Asia Pacific continues to be the largest cigarette market in the world. The region’s cigarette consumption experienced a decline caused by the impact of COVID-19 leaving consumers to reduce their consumption of cigarettes or shift to illegal trade. While strong government regulations and emergence of next-generation products indicate a challenging future, capsule cigarettes and growing demand for premium segments bring interest to this mature industry.
This report comes in PPT.
Asia Pacific continues to be the largest cigarette market in the world in volume terms. Five out of the global top 10 cigarette markets are located in Asia Pacific, including China, Indonesia, Japan, Vietnam and Bangladesh. The region’s cigarette consumption experienced a decline over the review period having faced the impact of COVID-19. This left many consumers feeling worse off, leading them to reduce their consumption of cigarettes or shift to illegal trade.
China is by far the largest market in Asia Pacific accounting for 70% of regional consumption in 2020. Over 2015-2020, the top 10 brands in the region were Chinese brands, taking advantage of the large size of the local market.
Even during the pandemic, the country experienced growth led by growing consumer preference for premium and mid-priced cigarettes, indicative of increasing disposable incomes.
Younger consumers of legal smoking age are a big fan of flavour capsule cigarettes, due to the freshness and complexity of taste. Less reduced smell is another key driver for rapid growth of capsule cigarettes in the region. With the social pressure surrounding passive smoking mounting, many smokers looked for ways to reduce smoking smells and the capsule cigarette became more popular thanks to its smooth odour.
The future is not bright. Retail volume sales of cigarettes in Asia Pacific are set to see a temporary rebound in 2021 but shortly thereafter are expecting another downturn. Strong anti-tobacco campaigns, tax hikes and emergence of next-generation products will lead further declines.
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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