While cigarettes were recording a second year of positive growth in 2022, boosted by further normalisation post-pandemic, enabling a fuller return of mobility, inbound tourists and social lives, there was a mixed picture in the newer alternatives to traditional tobacco. E-vapour products were hit by the raft of new regulations on these products in China, while heated tobacco continued to thrive, helped by the region housing the biggest market for these products globally: Japan.
This report comes in PPT.
E-vapour products have been subject to much more stringent regulations of late in China (eg tax hikes, cap on e-liquid strength, ban on open vaping systems), decimating sales in 2022. However, sales of traditional cigarettes were growing in China, with this industry, overseen by the State Tobacco Monopoly Administration, an important one in this country in terms of tax take and employment.
Japan experienced steep declines in its unit volume sales of cigarettes between 2017 and 2020 as the government implemented significant tax rises over this period as it looked to reduce smoking prevalence. Another key factor behind these declines was the strong emergence of heated tobacco products, with Japan home to the biggest market for these products globally.
The ban on flavours in e-vapour products will continue to undermine the e-vaping market in China in the coming years. With Hong Kong recently joining India in banning vaping, similar moves are also being discussed in other countries across the region.
In Japan and South Korea, Asia Pacific houses the first and fourth biggest heated tobacco markets globally, with both expected to continue growing in the coming years. Dynamic performances are expected in relatively new heated tobacco markets like the Philippines, although the absence of heated tobacco products in the region’s two most populous nations (China, India) could hold back the category’s development over 2022-2027.
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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