Indonesia Consumer Electronics Report Q1 2013

Indonesia’s consumer electronics market is forecast to grow around 12% in 2013, driven by economic
growth and strong demand for smartphones and flat-panel TV sets. The consumer story in Indonesia
continues to be one of the brightest in the world and Indonesia’s consumer electronics market remains one
of the most untapped markets in Asia. In 2012, strong wage growth continued but we believe that the
Indonesian consumer has hit its cyclical peak, and now see growth in the space slowing modestly in 2013
to 5.5% from 5.7% in 2012. Despite the challenging nature of distribution in the country, due to its
archipelagic structure, a PC penetration rate of less than 2% and digital camera household penetration of
less than 20% offer a continued growth opportunity.
Headline Expenditure Projections
Computer hardware sales: US$4.2bn in 2012 to US$4.7bn in 2013, +11% in US dollar terms. Forecast in
US dollar terms downwardly revised after a slowdown in H112, but growing affordability and credit
availability are driving sales in the consumer segment. AV sales: US$4.5bn in 2012 to US$5.0bn in 2013,
+13% in US dollar terms. Forecast in US dollar terms downwardly revised but the flat-screen TV set
market continues to grow strongly year-on-year (y-o-y).
Handset sales: US$2.3bn in 2012 to US$2.7bn in 2013, +13% in US dollar terms. Forecast in US dollar
terms upwardly revised smartphones now accounting for around 20% of the local handset market.
Risk/Reward Ratings: Indonesia’s score is 42.5 out of 100.0. Indonesia ranks an unchanged 9th in the
Asia region in our latest RRR table, ahead of regional peers such as the Philippines and Thailand.
Indonesia’s vast size and currently low penetration across a range of consumer electronics product
categories should see the country rise in the rankings over time.
Key Trends & Developments
?? Indonesia is again expected to be one of the fastest-growing regional PC markets, continuing the
double-digit growth of recent years. Rising PC penetration points to exceptional growth potential
with the main drivers being growing affordability and more credit availability.
?? TV sets will be the main driver of AV category sales growth over the forecast period as
Indonesian consumers upgrade their CRT sets. TV set penetration is estimated at around 75% in
Indonesia, leaving room for continued growth. A booming market in the past few years has
spurred the development of a local TV set manufacturing industry and led to a fall in imports
even as the market soared.
?? The Indonesian market has also seen a surge in popularity of smartphones, but, as in other
emerging Asian markets, however, the grey sector remains a significant feature of the market,
with cheap knock-off models, many from China, ubiquitous in the market. The number of
mobile users will continue to expand, fuelled mainly by younger people, among which the
popularity of social networking applications has prompted an explosion in mobile phone
ownership.

Indonesia Consumer Electronics Report Q1 2013

Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 7
Indonesia Consumer Electronics Market SWOT ................................................................................................................................................... 7
Indonesia Electronics Industry SWOT .................................................................................................................................................................. 8
Indonesia Political SWOT ..................................................................................................................................................................................... 9
Indonesia Economic SWOT ................................................................................................................................................................................ 10
Indonesia Business Environment SWOT ............................................................................................................................................................. 11
Asia Risk/Reward Ratings ............................................................................................................................. 12
Table: Asia Pacific CE Risk/Reward Ratings, Q113 ........................................................................................................................................... 15
Consumer Electronics Market ...................................................................................................................... 16
Computers........................................................................................................................................................................................................... 17
Table: Computer Spending By Sector (estimate) ................................................................................................................................................ 17
Table: Computer Sales, 2010-2017 ..................................................................................................................................................................... 20
AV ....................................................................................................................................................................................................................... 20
Table: AV Demand, 2010-2017........................................................................................................................................................................... 23
Mobile Handsets ................................................................................................................................................................................................. 23
Table: Mobile Telephone Industry Sales, 2010-2017 .......................................................................................................................................... 27
Consumer Electronics Industry .................................................................................................................... 28
Overview .................................................................................................................................................................................................................. 28
Industry Development ......................................................................................................................................................................................... 28
Table: Electronics Industry Overview, 2010-2017 .............................................................................................................................................. 28
Computers........................................................................................................................................................................................................... 32
Table: Computer Production And Exports, 2010-2017 ....................................................................................................................................... 32
AV ....................................................................................................................................................................................................................... 32
Table: AV Production, 2010-2017 ...................................................................................................................................................................... 33
Telecommunications ........................................................................................................................................................................................... 33
Table: Manufacturing, 2010-2017 ...................................................................................................................................................................... 34
Industry Forecast Scenario ........................................................................................................................... 35
Table: Consumer Electronics Overview, 2010-2017 ........................................................................................................................................... 36
Industry Developments................................................................................................................................. 37
Macroeconomic Forecast .............................................................................................................................. 39
Table: Economic Activity , 2011-2016 ................................................................................................................................................................ 41
Competitive Landscape ................................................................................................................................ 42
Computers........................................................................................................................................................................................................... 42
AV ....................................................................................................................................................................................................................... 44
Handsets ............................................................................................................................................................................................................. 46
Country Snapshot ......................................................................................................................................... 51
Table: Indonesia's Population By Age Group, 1990-2020 ('000) ......................................................................................................................... 52
Table: Indonesia's Population By Age Group, 1990-2020 (% of total) ............................................................................................................... 53
Table: Indonesia's Key Population Ratios, 1990-2020 ...................................................................................................................................... 54
Table: Indonesia's Rural And Urban Population, 1990-2020 .............................................................................................................................. 54
BMI Methodology .......................................................................................................................................... 55
How We Generate Our Industry Forecasts ......................................................................................................................................................... 55
Electronics Industry ............................................................................................................................................................................................ 56
Sources ............................................................................................................................................................................................................... 56BMI Industry View ........................................................................................................................................... 7
SWOT Analysis ............................................................................................................................................... 8
Indonesia Food Industry SWOT ............................................................................................................................................................................ 8
Indonesia Drink Industry SWOT ........................................................................................................................................................................... 9
Indonesia Mass Grocery Retail Industry SWOT.................................................................................................................................................. 10
Business Environment ................................................................................................................................. 11
BMI's Core Global Industry Views .......................................................................................................................................................................... 11
Table: Core Views .............................................................................................................................................................................................. 19
Asia Pacific Food & Drink Risk/Reward Ratings .................................................................................................................................................... 20
Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q113 (score out of 10) ................................................................................................. 21
Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q113........................................................................................................................... 24
Indonesia's Risk/Reward Rating ......................................................................................................................................................................... 25
Macroeconomic Outlook .......................................................................................................................................................................................... 26
Table: Economic Activity .................................................................................................................................................................................... 28
Industry Forecast Scenario .......................................................................................................................... 29
Consumer Outlook ................................................................................................................................................................................................... 29
Food ......................................................................................................................................................................................................................... 31
Food Consumption .............................................................................................................................................................................................. 31
Table: Food Consumption Indicators - Historical Data & Forecasts, 2010-2017 .............................................................................................. 32
Canned Food ...................................................................................................................................................................................................... 32
Table: Canned Food Value/Volume Sales - Historical Data & Forecasts, 2010-2017 ........................................................................................ 33
Confectionery ...................................................................................................................................................................................................... 33
Table: Confectionery Volume Sales, Production & Trade - Historical Data & Forecasts, 2010-2017 ............................................................... 34
Drink ........................................................................................................................................................................................................................ 37
Hot Drinks .......................................................................................................................................................................................................... 37
Table: Hot Drinks Value/Volume Sales - Historical Data & Forecasts, 2010-2017............................................................................................ 38
Alcoholic Drinks ................................................................................................................................................................................................. 38
Table: Alcoholic Drinks Value/Volume Sales - Historical Data & Forecasts, 2010-2017 .................................................................................. 39
Soft Drinks .......................................................................................................................................................................................................... 40
Table: Soft Drinks Value/Volume Sales - Historical Data & Forecasts, 2010-2017 ........................................................................................... 42
Mass Grocery Retail ................................................................................................................................................................................................ 43
Table: Mass Grocery Retail Sales By Format - Historical Data & Forecasts, 2010-2017 .................................................................................. 44
Table: Grocery Retail Sales by Format (%) ........................................................................................................................................................ 44
Trade ........................................................................................................................................................................................................................ 45
Table: Food & Drink Trade Indicators - Historical Data & Forecasts, 2010-2017 ............................................................................................ 45
Food ............................................................................................................................................................... 46
Key Industry Trends And Developments .................................................................................................................................................................. 46
Fonterra Sees Strong Dairy Potential ................................................................................................................................................................. 46
Tapping Into The Fast-Food Potential ................................................................................................................................................................ 46
Market Overview ...................................................................................................................................................................................................... 47
Food Production ................................................................................................................................................................................................. 47
Confectionery ...................................................................................................................................................................................................... 48
Halal ................................................................................................................................................................................................................... 48
Agriculture .......................................................................................................................................................................................................... 49
Organics ............................................................................................................................................................................................................. 49
Drink ............................................................................................................................................................... 50
Key Industry Trends And Developments .................................................................................................................................................................. 50
Heineken Seals Control Of APB .......................................................................................................................................................................... 50
Asahi Attracted By Dynamism In Soft Drinks...................................................................................................................................................... 50
Market Overview ...................................................................................................................................................................................................... 51
Soft Drinks .......................................................................................................................................................................................................... 51
Alcoholic Drinks ................................................................................................................................................................................................. 52
Hot Drinks .......................................................................................................................................................................................................... 52
Mass Grocery Retail ..................................................................................................................................... 53
Key Industry Trends And Developments .................................................................................................................................................................. 53
Carrefour Exiting Singapore ............................................................................................................................................................................... 53
Growth Of Minimarkets Poses Threat To Supermarkets ..................................................................................................................................... 53
Traditional Retailers Facing Greater Pressure On Market Share ....................................................................................................................... 55
Market Overview ...................................................................................................................................................................................................... 56
Table: Structure Of Indonesia's Mass Grocery Retail Sector - Estimated Number Of Outlets By Format .......................................................... 58
Table: Structure Of Indonesia's Mass Grocery Retail Sector - Sales By Format (IDRbn) ................................................................................... 58
Table: Structure Of Indonesia's Mass Grocery Retail Sector - Sales By Format (US$mn).................................................................................. 58
Table: Average Annual Sales By Format - 2011 ................................................................................................................................................ 59
Competitive Landscape ............................................................................................................................... 60
Table: Key Players In Indonesia's Food Sector .................................................................................................................................................. 60
Table: Key Players In Indonesia's Drink Sector ................................................................................................................................................. 61
Table: Key Players In Indonesia's Mass Grocery Retail Sector, 2012 ................................................................................................................. 62
Company Monitor ......................................................................................................................................... 63
Food ......................................................................................................................................................................................................................... 63
Indofood Sukses Makmur Terbuka ...................................................................................................................................................................... 63
PT Charoen Pokphand Indonesia Tbk ................................................................................................................................................................ 65
Nestlé Indonesia .................................................................................................................................................................................................. 67
Mayora Indah Tbk .............................................................................................................................................................................................. 69
PT Unilever Indonesia Tbk ................................................................................................................................................................................. 71
Drink ........................................................................................................................................................................................................................ 73
Coca-Cola Amatil (CCA) .................................................................................................................................................................................... 73
Aqua Golden Mississippi (Aqua) ......................................................................................................................................................................... 76
Mass Grocery Retail ................................................................................................................................................................................................ 78
Matahari Putra Prima ........................................................................................................................................................................................ 78
Carrefour ............................................................................................................................................................................................................ 81
Hero Supermarket Tbk ........................................................................................................................................................................................ 84
Demographic Outlook .................................................................................................................................. 86
Table: Indonesia's Population By Age Group, 1990-2020 ('000) ......................................................................................................................... 87
Table: Indonesia's Population By Age Group, 1990-2020 (% of total) ............................................................................................................... 88
Table: Indonesia's Key Population Ratios, 1990-2020 ...................................................................................................................................... 89
Table: Indonesia's Rural And Urban Population, 1990-2020 .............................................................................................................................. 89
Risk/Reward Ratings Methodology ............................................................................................................. 90
Table: Rewards ................................................................................................................................................................................................... 90
Table: Risks ........................................................................................................................................................................................................ 91
Weighting ................................................................................................................................................................................................................. 91
Table: Weighting................................................................................................................................................................................................. 91
BMI Food & Drink Industry Glossary ........................................................................................................... 92
Food & Drink........................................................................................................................................................................................................... 92
Mass Grocery Retail ................................................................................................................................................................................................ 92
BMI Food & Drink Forecasting & Sourcing ................................................................................................. 94
How We Generate Our Industry Forecasts .............................................................................................................................................................. 94
Sourcing .............................................................................................................................................................................................................. 95Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 6
Italy Security SWOT.............................................................................................................................................................................................. 6
Italy Political SWOT ............................................................................................................................................................................................. 7
Italy Economic SWOT ........................................................................................................................................................................................... 8
Italy Business Environment SWOT ....................................................................................................................................................................... 9
Global Political Outlook ................................................................................................................................10
Europe Security Overview .............................................................................................................................13
The Strategic Outlook For The 2010s ...................................................................................................................................................................... 13
Europe In A Global Context................................................................................................................................................................................ 13
Europe's Key Security Issues Over The Coming Decade ......................................................................................................................................... 13
The Future Of The Eurozone And EU ................................................................................................................................................................. 13
EU Expansion ..................................................................................................................................................................................................... 14
NATO Expansion And Relations With The US .................................................................................................................................................... 14
Post-Qadhafi Libya ............................................................................................................................................................................................. 15
Relations With Russia ......................................................................................................................................................................................... 16
Relations With Turkey ......................................................................................................................................................................................... 16
The Balkans ........................................................................................................................................................................................................ 17
Organised Crime ................................................................................................................................................................................................ 17
Islamist Terrorism .............................................................................................................................................................................................. 18
The Greater Black Sea Region ............................................................................................................................................................................ 18
The Armenia-Azerbaijan Dispute ........................................................................................................................................................................ 19
Security Risk Analysis ..................................................................................................................................21
BMI's Security Ratings ............................................................................................................................................................................................. 21
Table: Europe Security Risk Ratings .................................................................................................................................................................. 21
Table: Europe State Terrorism Vulnerability To Terrorism Index ...........................................................................................

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