on their phones: an average of 5.5 hours per day. China’s Oppo leads with a 21% share of the Indonesian market, followed by Vivo, Xiaomi, and Realme. Meanwhile, Apple — despite its sleek designs and global prestige — has never cracked the top five.
The Chinese companies’ dominance of Indonesia’s smartphone market can be explained by three key strategies: low prices, localized marketing, and investing in local communities by creating jobs and providing disaster relief.
Chinese smartphones are much more affordable than their Western counterparts, their prices kept low through low profit margins for each smartphone sold. Vivo, Realme, and Xiaomi dominate the market for low-end devices that cost less than $200, and Oppo leads in mid-range models between $200 and $400. Meanwhile, competitors like Samsung and Apple remain prohibitively expensive for much of the population — both the Samsung Galaxy S22 Ultra and the iPhone 13 Max cost over half of the median salary in the country. Many Indonesians view iPhones as a luxury, like “owning a Porsche.” One satirical video that went viral on social media joked someone had sold their kidney to buy one.
Additionally, following the Chinese idiom yindizhiyi (“to act according to local conditions”), Chinese smartphone companies in Indonesia have tailored their products and marketing to meet the needs of the local consumer base. Just as Shenzhen-based Transsion dominated Africa’s smartphone market through a strategy of “glocalization” — creating products that will sell universally but can also be customized to specific markets or regions — Vivo too has pursued a strategy of “More Local, More Global” in Indonesia. To reach the country’s majority Muslim population, for example, Vivo released a special Ramadan-edition phone. And given the prevalence of motorcycle transportation, it developed a “motorcycle mode” for Indonesian users that allowed them to mute notifications and reject incoming calls.
Chinese smartphone companies are also active on Instagram, which is crucial since Indonesia is the platform’s largest market in Asia. A scroll through the 1.3 million followers on Oppo Indonesia’s account reveals many of the key players in Indonesian pop culture and entertainment — from Nikita Willy-Indra, often called the “queen of Indonesian soap operas,” to chart-topping singer Cinta Laura. Both act as brand ambassadors for the company in a country where celebrity ambassadors wield significant influence: 75% of young people said they had purchased Oppo smartphones because of a celebrity endorsement, according to a survey conducted in the eastern city of Malang.
Chinese smartphone makers have also invested resources in local communities. They have created jobs for Indonesia’s fast-growing workforce, provided disaster relief, and complied with the local content requirement — a government regulation that needs 4G mobile phone sellers to produce 20% of all device components domestically. While Apple has struggled to comply with this requirement, Oppo and Vivo continued to meet it, even after it was increased to 30%. In a bid to cultivate goodwill among Indonesians, Oppo has opted to hire more locals, partnering with high schools and vocational schools to recruit employees. The company has also provided prayer rooms for Muslim employees at its headquarters and factories. According to Oppo, 35% of the workforce in its new Tangerang factory is local.
Humanitarian aid is another component of this strategy. After an earthquake and tsunami struck the island of Sulawesi in 2018, Vivo donated 4 billion rupiah ($270,000) to construct shelters for the victims. Oppo donated personal protective equipment during the Covid-19 pandemic to Indonesia’s National Agency for Disaster Countermeasure. Although acts of social responsibility are not unique to these two companies — South Korea’s Samsung has also made significant contributions to Indonesian society — they have been particularly beneficial in generating public goodwill towards Chinese companies. After Vivo provided food assistance to aid Covid-19 relief efforts, the Indonesian Red Cross Society lauded the company as an “inspiration” to other businesses.
While Indonesian consumers no longer perceive Chinese smartphones as subpar counterfeits, many have more broadly become wary of Chinese technology, for different reasons. Just one in three Indonesians favors Chinese investors purchasing a controlling stake in local companies, and nearly half view China as a national security threat — attitudes which could potentially affect Chinese firms’ success in the local market. In 2021, major newspaper Kompas warned Indonesians that they could face problems downloading Google mobile services on Chinese-made phones because of China’s internet censorship practices. But politics have not yet shaped the individual consumer’s decisions: At the end of the day, Chinese smartphones are still high-quality and affordable.
Competitive pricing, localized marketing, and corporate social responsibility have so far insulated Chinese smartphone companies from potential reputational challenges. Until rivals like Apple and Samsung begin devising more effective strategies, it seems unlikely that China’s dominance over the Indonesian smartphone market will be challenged anytime soon.