China's Oppo doubles down on Indonesia with expanded smartphone plant

TANGERANG, Indonesia/TAIPEI — Indonesia is now the second-biggest overseas production base for China’s Oppo as the smartphone maker looks to cement its leading market position in Southeast Asia’s most populous country.

Oppo on Thursday held the global launch for its latest smartphone in Bali, and says it has expanded and upgraded its production facility in Tangerang, west of Jakarta, to make the full range of the company’s phones, from budget models to its most high-end offerings.

At maximum capacity, the facility will employ more 1,000 locally hired staff and be able to turn out 2 million phones a month, according to the company.

Jefry Firman de Haan, director of Oppo’s Indonesia manufacturing center, said the company aims to continue increasing its domestic sourcing of components — an important consideration in a country that imposes “local content” requirements on foreign firms in exchange for access to its market.

Currently, Oppo sources batteries, adapters, USB cables, packaging materials, software and applications locally. Its local content ratio for smartphones is around 36% to 37%, above Jakarta’s requirement of 35%. The company also operates a comprehensive testing lab that conducts battery, signal, temperature, drop and dust tests, he said.

The smartphone production facility mainly serves the growing Indonesian market.

“We have the ability to quickly adjust and increase production volume according to market demand,” the director said.

Oppo began operations in Indonesia in 2013, establishing the country’s first smartphone manufacturing plant in 2015. The company expanded its operations during the COVID pandemic. According to data from Canalys, Oppo is the leading smartphone brand in Indonesia, capturing about 22% of the market in the most recent quarter.

Oppo’s efforts align with Indonesia’s stepped-up efforts to attract foreign investment and strengthen local manufacturing. The Indonesian government recently banned sales of the iPhone 16, citing Apple’s failure to meet its investment commitments. A resolution may be on the way, however, as authorities said on Wednesday that Apple has proposed investing $100 million in the country.

Most other smartphone makers selling in Indonesia, including Samsung Electronics, Vivo, Xiaomi and Transsion, either have their own production facilities in the country or tap local partners to help make their products, said Vanessa Aurelia, an IDC analyst specializing in the Indonesian market.

“This [government policy] is certainly helpful for growing the local smartphone ecosystem,” the analyst told Nikkei Asia. “However, many guidelines are not clear and efficient enough, so that most materials are still shipped overseas to be assembled here.”

Oppo has been aggressive in setting up regional production hubs as the tech industry responds to major economies pushing to localize vital electronics production. Motivation for this localization drive includes boosting local economies and shortening supply chains to avoid disruptions.

Besides its production bases in China, India and Indonesia, Oppo has five smaller production centers around the world, including in Turkey, Egypt and Pakistan. Oppo began operating its first plant in Brazil this year to tap demand in Latin America, another key growth market.

Overseas markets account for 60% of Oppo’s total shipments, making them more important than its home market of China.

The company on Thursday hosted the global launch event for its flagship Find X8 AI smartphone series in Bali. Powered by MediaTek’s cutting-edge 3-nanometer chipset, the Find X8 series will go on sale not only in Southeast Asia but also in key European and Latin American markets.