Tobacco in 2024: The big picture
Tobacco in Indonesia was negatively influenced by weak private consumption in 2024, which forced consumers to economise. The rising cost of living and inflationary pressures squeezed disposable incomes forcing consumers to trade down from mid-priced to economy cigarettes. Unit price growth slowed in comparison to recent years, supporting a return to overall volume growth, albeit only marginal. Smoking alternatives continue to gain appeal due to the wider choice of products and lower prices. Tobacco heating devices have decreased in price at a time when consumers are seeking out more affordable options.
2024 key trends
Cigarette volume sales witnessed another consecutive year of decline in 2024, although the contraction was less pronounced than in 2023. New tax hikes on legal cigarettes drove consumers towards cheaper options, including those on the black market. The downtrading trend seen within legal cigarettes was not only driven by consumer demand for more affordable tobacco but also supply limitations. Incumbents prioritised the manufacturing of cheaper products like economy cigarettes in order to sustain healthy turnover.
Competitive landscape
HM Sampoerna Tbk PT (Philip Morris International Inc) retained its lead in 2024, although the company witnessed a slight contraction in volume share as Djarum PT strengthened its position. Djarum’s strong performance was driven by gains in the premium and economy segments, such as the economy line Djarum Coklat. Overall, HM Sampoerna Tbk maintains its leadership due to its legacy cigarette brands in premium and economy segments, alongside its diversification into vapes with the launch of VEEV in the second quarter of 2024.
Retail developments
Small local grocers consolidated their lead in the distribution of tobacco over 2024. Convenience stores have made some gains due to the expansion of new outlets particularly in suburban and rural areas. Retail e-commerce was the most dynamic channel in terms of value sales in 2024, albeit from a low base. The revised minimum smoking age from 18 to 21 years in mid-2024, provided some benefits to e-commerce as smokers under 21 years turned to e-commerce for some tobacco purchases. With the introduction of age verifications online, it is easier for young adults to bypass age verifications online rather than in-person in physical retailers.
What next for tobacco?
In the face of ongoing economic uncertainty in Indonesia, both consumers and manufacturers will prioritise affordability and cost-efficiency. In the cigarette category, lower tax rates are driving incumbents to focus on hand-rolled kreteks (SKT) over machine-made alternatives, often through acquisitions of smaller SKT producers or the expansion of SKT portfolios, fuelling growth in the economy segment. In e-vapour products, open vaping systems are projected to perform well over the forecast period due to their lower taxes per ml, making them an affordable option for consumers, despite steep year-on-year price increases driven by regulatory price levelling efforts.
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Overview:
Understand the latest market trends and future growth opportunities for the Tobacco 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.
Data and analysis in this report provides further detailed coverage dedicated to the following key categories, where applicable:
- Cigarettes
- Cigars, Cigarillos and Smoking Tobacco
- Smokeless Tobacco, E-Vapour Products and Heated Tobacco
If you're in the Tobacco industry in Indonesia, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
The Tobacco in Indonesia report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volume and value sizes, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent research methodology, conducted in-country
This report answers:
- What is the market size of Tobacco in Indonesia?
- Which are the leading brands in Tobacco in Indonesia?
- How are products distributed in Tobacco in Indonesia?
- Which category is the most heavily taxed in Indonesia?
- How is the operating environment for Tobacco changing?
- What are the current legislative restrictions applicable to the sale of Tobacco products in Indonesia?
- How has COVID-19 impacted demand?
- How have national lockdown and enforced home seclusion following COVID-19 impacted sales?
- Where is future growth expected to be most dynamic?
Tobacco in Indonesia
Tobacco in 2024: The big picture
2024 key trends
Competitive landscape
Retail developments
What next for tobacco?
Legislation
Legislative overview
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
DISCLAIMER
Cigarettes in Indonesia
KEY DATA FINDINGS
Retail volume sales contract but economy segment shows promise
Djarum PT strengthens position as HM Sampoerna Tbk PT remains leader
Convenience stores gain share as outlets expand
Tax structure to fuel growth of economy segment over the forecast period
Flavoured cigarettes faces some challenges
Innovation will be shaped by new legislative agenda
Taxation rates
Cigars, Cigarillos and Smoking Tobacco in Indonesia
KEY DATA FINDINGS
Strong performance but slightly lower rates of growth
Leading companies strengthen their position
Convenience stores widen accessibility
Steady outlook for overall category
Opportunity to capitalise on exemption from new tar and nicotine limits
Future growth is contingent on strengthening appeal and widening the consumer base
Smokeless Tobacco, E-Vapour Products and Heated Tobacco in Indonesia
KEY DATA FINDINGS
Heated tobacco outperforms e-vapour products
Competition heightens in e-vapour products but consolidation prevails in heated tobacco
Convenience stores gain in both vapes and heated tobacco
Heated tobacco and open system vapes to drive overall category growth
Regulatory compliance to impact future industry developments
New flavours and experiences combined with improvements to portability remains key to innovation
The following categories and subcategories are included:
Tobacco
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- Fine Cut Cigarettes
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- Cigarettes (Illicit+Legal)
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- Cigars
- Cigarillos
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- Pipe Tobacco
- Fine Cut Tobacco
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- Chewing Tobacco
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- Loose US-Style Moist Snuff
- Portion US-Style Moist Snuff
- Swedish-Style Snus
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- Closed System Single Use
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- Closed System Rechargeable (including starter kits)
- Closed System Cartridges
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- Open Vaping Systems Charging and Vapourising Devices
- E-liquids
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- Tobacco Heating Devices
- Heated Tobacco
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- Nicotine Pouches
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- Closed System Single Use (Illicit+Legal)
- Closed System Cartridges (Illicit+Legal)
- E-Liquids (Illicit+Legal)
Tobacco
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
See all of our definitionsWhy buy this report?
- Gain competitive intelligence about market leaders
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This report originates from Passport, our Tobacco research and analysis database.
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