New 64mm segment has bright future in cigarette industry
In March 2012 the central government provided a new 64mm segment in the excise tariff. This new segment was developed as a strategy to curb illicit trade. Manufacturers took an advantage of this and launched more than 40 products under this segment as new brands or brand extensions. ITC Ltd launched Gold Flake Century, Scissors Menthol and Capstan 64mm in the majority of urban markets in India. The Godfrey Phillips India Ltd also launched Red & White select, Four Square Green and many more. These new launches maintained price competitiveness of 64mm brands at Rs2.00-3.00 per stick to gain some momentum in the economy segment among price-sensitive cigarette smokers.
Gutkha ban becomes nationwide
Over 2012-2013 the Supreme Court of India directed the state governments to ban gutkha. Gutkha is the major product in India which causes oral cancer, with nearly 80,000 new cases every year. As of June 2013, 26 states in India and five union territories implemented a ban on gutkha. Furthermore, by the end of 2013 there was a nationwide ban on gutkha products. This ban is projected to save around one million deaths caused by tobacco. Uttar Pradesh is the most recent state to implement a ban on sale of gutkha, in April 2013. The gutkha ban is likely to lead to consumers switching to alternative products, with increased demand for zarda and khaini.
Illicit trade still a major concern
Increasing excise taxes by the Central Government of India, and VAT hikes by the majority of states across the country are helping illicit trade to grow. Illicit trade is becoming popular as sometimes even consumers are not aware that they are buying illicit cigarettes. Illicit trade consists of domestic duty non paid, contraband and counterfeit products. The increase in VAT rates in most states reduced legitimate cigarette sales. The domestic duty non paid and lower priced cigarettes from countries such as China, Myanmar, Nepal, Bangladesh, Indonesia and Pakistan are posing a great threat to cigarettes in the country. Illicit trade is an inevitable threat to legal tobacco sales unless concrete steps are introduced by the government to curtail the phenomenon.
Newsagent tobacconists/kiosks and street vendors dominate distribution
Newsagent tobacconists/kiosks and street vendors remained the main distribution channel for tobacco products in India in 2012. While tobacco specialists dominated the retail distribution of cigars. Kiosks are very widely established throughout the country, which has made accessibility to tobacco products very easy to consumers. Internet retailing had a negligible presence in distribution of tobacco products except for cigars in 2012. The availability of smokeless tobacco was checked in some states such as Delhi in 2012 following the imposition of a ban on selling and distributing related products.
POS advertising a mode of communication for tobacco companies
The Indian Government continues to follow strict rules under the FCTC guidelines. The advertising of tobacco is completely banned in any form of media. The only way to reach consumers is through point of sale (POS) materials. In POS, only two advertising boards measuring 90x60cm can be used to advertise brands. These POS displays in tobacco specialist retailers are in demand in major cities of India, where manufacturers pay a premium to display their brands. The manufacturers clearly understand that according to the government regulation POS is the only mode of communication. Manufacturers also sign agreements with retailers to keep the display space specifically allotted to their brands.
Samples (FAQs about samples):Sample Tobacco Market Research Report
Sample Tobacco Data
Delivery: Files are delivered directly into your account within a few minutes of purchase.
Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in India with research from Euromonitor's team of in-country analysts.
Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.
If you're in the Tobacco industry in India, our research will save you time and money while empowering you to make informed, profitable decisions.
When you purchase this report, you also get the data and the content from these category reports in India for free:
The Tobacco in India market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Production, imports by origin, exports by destination
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Tobacco in India?
- What are the major brands in India?
- Which sector of the tobacco products market is the largest by value sales in India?
- Which sector of the tobacco products market has been growing the fastest, by volume and value, in India?
- Which sector is the most heavily taxed in India?
- Which companies dominate in the total tobacco market in India in terms of market share?
- What is the distribution channel split for the tobacco products market in India?
Why buy this report?
- Gain competitive intelligence about market leaders
- Track key industry trends, opportunities and threats
- Inform your marketing, brand, strategy and market development, sales and supply functions
This industry report originates from Passport, our Tobacco market research database.