KT&G Renews Existing Products...Discontinues Unpopular Items
Cigarette Sales Decline, Heated Tobacco Product Sales Increase
Demand for Traditional Tobacco's Unique Impact Remains...Gradual Decrease Expected
[Asia Economy Reporter Eunmo Koo] As the tobacco market gradually shifts to electronic cigarettes, which produce no additional cigarette butts and have less odor, traditional combustible cigarettes are disappearing from the market. The trend toward preferring a lighter and cleaner taste over the strong smell and heavy sensation unique to combustible cigarettes has led to the discontinuation of unpopular products.
According to industry sources on the 6th, KT&G has discontinued a total of 12 types of combustible cigarettes over the past three years. In 2019, four products including ‘Esse Special Gold Ocean’ were discontinued; in 2020, five products including ‘Raison Presso 1mg’; and last year, three products including ‘Simple Ace 5mg’ were discontinued.
With the growth of the tobacco market stagnating due to smoking cessation policies and increased sensitivity to odors, it is understood that discontinuations are mainly occurring among unpopular combustible cigarettes.
A KT&G representative explained, "To operate the brand portfolio efficiently, we have been renewing existing products and discontinuing unpopular ones," adding, "From 2019 to last year, we launched 14 new products including 88 Returns and Esse Change Himalaya."
Sales of combustible cigarettes have been steadily declining. According to the ‘2021 Tobacco Market Trends’ report released by the Ministry of Economy and Finance, sales of combustible cigarettes, which were around 4.3599 billion packs in 2014, dropped to 3.4447 billion packs in 2017 when electronic cigarettes were introduced, and further decreased to 3.1462 billion packs last year.
The reduced sales of combustible cigarettes have been replaced by electronic cigarettes. Sales of heated tobacco products reached 444.1 million packs last year, a 17.1% increase compared to 379.3 million packs the previous year. As electronic cigarettes are considered relatively less harmful to the body and produce less odor, the growth trend of the electronic cigarette market is expected to continue for the time being. Market research firm Euromonitor predicted that the heated tobacco product market will grow from 37 trillion won this year to 50 trillion won by 2024, recording an average annual growth rate of 16%.
The combustible cigarette market is expected to shrink gradually not only due to differences in odor and convenience of use but also for public health reasons. However, since there remains demand for the unique impact of tobacco smoke, the number of discontinued combustible cigarette products is not expected to increase sharply. An industry insider said, "Traditional cigarettes will disappear in the long term," but added, "There are still many people who seek combustible cigarettes, and renewals according to trends are inevitable, so they will not disappear in the short term."
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