Tag: KT&G

The reaction to the demonstration of this consumer preference was interesting and far reaching. For instance, KT&G established a “Smell Care Center” in 2019 to develop technology that could reduce the smell of tobacco smoke on the breath, hands and clothes of smokers. And the upshot of such developments was that manufacturers started to launch on South Korea’s market combustible cigarettes that, like those available in Japan for many years, created less smell than did traditional cigarettes. KT&G alone has seven what it calls “smell-down” cigarettes on the market.

So here was a case of the present, in the form of new-generation products, affecting products many people would have said had been consigned to the past. Whether this is progress or regression I shall leave for readers to decide, along with the questions it raises about how consumers view risks and weigh them against perceived benefits. But what is not in question is that the popularity of these newly reinvigorated combustible cigarettes put a dent in the advance of HnB products.

HnB devices were first introduced to South Korea’s market with the launch of Philip Morris International’s IQOS in June 2017, from which time the HnB sector quickly expanded during the next two years as British American Tobacco and KT&G launched their own HnB devices, Glo and Lil, respectively, and many smokers switched fully to HnB products or became dual users of combustible cigarettes and HnB products.

But this rapid expansion of the HnB sector was slowed by the success of the reduced-smell combustible cigarettes and by the introduction of government taxation and other policies that led to the prices of HnB sticks and combustible cigarettes, and the regulations governing them, being almost aligned. And, ironically, it was only with the arrival last year of the Covid-19 pandemic that the HnB sector started to recover from this setback, a recovery that was possibly caused in part by people spending more time indoors. In any case, at the beginning of this year, the HnB sector had increased during the previous few months by about three or four percentage points to take it to where it was accounting for about 15 percent of the overall tobacco and nicotine market.

You can look at this 15 percent figure from a glass half-full or half-empty perspective, but manufacturers seem to be plumping for the former. While acknowledging that 15 percent is a reasonably small share of the overall market, KT&G, for instance, perceives it as pointing to a huge opportunity, and an opportunity that will be realized in part because of a growing focus on tobacco control worldwide. Consequently, manufacturers are putting major efforts into supporting the HnB sector as is evidenced by KT&G, which, since 2017, has launched seven different Lil device variants and 19 different Fiit and Miix consumables, which are the tobacco sticks used with its HnB devices.