Juul Labs Forays Into Indonesia, the World’s Second-Largest Market for Smokers

(Bloomberg) -- Juul Labs Inc. began selling its electronic cigarette products in Indonesia in partnership with a distributor known for selling Apple Inc.’s iPhones as it widens its presence in Asia.

• Juul, which controls more than two-thirds of the U.S. e-cigarette market, will sell Indonesian smokers its devices and pods through PT Jagad Utama Lestari, a unit of PT Erajaya Swasembada.

Key Insights

• Juul’s entry into Indonesia is its most ambitious foray in Asia yet. Indonesia is one of the world’s largest markets for cigarettes and known for the variety of clove cigarettes it produces. The market is dominated by cigarette makers PT Hanjaya Mandala Sampoerna, a Philip Morris International Inc. unit, PT Gudang Garam and PT Djarum.
• Tobacco smokers make up 35% of Indonesia’s 264 million population, according to the World Health Organization. Southeast Asia’s largest economy also ranks as the world’s second-largest in terms of the number of cigarettes sticks sold, behind China.
• Juul has an ambitious strategy to enter every Asian market but it faces regulatory hurdles in key countries like Japan and India.

Market performance

• Shares of Erajaya, which have rallied more than 50% since the Juul tie-up was first reported on June 24, were up 8.7% by the midday trading break in Jakarta.

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• Jakarta will soon have two stores for Juul products, the companies said in a joint statement on Wednesday. Its device and pods will also be sold at select convenience stores, vape stores and food and beverage outlets in Indonesia.
• Read about Juul’s troubles in the U.S. here

To contact the reporter on this story: Tassia Sipahutar in Jakarta at ssipahutar@bloomberg.net

To contact the editors responsible for this story: Rachel Chang at wchang98@bloomberg.net, Thomas Kutty Abraham, Bhuma Shrivastava

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