Chinese smartphone maker Oppo to boost Indonesian manufacturing in bet on Southeast Asia

Oppo already uses slightly more than the 35 per cent of local smartphone components required by Indonesian law, but it is looking to scale up

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Oppo plans to expand local manufacturing in Indonesia as it makes a bet on Southeast Asia’s largest economy. Photo: Shutterstock

Iris Dengin Bali, Indonesia

Published: 9:00am, 24 Nov 2024

Chinese smartphone maker Oppo is looking to increase its sourcing from Indonesian suppliers at its local factory in an effort to strengthen its global manufacturing capabilities, amid a shift in many economies encouraging more localisation.

Around 36 to 37 per cent of smartphone components that Oppo sources for its Indonesian factory in Tangerang come from domestic suppliers, including batteries, packaging materials, adaptors and USB cables, according to Jefry Firman de Haan, director of Oppo’s Indonesia Manufacturing Centre.

The proportion of parts puts it slightly above Indonesia’s required 35 per cent threshold for smartphone makers under its domestic component level (TKDN) policy. Meeting this mandate is required for brands to sell handsets in the country, which has the largest economy in Southeast Asia.

Still, Oppo wants to go further, according to de Haan. “We are looking for good suppliers for all of our components, and we communicate and cooperate closely with the Ministry of Industry and local governments to find the right suppliers and vendors for us,” he said during a media tour of the factory on Tuesday, which the company sponsored.

Indonesia banned the sale of Apple’s latest iPhone last month, saying the US tech giant failed to meet the TKDN requirement and fulfil its investment commitment to the market. Days later, Google’s Pixel phones were also banned for sale in the country for similar reasons.

Oppo launched its Find X8 and Find X8 Pro in Indonesia on November 20, bringing the Find X line back to overseas markets after a two year hiatus. Photo: Oppo

Indonesia is leveraging its rapidly growing economy to boost foreign investment in local manufacturing, a trend that has been growing globally. India, for example, has been pushing a “Make in India” campaign for a decade, significantly growing its manufacturing base.