The Evolving Vape Market in Indonesia: Insights and Future Directions

Indonesia, with a population of approximately 280 million, stands as the fourth most populous country globally and a major player in Southeast Asia, accounting for about 40% of the region’s population. Notably, it also ranks among the countries with the highest smoking rates and is one of the largest tobacco producers worldwide. This backdrop provides a unique context for the vape industry, which has been legal and growing steadily since the early 2010s.

Industry Overview

Growth and Legalization

The Indonesian vape market took off around 2012, with significant legal strides made in 2018 when the government imposed a 57% tax on vape liquids, effectively legalizing the production and sale of e-cigarettes. Since then, the market has been expanding at an impressive annual growth rate of 50%, according to Garindra Kartasasmita, the secretary-general of the APVI, at the IECIE vape expo.

Local Production Dominance

A striking feature of the Indonesian vape market is its high level of local production. Rifqi Habibie Putra, co-founder and vice-president of the Indonesian Vape Retail Association, revealed in an interview with the South China Morning Post that nearly 90% of vape liquids sold in Indonesia are locally produced. This preference is largely due to the favorable perception of local products, which are thought to better match local consumer tastes and are more cost-effective due to lower import taxes.

Taxation and Regulation

The start of 2024 saw the introduction of an additional 10% tax on e-cigarettes, signaling a move towards stricter regulations. Further regulatory frameworks are expected to be announced later in the year, aimed at creating a balanced business environment.

Market Dynamics

Product Categories and Consumer Preferences

Indonesia’s vape market is diversified in terms of product offerings:

  • Vape Devices (DIY Big Smoke): Preferred by long-term users, accounting for more than 25% of the market.
  • Pod Devices (Refillable Small Vape): The most popular, making up about 70% of the market.
  • Closed Systems (Including Disposable and Cartridge-Based): Less favored, representing less than 5% of the market.

Distribution and Sales Channels

The Indonesian vape market relies heavily on both online and offline sales channels, each holding about a 50% share. Despite restrictions due to Google’s policies, platforms like Shopee and Tokopedia facilitate significant online sales. Offline, the engagement through vape shops and retail stores remains robust, supported by community-driven marketing and promotions.

Marketing Strategies

Key promotional strategies include leveraging YouTube reviewers and Instagram influencers, who play a crucial role in shaping consumer preferences and driving sales.

Challenges and Opportunities

Resistance to Disposables

Unlike some of its Southeast Asian neighbors, the Indonesian market shows considerable resistance to disposable e-cigarettes, primarily because they offer no recurring sales of vape liquids or parts—a key revenue stream for retailers.

Future Trends

The market’s inclination towards pod devices is expected to continue in the near future. However, there is a growing call within the industry to promote more sustainable practices and higher-quality offerings, which could reshape future market dynamics.

Impact of New Taxation

The recent tax increase has led to price adjustments, which could either push up retail prices or force retailers to absorb some of the costs. This economic pressure may drive further innovations in the market or adjustments in supply chain and pricing strategies.


As Indonesia continues to evolve its regulatory framework for vaping, the market is poised for further changes. The country’s unique position as a significant player in both the global tobacco and vape markets provides a fertile ground for growth and innovation, with local production and robust market dynamics driving its expansion. As new laws come into play, stakeholders from manufacturers to retailers will need to adapt to continue thriving in this vibrant market.


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