Japan Tobacco International (JTI), the worldâs third-largest tobacco company by sales volume, plans to build a strong foundation in Indonesia as it attempts to get a foothold on the market
apan Tobacco International (JTI), the world's third-largest tobacco company by sales volume, plans to build a strong foundation in Indonesia as it attempts to get a foothold on the market.
Udo Freeman, general manager of JTI Indonesia, saw Indonesia's population size as a big opportunity for JTI, along with the growing demand for quality products and services.
According to JTI market research, Indonesia, which is among the top four markets for tobacco products in Asia, will approximately sell 300 billion cigarettes in 2013.
The company believed that Indonesian consumers would continue to demand high quality consumer products, Freeman said on Wednesday.
Although the tobacco market is still dominated by kretek or clove-blended cigarettes by 93 percent, JTI Indonesia is optimistic about expanding its presence in the white cigarette market.
'Our findings also suggest that tobacco products are culturally accepted among 60 percent adult males,' said Freeman.
JTI considered Indonesia, with approximately 250 million inhabitants, among the largest markets in Asia. That is why, he went on, JTI would like to increase its brand awareness in Indonesia.
Freeman said that the company was focusing on a-step-by-step approach to gradually increase its market share in Indonesia. 'We will see where things go in 5-10 years,' he said, adding that less than 1 percent of cigarettes produced in its Malaysian factory were imported to Indonesia.
Analyzing the market, Freeman described Indonesia's market as fragmented, where the number of retailers and outlets were enormous.
'Competing in a fragmented market, plus competition from established markets, is challenging enough,' said Freeman, referring to Philip Morris International's Marlboro brand and British American Tobacco's Dunhill.
Rory Morgan, strategy and development manager of JTI Indonesia, said that competition in Indonesia's tobacco market was going to get tougher.
Morgan said that while developing local employees, JTI Indonesia would continue to enhance and sharpen operational capabilities.
'JTI's portfolio already includes some of the most prominent brands in the world, including Mild Seven, which is moving forward with a new brand named Mevius', said Morgan.
Morgan said that JTI Indonesia would invest in brand building in targeted areas such as Jakarta, Bandung, Surabaya and Bali. (asw)
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