ACFTA Bears Tight Competition with Chinese Cell Phones

Even before the ASEAN-China Free Trade Agreement (ACFTA) has been applied on January 1, 2010, Chinese brand mobiles phones flooded the Indonesian market, but a number of mobile retailers in Mangga Dua don't think the FTA has affected their sales that much.

Is there an increase on sales or visitors asking for Chinese mobiles after the ACFTA at the beginning of 2010? "Not really," said Septi, a mobile phone retailer at Jembatan Niaga II, Mangga Dua mall, Friday.

She said that the phones were cheap even before the ACFTA. "People do buy them because they're cheap but with lots of features." She even believed that those Chinese brands are a big hit because they have qwerty keypads like a BlackBerry but much cheaper. She claimed that in a day she could sell about five units of Chinese mobiles, although there were quiet days also.

The ACFTA has invited many brands, but most retailers only bring forward one brand that's already well-known, so only that one brand remains a best-seller.

"At the beginning it was a boom, but now they're all average because there are many types, the best selling is probably Nexian," said Adi, a retailer from Jembatan Dusit ITC Mangga Dua, Friday. Adi also explained that the low-end segment has been dominated by Chinese mobiles.

"If your budget is only Rp. 800,000 what can you get from Nokia? The best additional feature is probably just a radio," then he showed a Chinese brand that can be purchased with the same budget, but already with dual SIM cards, able to browse Facebook and other social networking sites, and with VGA camera.

But he claimed that people with a higher budget who are specifically looking for special features like a better camera would still go to the established brands like Nokia or Sony Ericsson. "The expensive Chinese mobile types dont' sell. Just the low-end (sells)."

Price not as advertised

Another interesting point was that how cheap the Chinese brands are, the price can't be exactly as advertised in newspapers and other mass media. Adi showed an ad for Nexian G522 that said in big fonts 'Rp. 599,000' but he thinks that in the market it can't be bought with that exact price. "You can probably get it at Rp. 650,000." Other shops also confirms Adi's words on this matter.