Smuggled electronics have continually increased their grip on the domestic market in the last five years and may continue to beat local manufacturers due to “minimum effort in law enforcement”.
“The government’s minimum effort in strictly implementing policies has created an opportunity for [further] smuggling to develop this year,” the Indonesian Chamber of Commerce and Industry (Kadin) vice chairman on industry, research and technology, Rachmat Gobel, told a discussion at the Industry Ministry on Thursday.
According to data from the Electronics Producers Association (Gabel), which Gobel chairs, smuggled electronics and local products controlled 20 percent and 51 percent respectively of the domestic market total of Rp 16.7 trillion (US$1.68 billion) in 2004.
Two years later, smuggled electronics and local products shared around 40 percent and 31 percent respectively of a domestic market total of Rp 22.6 trillion, while the Central Statistics Agency (BPS) recorded about Rp 5.2 trillion in legal imports that year, says the data.
In 2007, of the Rp 27.6 trillion total domestic market, 29 percent was controlled by local products, about 25 percent, or Rp 6.89 trillion, was recorded by the BPS in legal imports, while smuggled electronics controlled the majority of 46 percent, it says.
Smuggled electronics lost some of its market share in 2008, with Rp 10.12 trillion, or 35 percent of a Rp 28.9 trillion total domestic market, while local products controlled a 34 percent market share, it says.
The drop in the smuggled electronics’ market share in 2008 was probably because of the declining global demand, which resulted from the global economic turmoil, coupled with many countries’ attempts to protect their domestic markets.
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