A quick glimpse of the opportunities of the cigar and e-smoking industry

Source: HelpGuide

Cigarettes have been a product of consumption for young adults to adults for different reasons. Though it brings a few health concerns to the body, this product has been used worldwide by all sorts of demographics for entertainment purposes. 

In 2022, the revenue of tobacco products amounted to USD 914.20 billion, and is expected to grow annually by 2.49% (CAGR 2022-2027). The largest segment for this market would be cigarettes, with a market volume of USD 812.90 billion in 2022. 

Aside from the cigarette industry, there is an innovation allied to the e-cigarette and vape industry which allows consumers to smoke using an electronic device. In 2021, it was valued at USD 18.13 billion and is expected to expand at a compound annual growth rate of 30% from 2022 to 2030. 

Overview of the Cigarette and E-Cigarette Industry in Indonesia

Indonesia has one of the highest smoking rates in the world, and is also considered as one of the biggest producers of cigarettes worldwide. Approximately, there were about 332.1 billion cigarettes consumed in Indonesia, making it the largest consumer of cigarettes in the Asia Pacific region. 

The raw materials required for the manufacturing process of cigarettes are mostly domestically sourced. In addition to that, they also have cheap labor costs which makes the tobacco industry’s production cost low. 

As for the e-cigarette industry, the revenue garnered for this industry reached USD 386.6 million in 2022 and is expected to grow annually by 3.47%. These devices are heat liquid containing nicotine to create an aerosol which can be inhaled by the user. This product could be a substitute for cigarettes as some governments say that these products are healthier than actual cigarettes. 

International Cigarette and E-Cigarette Products that have Penetrated the Indonesian Market

1. Philip Morris – Marlboro

The global brand has been seeing some significant growth from 2011, when it nearly doubled reaching USD 67.5 billion. Finally, in 2020, the brand’s value stood at USD 58.25 billion just to drop another 2% to 57 billion dollars in 2021. Marlboro is owned and produced by Philip Morris and is a company from the United States. In 2019, they were able to ship more than 233 billion units of Marlboro cigarettes worldwide, making it the most popular brand among the company’s other products. 

2. Juul

In 2020, Juul became the leading e-cigarette brand in the United States capturing 42% of the e-cigarette market in that year. They were introduced to the U.S. e-cigarette market by 2015 by a start up. 

Future Prospects for the Cigarette and E-Cigarette Industry

As said before, Indonesia is home to almost 100 million smokers where 33.6% of the adult population and 19.4% of young people are smokers. It is the largest consumer of cigarettes in the Asia Pacific region and will have a positive prospect in the future. In 2018, Indonesia’s tax revenue from tobacco was around IDR 160 billion, which proves that tobacco is one of the drivers for Indonesia’s economic growth. Even with the increase of taxes for smoking products, there has been no significant reduction in smoking rates in Indonesia. 

BRIGHT Indonesia as Your Local Partner

With the constant shift of consumer behavior and demands, it would need a lot of in-depth research about Indonesian B2B e-commerce. Therefore, to enter the Indonesian market, you would need the right local partner to assist you. 

BRIGHT Indonesia is an ideal business partner for you. We will assist you on the ground, including virtual assistants during the mission, logistical planning, and detailed communication. It can cause your company to focus on developing partnership cooperation rather than the hassles of the business trip.

BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:

1. Assist you in expanding and developing your business by identification of potential partners through comprehensive market research regarding client’s request.
2. Secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arranging business meetings, and acting as a liaison.
3. Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
4. Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.

For more information, email info@brightindonesia.net.