The consumption of cigarettes in Indonesia remained high in 2021, and even saw a return to volume growth in this year, after a difficult 2020. With the stresses of daily life exacerbated by the pandemic, and with more time still spent at home, consumers had more opportunity to smoke compared with pre-pandemic.
Nearly all players in cigarettes saw more positive volume performances in 2021 compared with 2020, returning to growth despite increasing taxes. The sales growth of the leading players was due to the overall rise in demand for cigarettes.
Street vendors still accounted for the highest share of volume distribution of cigarettes in Indonesia in 2021. Located at the roadside, these small kiosks are very accessible for consumers.
The government increased the Tobacco Products Excise by an average increase of 12% from 1 January 2022. The reasoning behind this is to reduce tobacco consumption for health reasons, as well as increase state revenues for the supervision of excisable goods.
With prices of cigarettes increasing, and the acceleration of health and wellness awareness due to the pandemic, an increasing number of smokers are expected to shift to e-vapour products. These may be a cheaper alternative in the longer term, especially if considering open vaping systems, and are also considered to be healthier than smoking cigarettes.
Despite the continued increases in taxation on cigarettes and other tobacco products in Indonesia, the regulatory bodies are still seeing a rise in the number of manufacturing facilities in the country. Indeed, there was an increase in the number of manufacturing units in some regions in Indonesia in 2021, such as Kudus and Jepara, where manufacturing facilities increased by approximately 43% in early 2021, reaching 114.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Indonesia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).See All of Our Definitions
This report originates from Passport, our Cigarettes research and analysis database.
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