The Outlook for E-Cigarette Market in Indonesia

On August 3rd, the IEICE Indonesia Jakarta e-cigarette exhibition officially opened. As the official media partner for this IECIE event, 2FIRSTS conducted on-site visits to numerous booths and conducted random interviews. The majority of the interviewed brands stated that they did not specifically prepare new products for the Indonesian market, and their showcased products were either global standard brands or directly taken from another market.

Amy, the General Manager of SONG International Sales Center, a subsidiary of Xiaosong Corporation, stated that all the showcased products are globally recognized and not tailored specifically for any single market. As a new brand, SONG primarily capitalizes on its parent company's warehouses and distribution channels in the home appliance sector to penetrate the Indonesian market.

The brand Freeton does not have a specific product line for the Indonesian market, but instead focuses on the overall Southeast Asian market. They have already released their large-screen products. According to Jin Ye, the market leader for lanavape in Malaysia, the exhibited products are mainly from the Malaysian market, but they have specifically designed the product appearance for the Indonesian market.

Russian local brand Brusko has just entered the Indonesian market, with its products yet to be available on the retail side. Brusko emphasizes its global strategy and does not conduct any R&D specific to a single market. With over sixty flavors available, Brusko will select some flavors to be directly launched in the Indonesian market.

The lack of product-specific design is underpinned by the uncertainty surrounding the development of this market, with numerous brands still in a phase of observation and exploration.

According to local e-cigarette industry veteran, Jonathan, the local protection policies of the Indonesian government are strict, and disposable products are subject to high taxes, resulting in increased retail prices. However, due to the low consumption level in Indonesia, sales are facing significant obstacles. Eric, a staff member at Chillax, stated that Indonesia has numerous and complex taxes and fees. Local e-liquid companies are dominant in the market, with extremely low taxes on bottled e-liquid. In comparison, closed-system e-cigarettes face expensive taxes and fees, making the development of disposable products in the Indonesian market extremely challenging.

The disposable e-cigarette is the dominant product type in the global e-cigarette market, while the Indonesian market continues to be dominated by open systems. The lag in product forms not only affects the development of the e-cigarette market in Indonesia, but also hampers the enthusiasm of brand manufacturers to introduce new products.

However, there are also brands entering the Indonesian market who are confident about their future development. The staff of Brusko, for example, believe that the current Indonesian market is similar to the Russian market three years ago. As a mature brand, they can clearly see the direction of the industry's future, so they have confidence in the Indonesian market, as well as the Southeast Asian market. Likewise, Lanavape also states that there is a significant wealth disparity in the Indonesian market, and while there is a market for disposable and pod systems, it is still untapped.