Cellphone Distributor Erajaya Upbeat About Sales Despite Sluggish Economy


SEPTEMBER 13, 2015

Jakarta. Publicly listed cellphone distributor and retailer Erajaya Swasembada is upbeat on achieving its sales target of Rp 15 trillion ($1.05 billion) this year, backed by a wave of budget smartphones from Taiwan and China pouring into Southeast Asia's largest economy.

"We may even exceed Rp 15 trillion, since we've already booked about Rp 8.6 trillion in the first half of the year," said Djatmiko Wardoyo, Erajaya Swasembada corporate secretary .

"There was a slight decline in sales in August, which was in line with the industry, but we're starting to see some pick-up in September."

According to Djatmiko, the flood of budget smartphones like China's Lenovo and Xiaomi which typically price at around Rp 1.5 million and lower  have allowed Erajaya to maintain its sales volume in the face of tighter purchasing power among Indonesia's consumers, quickly gaining a double-digit market share in Erajaya's portfolio.

Two years ago, the average selling price of Erajaya stood at about Rp 3.4 million,  Djatmiko said.

However, that figure is seeing a slow downward trend, declining to Rp 3 million last year and reaching some Rp 2.7 million so far this year, he added.

"Samsung still holds the biggest market share right now [...] but brands from Taiwan and China have very promising and significant growth at Erajaya," he said, declining to disclose the specific market share figures of each brands.

Despite a 30 percent jump in sales to Rp 8.68 trillion, Erajaya's net profit slipped 2 percent to Rp 110 billion in the January-June period this year from about Rp 113 billion in the same months of 2014, as costs increased faster than sales.

Cost of goods sold at Erajaya jumped nearly 30 percent to Rp 8 trillion, while operating cost surged 32 percent to Rp 479 billion.

Erajaya currently operates more than 520 iBox and Erafone retail outlets across Indonesia, offering some 13 brands, from Apple to Samsung and China's Oppo. The company recently expanded its business into cellphone manufacturing with an assembly plant in East Jakarta.

It's also venturing overseas with a plan to launch its first Erafone outlet in Malaysia later this year, following a 380,000-ringgit ($88,250) joint venture with Malaysian handset distributor Switch last month.