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RELX Indonesia: Market Expansion and Localization

Agustus 07, 2023

relx

On August 3rd, the IEICE Jakarta e-cigarette exhibition officially began. As the official media partner of this IECIE event, 2FIRSTS went deep into the venue, focusing on in-depth interviews with key exhibitors and promptly reporting firsthand market information obtained at the exhibition.

 

At the IECIE Indonesia Jakarta e-cigarette exhibition, 2FIRSTS conducted an exclusive interview with Yudhistira Eka Saputra, General Manager of RELX Indonesia (hereinafter referred to as "Yudhi"). As one of the early entrants into the Indonesian market, RELX has gained significant influence locally. How did RELX expand its market in the early stages? What is its marketing strategy in the local market? Furthermore, what are its future market plans?

 

Layout in First-tier Cities 

Yudhi stated that in the initial phase, the company focused on identifying the target audience and determining the target cities through user segmentation. Rather than expanding its presence in all cities in Indonesia, the company strategically focused on establishing a strong presence in major cities and metropolitan areas.

 

According to Yudhi, choosing the right city is crucial. First-tier cities have stronger consumer purchasing power. Additionally, the population size and influence of a city are also determining factors in the selection process. For example, cities such as Jakarta and Bali, known for their strong consumer capacity, are the target cities for the company.

relx

In terms of marketing and promotion, Yudhi stated that initially RELX products were primarily promoted online to attract users and open up the market. However, Yudhi further added that RELX's focus on offline stores has not changed. While the company relied on online exposure in its early stages, it later allocated resources to offline retail stores for further development.

 

Currently, RELX is also engaging in offline advertising in local cities where it is legally permitted to connect consumers with their products during the marketing process.

 

Market segmentation by differentiated product categories

RELX, the popular e-cigarette brand, has recently introduced a new disposable e-cigarette brand called "WAKA" in Indonesia. This move marks a significant departure from its existing pod system products, creating a distinct category difference. Additionally, the two product lines have also attracted different user demographics.

 

Yudhi revealed that RELX can refine its market target audiences through the introduction and iteration of different product categories. He gave an example that among young people, college students tend to prefer disposable e-cigarettes, while young professionals who are already working mostly opt for refillable e-cigarettes.

 

When asked about the Indonesian consumers' preferences in terms of taste, Yudhi stated that watermelon and taro ice cream flavors are highly popular in the Indonesian market. He himself is also involved in the testing process prior to launching new flavors, and Yudhi and his team at the subsidiary company adhere to a direction that respects localization in e-cigarette flavors.

 

How are these RELX brand stores managed in most commercial shopping centers in Indonesia?

 

Yudhi stated that they delegate the management authority of local stores to salesmen in order to make them more flexible and adaptable to market changes during the sales process. They will report these situations to the headquarters and obtain more market feedback.

 

E-liquid products are being introduced for the first time in our local market

On July 27th, RELX launched its e-liquid products in the Indonesian market. This move marks RELX's entry into a new realm in Indonesia, however, it is not their first attempt in the country.

 

In the recent past, RELX, as one of the first e-cigarette companies to enter Indonesia, was attracted by the country's massive population size and number of smokers. According to Macromicro data, Indonesia has a population of approximately 264 million (ranking first among the six Southeast Asian countries), with a median age of 30.

 

The current development of RELX indicates that this move has been the right one as Indonesia has provided the desired market for RELX, becoming a strong base for its global branding. Indonesian e-liquid companies have deep roots in the local e-cigarette industry, which predominantly focuses on open-system refillable products. RELX has also recognized the opportunities within this market.

 

Yudhi has expressed that the e-liquid is priced at only 110,000 Indonesian rupiah per 30 milliliters (approximately 52 yuan), which is significantly cheaper than pod prices. This means that any brand of refillable e-cigarette can use RELX's e-liquid, offering consumers a greater range of options.

It is worth noting that RELX's e-liquid is manufactured domestically in China and does not partner with local e-liquid companies. When asked about the reason by 2FIRSTS, Yudhi stated that Chinese e-liquid meets higher standards and is in line with RELX's quality criteria for such products.

 

"When opening a store, it is crucial to have a strong influence, and not promote zero-nic products"

When asked about RELX's future market development direction, Yudhi stated that the company will continue to plan according to market feedback and abide by local government regulations. For instance, in countries like the Philippines where there are no policy restrictions, the company may introduce high-capacity e-cigarettes.

 

Yudhi remains optimistic about the future e-cigarette market. They currently have their own independent website to serve customers and increase their positive perception of the RELX brand. When asked about RELX's biggest challenge in the future, Yudhi once again emphasized the significance of store location. They focus on selecting areas with a large population base and a consumer-oriented demographic, as well as areas with the greatest potential for reaching a wide audience. Geographical factors can determine the foot traffic and future profitability of physical brick-and-mortar stores.

 

In conclusion, 2FIRSTS raised questions about Yudhi regarding the absence of "zero nicotine" products from RELX in Indonesia. He clarified that there are no plans for the company to introduce such products in the future because smoking is primarily about seeking nicotine.



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