DEKO Enters the Market of Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. The power tool and hand tool supplier DEKO has recently entered the tool market in Indonesia and tools of DEKO are available in its local exclusive distributor’s stores now.
Status Quo
The market for power tools in Indonesia is in its growth stage. There is hardly any local manufacturing for power tools in the country and they are mostly imported from countries such as China, Japan, Germany and others. The growth in the power tools industry was supported by the growth of the construction and manufacturing industry in the country.
Indonesia's construction industry benefitted from President Widodo's infrastructure development agenda, which is part of the National Medium-Term Development Plan (RPJMN), running from 2015 to 2019.
Another key growth driver was the investment in infrastructure projects which correlates to a higher requirement of the electric power tools. The Indonesian government has allocated IDR 410.7 trillion for its infrastructure budget in 2018 that represents a 5.8% y-o-y increase.
Future Market Outlook
The future outlook of the power tool industry in Indonesia is positive and the industry is estimated to grow at a positive CAGR during 2018-2023. The market share of online sales is expected to double in this period. This is because companies are expanding to online sales as a channel of distribution so as to achieve greater market penetration.
The market for cordless power tools is expected to increase in the coming years with the increase in consumer knowledge about the usage and safety of the cordless power tools as compared to the corded tools. Moreover, the Indonesian government is trying to speed up infrastructure development across the Indonesian nation giving the sector a significant boost.
Market Segmentation
Electric power tools dominated the market of power tools in Indonesia followed by pneumatic power tools and hydraulic power tools in 2018. The price of electric power tools is generally lower than other categories of power tools owing to the low cost of production. This has resulted in an increase in the number of units sold in the last five years.
In 2018, the dealer network had the highest revenue share followed by direct sales and online sales. An essential reason behind the same was that the dealer network has higher accessibility to consumers than the companies. Additionally, dealers may also provide a fair comparison among different brands of the same product.
End-users use this as a parameter to make final purchases. The Java Island contributed the largest market share to the overall revenues of power tools market in Indonesia in 2018. This was followed by Sumatra, Kalimanthan, Sulawesi and other regions including New Guinea, Maluku Islands and others. Java has more than half of the country's population. The huge population in the area has led to a surge in construction activities and infrastructure projects there, thus driving the demand for power tools in the area.
In the electric power tools market, the electric grinders had the largest revenue share followed by electric drills, electric saws, electric hammers and others in 2018. Corded power tools remain the dominant market driver due to their robustness and low price.
The construction industry contributed the largest share in the electric power tools market. The manufacturing sector had the second largest share followed by other applications such as small workshops, DIY, carpentry and others.
Competitive Landscape
With the popularity of DEKO power tools and hand tools in more and more countries in the southern hemisphere, the exclusive official distributor in Indonesia finally decided to work with us and grow the business together. Before DEKO Tools entered Indonesia, its electric power tools market is moderately concentrated with the top 4 players accounting for the majority of the market share by revenue. Makita had the highest market share in the electric power tools market and is followed by Bosch, Hitachi and Stanley Black and Decker.
Within the premium category of electric power tools, Makita had the largest share followed by Bosch, Dewalt and others including Hilti, Metabo and others. In the medium category of electric power tools, Makita's brand Maktec had the largest market share followed by Bosch, Hitachi, Stanley Black and Decker and others including Metabo, Modern and others.
Like any other tool market, Indonesia also needs a tool brand that is both affordable and durable. DEKO is a perfect combination of these two elements. As DEKO enters the tool market of Indonesia, local people there have more options in terms of power tools and hand tools. Now, industrial workers, DIYers, and householders in Indonesia can purchase DEKO power tools and hand tools with a relatively small budget and use these tools in various projects.
If you’re looking for a Chinese power tool supplier, DEKO should be your number one choice as the most reliable electric tool and equipment supplier. Email to sales@dekotools.com to keep in touch with DEKO.
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