Introduction To Two Operating Modes Of Indonesia's Electronic Cigarette Industry

Last year, when it comes to the Indonesian e-cigarette market and industry, many people were blind eyed, with factories, certificates, sales, suppliers, and so on all in a mess, unsure where to start. But by this time of year, there are already some operational models for reference, and everyone can feel the stones and cross the river.

Mode 1: Establishing a factory on site, early route, high investment, and winning through self control

This route is achieved through practical resources, which require searching for relevant local resources, renting factories, hiring people, obtaining relevant qualifications, and a series of operations. It requires both a large investment of funds and a certain amount of manpower and material resources.

Due to the large investment, many small and medium-sized enterprises have turned their backs on the Indonesian market. Many large factories with resources, either under pressure from customers or attracted by Indonesian tax policies, have already invested and built factories in Indonesia, such as Simore, Jinjia, Meishenwei, Changhan, Honeycomb Factory, etc.

Although there is a large investment in local factories, the victory lies in the independent control of the factories, and some resourceful enterprises still prefer this route. In addition, unlike the early days of information non circulation, there have also been some professional consulting agencies that can help companies quickly land.

A local certification agency based in Indonesia stated that with the tightening of Indonesian e-cigarette policies, it will become increasingly difficult to enter the Indonesian e-cigarette market in the future, and its agency can help enterprises quickly land, establish factories, and obtain relevant qualifications.

Mode 2: Indonesian small groups, emerging routes, low investment, victory in speed and flexibility

There are some differences in the operation of different people on the route of Mode 2.

Some are team aggregates, which bring together companies responsible for different functions such as logistics, e-commerce, and production to provide customers with a one-stop solution.

Some offer a local enterprise that integrates production and sales, and brands can leverage their enterprise to achieve overseas production and sales of their own products. From this perspective, it resembles the role of a OEM factory, but it is not purely a OEM factory.

To sum up, in Mode 2, overseas enterprises do not need to directly invest in building factories, but rely on local overseas factory resources to achieve product production and sales. This is similar to borrowing chicken to lay eggs, and holding a group for heating is the core of its operation.

Obviously, Mode 2 is more suitable for small and medium-sized enterprises to go overseas.