Sales of electronics in Indonesia in the second quarter of 2017 are expected to have remained stuck at the same level as in the first quarter amid bleak demand. Ali Soebroto, Chairman of the Indonesian Electronics Industries Association (Gabel), said domestic sales growth of electronics has not risen significantly in Q2-2017 and, in fact, is far from the target. Soebroto attributed these weak electronic sales to people's preference to purchase goods that are related to the fasting month (Ramadan) such as food products or clothes.
Stagnant sales of electronics in Indonesia during the second quarter of 2017 are a disappointment because Gabel and industry players had hoped for the usual sales peak around the Idul Fitri period. Several years ago, sales of electronics could jump up to 30 percent during this period.
Based on data from Gabel, sales of those electronics manufacturers that are member of Gabel fell 10 percent year-on-year (y/y) in Q1-2017. This weak performance was attributed to bleak consumer purchasing power in Southeast Asia's largest economy. Despite accelerating overall macroeconomic growth matters did not improve in the second quarter. Indeed, sales of several electronic products rose (for example air conditioners) but their growth was offset by declining sales of other products (for example washing machines).
Also the Indonesian Retailers Association (Aprindo) detected rather weak sales during this year's Idul Fitri period. According to estimates from Aprindo, retail sales in Indonesia only rose about 5 - 6 percent from sales in ordinary months, while the figure was 16.3 percent during last year's Idul Fitri.
The Ramadan and Idul Fitri period are crucially important for sales of retailers in Indonesia. Aprindo says sales in this period contributed 45 percent to retail companies' total sales in 2016. This year, however, sales in the Ramadan and Idul Fitri period are estimated to contribute only 25 percent to retailers' full-year 2017 earnings.
Contribution Ramadan/Idul Fitri Sales to Full-Year Sales:
|% of Full-Year Sales
Last year sales in Indonesia's retail industry totaled IDR 200 trillion (approx. USD $15 billion). Aprindo remains optimistic sales can grow by 10 percent in 2017.
Sales in Indonesia's Retail Industry:
(in IDR trillion)