Executive Summary

Sep 2019
PROSPECTS
Simplified tax structure and excise tax increases result in slower volume growth

In October 2017, the Ministry of Finance announced new legislation stipulating a further increase in cigarette excise tax of around 10% effective 1 January 2018 and plans to revise the tax structure for cigarettes by reducing the number of excise tax layers from 10 in 2018, to eight in 2019, six in 2020 and then just five in 2021. The excise tax increase in 2018 led to price hikes for many cigarettes brands over the year, especially the mid-priced and economy brands including machine-made kreteks (SKM).

Product launches with new technology are on trend in 2018

Manufacturers launched several new cigarette products with novel technology during 2018. Amongst those were Gudang Garam’s GG Move brand with duo-filter technology; Aroma Bold brand, Nojorono’s first SKM brand; and Bentoel’s Dunhill Fine Cut Mild Ultra with reduced-smell technology.

Tax structure changes may benefit SPM cigarettes, but volumes still set to decline

The simplified tax structure from 2019 to 2021 means that SKM and SPM cigarettes will be taxed at the same layer. This is expected to benefit white cigarettes (SPM) such as Marlboro, as they will pay a lower excise tax compared to machine-made kretek (SKM) cigarette brands such as A Mild.

COMPETITIVE LANDSCAPE
HM Sampoerna maintains its lead despite increased prices and competition

HM Sampoerna continued to lead in cigarettes in 2018, followed closely by Gudang Garam, which was encroaching on the leader’s volume share. Over the year, the performance of Sampoerna brands was mixed.

Innovative launches targeting higher-income young adults boosts KT&G’s share

KT&G Corp is still a relatively small player in cigarettes in Indonesia, but it managed to register robust volume growth in 2018 despite the challenging environment. Its innovative new product launches targeting young adults of legal smoking age from the middle- to upper-income groups prompted a rise in the company’s volume share heading into 2018.

JTI strengthens its foothold in 2018 after its 2017 acquisition of a local player

In 2018, Japan Tobacco International Indonesia PT (JTI) gained a stronger foothold in cigarettes, after acquiring local player Karyadibya Mahardika in August 2017. With the well-known Apache brand under its portfolio, it launched new variants including Apache Exotic and Apache Exotic Menthol.

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Cigarettes in Indonesia

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Overview

Discover the latest market trends and uncover sources of future market growth for the Cigarettes industry in Indonesia with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Cigarettes industry in Indonesia, our research will save you time and money while empowering you to make informed, profitable decisions.

The Cigarettes in Indonesia market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth
  • Production, imports, and exports of finished cigarettes
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Cigarettes in Indonesia?
  • What are the major brands in Indonesia?
  • What is the legislative environment like in Indonesia?
  • What are the rates of cigarette taxation in Indonesia?
  • Do premium, mid-price or economy cigarettes dominate in Indonesia?
  • What is the rate of illicit trade in Indonesia?
  • How many smokers are there in the country?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Tobacco market research database.

Cigarettes in Indonesia - Category analysis

HEADLINES

PROSPECTS

Simplified tax structure and excise tax increases result in slower volume growth
Product launches with new technology are on trend in 2018
Tax structure changes may benefit SPM cigarettes, but volumes still set to decline

COMPETITIVE LANDSCAPE

HM Sampoerna maintains its lead despite increased prices and competition
Innovative launches targeting higher-income young adults boosts KT&G’s share
JTI strengthens its foothold in 2018 after its 2017 acquisition of a local player

TAXATION AND PRICING

Taxation rates
Summary 1 Taxation and Duty Levies 2013-2018
Average cigarette pack price breakdown
Summary 2 Average Cigarette Pack Price Breakdown: Brand Examples

CATEGORY DATA

Table 1 Sales of Cigarettes: Volume 2013-2018
Table 2 Sales of Cigarettes by Category: Value 2013-2018
Table 3 Sales of Cigarettes: % Volume Growth 2013-2018
Table 4 Sales of Cigarettes by Category: % Value Growth 2013-2018
Table 5 Sales of Cigarettes by Blend: % Volume 2013-2018
Table 6 Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2013-2018
Table 7 Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2013-2018
Table 8 Sales of Cigarettes by Pack Size: % Volume 2013-2018
Table 9 Sales of Cigarettes by Price Band: % Volume 2013-2018
Table 10 NBO Company Shares of Cigarettes: % Volume 2014-2018
Table 11 LBN Brand Shares of Cigarettes: % Volume 2015-2018
Table 12 Sales of Cigarettes by Distribution Format: % Volume 2013-2018
Table 13 Illicit Trade Estimate of Cigarettes: Volume 2013-2018
Table 14 Forecast Sales of Cigarettes: Volume 2018-2023
Table 15 Forecast Sales of Cigarettes by Category: Value 2018-2023
Table 16 Forecast Sales of Cigarettes: % Volume Growth 2018-2023
Table 17 Forecast Sales of Cigarettes by Category: % Value Growth 2018-2023
Table 18 Forecast Sales of Cigarettes by Blend: % Volume 2018-2023
Table 19 Forecast Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2018-2023
Table 20 Forecast Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2018-2023
Table 21 Forecast Sales of Cigarettes by Pack Size: % Volume 2018-2023
Table 22 Forecast Sales of Cigarettes by Price Band: % Volume 2018-2023

Tobacco in Indonesia - Industry Overview

EXECUTIVE SUMMARY

Value sales increase in every category, but tax and price hikes slow the volume
Heated tobacco devices and heated tobacco taking off in 2018
Most leading players retain top positions despite increased competition
Traditional distribution channels strong but modern retailers and internet retailing are gaining share
Excise taxes will impact value and volume growth in different ways

OPERATING ENVIRONMENT

Legislation
Legislative overview
Summary 3 Legislation Summary at a Glance
Minimum legal smoking age
Smoking prevalence
Tar levels
Health warnings
Plain packaging
Advertising and sponsorship
Point-of-sale display bans
Smoking in public places
Flavoured tobacco product ban
Vapour products

MARKET INDICATORS

Table 23 Number of Adult Smokers by Gender 2013-2018

MARKET DATA

Table 24 Sales of Tobacco by Category: Volume 2013-2018
Table 25 Sales of Tobacco by Category: Value 2013-2018
Table 26 Sales of Tobacco by Category: % Volume Growth 2013-2018
Table 27 Sales of Tobacco by Category: % Value Growth 2013-2018
Table 28 Forecast Sales of Tobacco by Category: Volume 2018-2023
Table 29 Forecast Sales of Tobacco by Category: Value 2018-2023
Table 30 Forecast Sales of Tobacco by Category: % Volume Growth 2018-2023
Table 31 Forecast Sales of Tobacco by Category: % Value Growth 2018-2023

DEFINITIONS

SOURCES

Summary 4 Research Sources