Mobile World continues to bet on Indonesia

Each 400-square-meter Erablue store in Indonesia fetches revenues of VND4.5-5 billion ($191,900-213,200) a month, which in Vietnam would have meant a profit, Doan Van Hieu Em, Mobile World’s head of smartphone and electronics retail, said at the company’s recent annual general meeting.

But the high investment in Indonesia recently means the stores are yet to break even.

Erablue is a venture with Indonesian tech retailer Erafone Artha Retailindo. A year old now, it has five electronics stores.

Em said the smartphone and electronics market in Indonesia is similar to Vietnam’s 10 years ago when traditional stores accounted for 50-60% of sales and no chain had been firmly established.

Mobile World’s expanded its presence with Dien May Xanh stores and became the first retailer to cover Vietnam’s 63 provinces and cities as revenues surged.

Em expected the same thing to happen in Indonesia.

"The two biggest retailers in Indonesia together have fewer than 100 stores and most of them are located in malls, which is not convenient for all."

Erablue opens standalone stores since the shopping habit of Indonesians and Vietnamese are pretty similar, and this has proved to be the right decision as the revenues have shown, he said.

Mobile World chairman Nguyen Duc Tai said the biggest difference that Erablue offers is services. Traditional retailers in Indonesia do not often install electronic devices in buyers’ homes and leave that to manufactures instead, and it usually takes days.

But Erablue sends staff to install the devices within a day, a service that has been successfully used in Vietnam.

Mobile World leaders expect to have 500 stores in Indonesia within the next five years and grab a 20-40% market share to earn revenues of US$2-4 billion annually.

They also are considering taking Erablue public in Indonesia.

Mobile World earlier pulled the plug on its Cambodia operations due to the small market size and complex tax policies and decided to focus its resources on Indonesia.

Em said Indonesia’s smartphone and electronics retail market is estimated at $14 billion, several times Cambodia’s size and double Vietnam’s.