Nation's firms explore bigger opportunities in ASEAN

When landing at Soekarno-Hatta International Airport in Jakarta, Indonesia, tourists are often surprised to see many billboards advertising Chinese companies such as smartphone maker Oppo.

Walking into high-end shopping malls in Jakarta, consumers also notice that Chinese brands are spotlighted. Oppo has a three-story high poster in Gandaria, displaying its latest foldable smartphones. In Plaza Indonesia, which houses international luxury brands such as Louis Vuitton and Chanel, Oppo also has a well-designed store, overwhelmed with consumers trying out its latest products.

Such a noticeable presence showcases the popularity of Oppo in Indonesia — an example of how Chinese companies are eager to explore the biggest economy in the Association of Southeast Asian Nations.

Jim Zhang, CEO of Oppo Indonesia, said: "Indonesia has a population of nearly 280 million with about 5 million babies born every year. From the age structure of the consumer market, Indonesia is worth looking at."

"Meanwhile, Indonesia has seen rapid economic development in the past decade and local consumers' income levels have improved, allowing them to spend more," Zhang said.

Arsjad Rasjid, chairman of the Indonesian Chamber of Commerce and Industry, said that Indonesia's economic vitality has attracted many Chinese enterprises to invest, with their focus on areas like manufacturing, construction, energy, the internet and technology.

According to statistics from the Indonesian government, Chinese companies' direct investment in the country reached $8.23 billion in 2022, a year-on-year jump of 160 percent, reaching a record high and ranking as the second-largest source of foreign investment in Indonesia.

US investment bank Goldman Sachs also forecasted in a report that Indonesia will become the world's fourth-largest economy by 2050.

To turn such rosy prospects into reality, Chinese companies are scrambling to better localize their products, management teams and marketing strategies.

Oppo, for instance, is now zooming in on the high-end smartphone market after the company beat Samsung as the top smartphone brand in Indonesia in the second quarter with a market share of 20 percent.

Andy Shi, president of Oppo Asia Pacific, said, "We aim to compete head-on with Samsung in the above-$800 segment with our flagship foldable smartphones."

The ambition is backed by Oppo's strong performance in the local market. After ten years of hard work in exploring the Indonesian market, Oppo already has a strong foundation. It has over 65 million active users in the country, cultivating about 15,000 local retailers and 20,000 distribution stores.

"We have been the fastest-growing brand in Southeast Asia in the past two years. Now is the best time to crack the high-end market," Shi said.

In the second quarter, the company's Find N2 Flip series smartphone was the number one model among foldable smartphones in Indonesia, with a market share of 65 percent, said market research company Canalys.

The success is attributed in part to Oppo's strategy of opening well-designed stores with competitive products in high-end shopping malls.

Such stores, called the Oppo Gallery, are decorated more like art museums than smartphone stores. Interesting brand events are held where consumers can also enjoy free coffee and local internet celebrities often show up. In comparison, other smartphone brands such as Samsung do not have flagship stores of this size in Indonesia.

"The Oppo Gallery Plaza Indonesia has the highest single-store sales in the Asia Pacific for Find N2 Flip," said Patrick Owen, chief marketing officer of Oppo Indonesia.

Oppo has also built a factory in Indonesia, which is the largest smartphone plant in the country. Covering an area of 130,000 square meters, the factory has about 2,000 employees during peak season and can produce 28 million phones a year at full capacity.

Aware of the opportunities in Indonesia, other Chinese smartphone brands, such as Vivo and Xiaomi, as well as Chinese automobile, internet and energy companies, are also beefing up investment in the country.

From nickel ore and steel to power batteries and electric vehicles, Chinese companies, including electric vehicle battery maker Contemporary Amperex Technology Co Ltd, carmakers Wuling and Chery and internet companies, such as Douyin and Shein, have gradually formed a complete industrial chain in Indonesia.

According to data from Indonesia's automobile industry association, in 2022, Wuling accounted for 78 percent of the local electric vehicle market.

"Almost all the large Chinese tech companies and investment institutions have come to Indonesia this year. They are all looking at the market," Zhang from Oppo said.