Tobacco in South Korea
Euromonitor International's Tobacco in South Korea market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
Buy online to access strategic market analysis and an interactive statistical database of duty paid retail volume and value sales, illicit trade volume, company and brand shares, pricing, distribution and production data.
Tables: 70 | Publication date: Nov 2008
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Cigarettes; Cigarettes including RYO; Cigars; Smoking tobacco
Executive summary
Volume growth continued in 2007
Volume and value growth of cigarettes continued in 2007 for the second consecutive year despite the decreasing smoking population. Volume growth is however considered temporary as a result of stockpiling in anticipation of a price hike; reinforced crackdown of illicit trade and smoking habits influenced by the economic climate. It is also possible that smokers unconsciously smoke more frequently after switching to low-tar cigarettes out of concern for their health. State-controlled prices of cigarettes have been unchanged since December 2004, so another round of price increases has been expected since 2007.
Premium cigarettes increase
A series of premium cigarettes were launched in 2007 as part of the effort to cope with increased competition among tobacco manufacturers and to cater to the diversified needs of smokers. In addition to advocacy of low tar levels, these premium cigarettes are characterised by the use of high quality tobacco leaves, a mixture of cigar leaves, a less “smokey” smell and distinguished pack design. The efforts to differentiate cigarettes through increasing prices have not paid off because consumers are price-conscious. It is likely that consumers do not pay much attention to the features of cigarettes unless they themselves prefer the flavour and feel of them.
A new entry signals further competition
The local tobacco industry is led by KT&G, British American Tobacco, Philip Morris and JT International while KT&G held the lion’s share again in 2007. In January 2008, Woori Tobacco Corp officially entered the market by launching its Wigo branded products. Since the tobacco liberalisation in 2001, a few companies have released cigarettes processed abroad on an OEM basis, but Woori Tobacco is the first Korean manufacturer after KT&G, the former government tobacco monopoly. Woori Tobacco is armed with its own production facility based in Korea and aims to gain a firm foothold in the country by 2009. Thus the competition among manufacturers is expected to further grow over the forecast period.
Market share of foreign brands steadily increasing
Three multinational tobacco manufacturers see their volume shares increase year after year albeit at a slow pace. The growth of foreign brands came under the spotlight considering moderate production capacity, limited varieties and more importantly the lack of retailing presence. Those foreign brands have not spread across the entire nation because they are mostly distributed through convenience stores and such outlets are based in urban areas. However, consumer preference for foreign brands is growing especially among young smokers. Specialised taste and brand image seem to be the key to the success of foreign brands, particularly, among those in their 20s and 30s, the largest segment of the total smoking population.
Negative volume growth is forecast
Growing awareness of the adverse health effects of smoking and legal intervention to ban smoking in public places could prompt more smokers to quit the habit. It is however possible that the decrease in the overall smoking population is offset by increased smoking among individual smokers. It is therefore estimated that volume growth will decline at a slow pace. Survey results report a high quitting rate among the older generation, reflecting their concerns over health, but a lower quitting rate in younger people. It is likely that young people smoke to cope with the stresses of daily life and that smoking has become habitual. While negative volume growth is forecast, a new range of products that deviates from ultra low tar cigarettes will hit the market to off-set the possible cooling trend towards ultra low tar products, strengthened legislation and the diversified needs of smokers related to health concerns, flavours and image.
Table of contents
TOBACCO IN SOUTH KOREA : MARKET INSIGHT
EXECUTIVE SUMMARY
Volume growth continued in 2007
Premium cigarettes increase
A new entry signals further competition
Market share of foreign brands steadily increasing
Negative volume growth is forecast
OPERATING ENVIRONMENT
Smoking Prevalence
Table 1 Smoking Prevalence in Population 2002-2007
Table 2 Number of Smokers by Gender 2002-2007
Death by Cause
Legislation
Legislation: Korean law
Litigation
Taxation and Duty Levies
Table 3 Taxation and Duty Levies
Table 4 Average Cigarette Pack Price Breakdown : Brand Examples
Production/Imports/Exports
Table 5 Trade Statistics – Cigarettes
The Role and Effect of Cannabis/Marijuana
MARKET INDICATORS
Table 6 Deaths by Diseases of the Respiratory System 2002-2007
Table 7 Deaths from Heart Disease 2002-2007
Table 8 Deaths from Lung Cancer 2002-2007
Table 9 Illicit Trade Estimate 2002-2007
MARKET DATA
Table 10 Sales of Tobacco by Sector: Volume 2002-2007
Table 11 Sales of Tobacco by Sector: Value 2002-2007
Table 12 Sales of Tobacco by Sector: % Volume Growth 2002-2007
Table 13 Sales of Tobacco by Sector: % Value Growth 2002-2007
Table 14 Sales of Cigarettes by Distribution Format: % Analysis 2002-2007
Table 15 Forecast Sales of Tobacco by Sector: Volume 2007-2012
Table 16 Forecast Sales of Tobacco by Sector: Value 2007-2012
Table 17 Forecast Sales of Tobacco by Sector: % Volume Growth 2007-2012
Table 18 Forecast Sales of Tobacco by Sector: % Value Growth 2007-2012
DEFINITIONS
Summary 1 Research Sources
LOCAL COMPANY PROFILES - SOUTH KOREA
BRITISH AMERICAN TOBACCO KOREA LTD - TOBACCO - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 2 British American Tobacco Korea Ltd: Key Facts
COMPANY BACKGROUND
PRODUCTION BY FACTORY
COMPETITIVE POSITIONING
Summary 3 British American Tobacco Korea Ltd: Competitive Position 2007
JT INTERNATIONAL KOREA INC - TOBACCO - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 4 JT International Korea Inc: Key Facts
COMPANY BACKGROUND
PRODUCTION BY FACTORY
COMPETITIVE POSITIONING
Summary 5 JT International Korea Inc: Competitive Position 2007
KT&G CORP - TOBACCO - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 6 KT&G Corp: Key Facts
Summary 7 KT&G Corp: Operational Indicators
COMPANY BACKGROUND
PRODUCTION BY FACTORY
Summary 8 KT&G Corp: Production Statistics by Brands 2005-2007
COMPETITIVE POSITIONING
Summary 9 KT&G Corp: Competitive Position 2007
PHILIP MORRIS KOREA INC - TOBACCO - SOUTH KOREA
STRATEGIC DIRECTION
KEY FACTS
Summary 10 Philip Morris Korea Inc: Key Facts
COMPANY BACKGROUND
PRODUCTION BY FACTORY
COMPETITIVE POSITIONING
Summary 11 Philip Morris Korea Inc: Competitive Position 2007
CIGARETTES IN SOUTH KOREA
HEADLINES
TRENDS
Illicit trade (Cigarettes)
Cigarettes: Price Bands
Summary 12 Cigarette Price Band Definitions
Cigarettes: Filter Splits
Cigarettes: Pack Splits
Distribution
COMPETITIVE LANDSCAPE
New Product Developments
PROSPECTS
SECTOR DATA
Table 19 Sales of Cigarettes by Tar Level: Volume 2002-2007
Table 20 Sales of Cigarettes by Tar Level: Value 2002-2007
Table 21 Sales of Cigarettes by Tar Level: % Volume Growth 2002-2007
Table 22 Sales of Cigarettes by Tar Level: % Value Growth 2002-2007
Table 23 Sales of Cigarettes by Price Band: % Volume Breakdown 2002-2007
Table 24 Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2002-2007
Table 25 Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2002-2007
Table 26 Sales of Cigarettes by Filter Vs Non-filter 2002-2007
Table 27 Sales of Filter Cigarettes by Carbon Vs Non-carbon 2002-2007
Table 28 Sales of Cigarettes by Length 2002-2007
Table 29 Sales of Cigarettes by Regular/Slim 2006-2007
Table 30 Sales of Cigarettes by Pack Size 2002-2007
Table 31 Sales of Cigarettes by Pack Type 2002-2007
Table 32 Cigarettes Company Shares 2003-2007
Table 33 Cigarettes Brand Shares 2004-2007
Table 34 Forecast Sales of Cigarettes by Tar Level: Volume 2007-2012
Table 35 Forecast Sales of Cigarettes by Tar Level: Value 2007-2012
Table 36 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2007-2012
Table 37 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2007-2012
Table 38 Forecast Sales of Cigarettes by Price Band: % Volume Breakdown 2007-2012
Table 39 Forecast Sales of Cigarettes by Standard/Menthol: % Volume Breakdown 2007-2012
Table 40 Forecast Sales of Cigarettes by Tobacco Type: % Volume Breakdown 2007-2012
Table 41 Forecast Sales of Cigarettes by Filter Vs Non-filter 2007-2012
Table 42 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon 2007-2012
Table 43 Forecast Sales of Cigarettes by Length 2007-2012
Table 44 Forecast Sales of Cigarettes by Regular/Slim 2007-2012
Table 45 Forecast Sales of Cigarettes by Pack Size 2007-2012
Table 46 Forecast Sales of Cigarettes by Pack Type 2007-2012
CIGARS IN SOUTH KOREA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
New Product Developments
PROSPECTS
SECTOR DATA
Table 47 Sales of Cigars by Subsector: Volume 2002-2007
Table 48 Sales of Cigars by Subsector: Value 2002-2007
Table 49 Sales of Cigars by Subsector: % Volume Growth 2002-2007
Table 50 Sales of Cigars by Subsector: % Value Growth 2002-2007
Table 51 Company Shares of Cigars Exluding Cigarillos 2003-2007
Table 52 Brand Shares of Cigars Exluding Cigarillos 2004-2007
Table 53 Company Shares of Cigarillos 2003-2007
Table 54 Brand Shares of Cigarillos 2004-2007
Table 55 Forecast Sales of Cigars by Subsector: Volume 2007-2012
Table 56 Forecast Sales of Cigars by Subsector: Value 2007-2012
Table 57 Forecast Sales of Cigars by Subsector: % Volume Growth 2007-2012
Table 58 Forecast Sales of Cigars by Subsector: % Value Growth 2007-2012
SMOKING TOBACCO IN SOUTH KOREA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
New Product Developments
PROSPECTS