Snowplus Enters Indonesia

Snowplus Technology has officially expanded domestically and established PT Snowplus Technology Indonesia this year. Snowplus plans to establish production facilities after observing the demand in the national vaporizer (vape) industry.

Snowplus is a closed-system vape industry player. In other words, consumers must purchase new cartridges rather than refill vape liquid when replenishing.

"We see that the trend of vape consumption has not been fully adopted in Indonesia, but globally we see a growing trend in vape consumption. Meanwhile, we observe a decline in cigarette consumption," said Asia Growth Lead Snowplus David Cheong on Monday (11/16/2020).

David stated that his company is not aiming for growth in Snowplus sales domestically. Snowplus aims to increase consumer literacy regarding vape products and help formulate a regulatory framework for the national vape industry.

David stated that his company would assist in formulating a more equitable excise tax calculation for the vape industry, particularly for closed-system vapes. David believes that the current excise tax for closed-system vape products is much more expensive than other nicotine products.

As is known, an average cigarette has an excise tax of approximately IDR 1,700. Meanwhile, the excise tax for vape liquid with pure nicotine and 30 milligrams of nicotine salt is approximately IDR 666.67 each.

Meanwhile, the excise tax for closed-system vape liquid reaches IDR 30,000 per milliliter. In other words, the excise tax for closed systems is up to 50 times higher than that for open-system vapes and 18 times higher than for cigarettes.

"The excise tax framework in Indonesia is influenced by politics and economics. All stakeholders need to discuss this. We anticipate being able to contribute to drafting the excise tax framework for the vape industry," he said.

In the near future, David said his company would target tier I cities. According to him, this is because literacy in tier I cities is already sufficient regarding nicotine products, making it easier to transition from conventional cigarettes to vapes.

APVI's Welcome to Snowplus

The Indonesian Personal Vaporizer Association (APVI) welcomes the arrival of PT Snowplus Technology Indonesia in the domestic vaporizer (vape) market.

Snowplus is a closed-system vape manufacturer, meaning consumers must purchase an entire cartridge if they wish to refill. Snowplus is one of the 20 largest vape players in China, with approximately 100,000 distribution stores spread out.

"We hope that anyone participating in Indonesia will help grow the Indonesian vape market. We are ready to work hand in hand with all parties," said APVI Secretary-General Garindra Kartasasmita on Wednesday (11/18/2020).

Garindra revealed that the market share for closed-system vapes only reaches 5 percent, while the rest is dominated by open systems. However, open-system vapes are a gateway for new vape users.

Therefore, Garindra believes that the closed-system vape industry needs strong support from all parties. This is because closed-system vape players are the most affected, as shown by JUUL Labs' exit from the national market.

"Next year, I think it will be much better for all [vape players in the country], including closed systems," he said.

In addition, Garindra stated that his company would encourage the production of vape liquid manufacturers in 2021. According to him, this will encourage vape liquid producers to innovate towards regional characteristic flavors in the country.

In agreement, Snowplus Co-Founder Derek Li said Snowplus' strategy in target countries is to localize flavors. So far, Snowplus has expanded to eight countries, namely China, the United States, Canada, the United Kingdom, Russia, South Korea, Malaysia, and Indonesia.

"In Malaysia and Canada, we always source local vape liquids and collaborate to bring consumers flavors that are more familiar and preferred," he said.

Derek said the company plans to build production facilities in the future. However, for now, Snowplus will continue to assess the demand for closed-system vape products.

On the other hand, Derek stated that his company would contribute to the creation of the Indonesian National Standard (SNI) for Vape Liquid Production in 2021. According to him, one of the contributions will be sharing Snowplus' production stages, which number 28 stages.

As is known, the discussion and publication of SNI for vaporizers will become effective in 2021. After the SNI is published, manufacturers and the Ministry of Industry will then discuss production recommendations or good manufacturing practices (GMP) for both the vaporizer system and liquid.