Indonesia was one of the top rank South East Asian countries targeted by the world's largest electronics manufacturers and remains a major battle ground for the world's electronic giants. Despite its slow recovery from the 1997-1998 economic crisis and the latest economic slow down due to the high increase of world fuel price, Indonesia remains to have potential room for growth for electronic products as penetration is still low and its 242 million population constitutes a large domestic market. Electronic sales has experienced a double digit growth from 2002-2004, started to decline in 2005, and estimated to experience flat growth in 2006. A stronger economic climate and higher levels of investment-related capital inflow, however, is projected in 2007 and subsequent years, making the electronics players remain optimistic about the prospects for the Indonesian market.

Electronic producers use two types of distribution channel to sell its product, i.e. independent market (traditional store) and organized market,(modern store, chain store, superstore, hyper mart). In term of quantity independent market dominates and it is still the leading point of purchase for TV consumers (79%). TV selling share in the organized market is only 29%, but in term of most money spent by consumers, the growth is in the organized market. The percentage for organized market keeps increasing in recent years, particularly in Jakarta and other big towns in Indonesia. The growth of organized market as a modern outlet is still very high as it expands aggressively and offers services and facilities which are in line with modern consumers' behaviors. It is therefore important for electronic producers to set a proper balance between independent and organized market as its product outlets in order to increase sales and sustain growth.



2006 Electronic Market Club trade survey indicates that TV is still the best selling product compared to other product categories in the electronic industry in Indonesia. TV industry in Indonesia used to be dominated by Japanese TV, but now the local, Korean and Chinese TVs have started to take the market share with more competitive prices and innovative products. Sharp TV is acknowledged as a market leader, followed by other well known brands such as LG (Korea), Samsung (Korea), Sony (Japan), Toshiba (Japan), Panasonic (Japan), Sanyo (Japan), and Polytron (local). Latest trend shows that Flat TV, Plasma TV and LCD TV will replace Non Flat TV.

Sharp is one of the early Japanese TV producers and has existed in Indonesia since 1969. Besides TV, Sharp manufactures other electronic products covering among other small appliances, household appliances, and audio visual. Sharp's TV, however, is the country's TV market leader with 22% market share and is the major contributor to PT. Sharp Electronic Indonesia's revenue and growth. Since 2002, Sharp is experiencing declining growth.

The economic slow down, the estimated 3.7 million TV units market demand for 2006, the fierce competition from new players, and the consumers' behavioral are at the same time opportunities and challenges for PT Sharp Electronics Indonesia. Revitalizing its mature brand, optimizing its strengths and resources, setting the right percentage between independent and organized channels, and implementing the proposed values in Sharp's electronic outlets as recommended in this report would provide additional values to its existing outlet in order to attain the company's growth.





Research Location : PT Sharp Electronics Indonesia



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