Indonesia’s ‘king of feature phones’ wants to copy AirAsia to beat Samsung

These are exciting times in Indonesia’s handset market. As smartphone prices drop and interest in entry-level devices surges, there’s a window of opportunity for local brands to carve out their spot in a market dominated by Samsung.

The incentive to participate in this race is high. Data from market research group Counterpoint shows the smartphone segment is currently growing at 30 percent annually, while overall phone unit shipments remain steady. It means that Indonesians are now willing to spend on replacing their feature phones with smartphones, and are doing so in droves. Smartphone shipments reached 9 million units in Q2 2015, the study found.

A growing long tail of local and foreign brands is competing for first-time smartphone buyers, and the figures show that local brand Evercoss is in a strong position.

Indonesia mobile phone shipments Q4 2014 vs Q1 2015 (top), Q1 2015 vs Q2 2015 (below)

Source: Counterpoint

In Q2 2015, for the first time, Evercoss overtook Samsung in overall handset shipments – which includes feature phones and smartphones. The two brands have been in a fairly close race in the past three quarters. However, last quarter’s win for Evercoss can be in part attributed to Samsung’s significant losses.

The bulk of Evercoss’s overall market share is carried by feature phones. Looking only at smartphones over that same period of time, Samsung’s market share is still dominant. But Evercoss is slowly closing the gap, with a little over 1 percent growth for its smartphone shipments in the previous quarter as Samsung continues to drop.

Local brands in the smartphone era

This is an interesting development to follow. If Evercoss continues to nibble away at Samsung’s spot in the smartphone segment, it would prove that local brands can take their feature phone buyers by the hand and lead them into the smartphone era without switching brands.

‘Graduating’ to an entry-level Samsung from their local brand may have been the obvious choice for Indonesians until recently, but it’s not as simple as that anymore. A multitude of devices are vying for buyers’ attention. Since there is less room to stand out in terms of hardware and design – many lower-end smartphones are manufactured in the same Chinese facilities anyway – standing out is now a matter of highlighting the right details.

Evercoss CMO Ricky Tanudibrata is well aware of this. He’s directing the move to turn his brand from a commodity into an affordable yet aspirational product. In Ricky’s words, Evercoss wants to shed the image of being the “king of feature phones” to become the “AirAsia of smartphones.” AirAsia is his role model because the low-cost airline was able to make flying an option for a larger segment of people, and is perceived as the reliable option among its low-cost competitors.

Ricky Tanudibrata, CMO at Evercoss

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