Cigarettes will respond negatively to the COVID-19 pandemic in 2020 overall as current value and volume sales plummet. The main reasons for this have been due to restrictions on mobility and the absence of social gatherings, which have both reduced the consumption of cigarettes for many social smokers.
Despite border closures and national travel bans, illicit trade has continued to pose a threat to cigarettes in 2020. Although all the legal roads to enter Ecuador have been closed, many other roads have remained open, meaning illicit cigarettes have continued to be smuggled into the country.
Tabacalera Andina, the local subsidiary of Philip Morris International, will retained its near monopoly on cigarettes, in 2020, although it faces headwinds from illicit trade. Lark and Lider will once again top cigarettes value sales, although Lark displaced the long-term brand leader, Lider, prior to the COVID-19 pandemic.
Cigarettes will rebound in both volume and current value terms from as soon as 2021, however, sales will not return to what they were prior to the COVID-19 pandemic at any point during the forecast period. The main reason for this will be due to ongoing health concerns as more consumers try to quit smoking or migrate to healthier alternatives.
Another factor that will contribute to the slowed recovery of cigarettes over the forecast period will be the ongoing financial repercussions of the COVID-19 pandemic. As disposable incomes continue to diminish, illicit trade will continue to threaten legal cigarettes as cash-strapped consumers will be attracted to the significantly lower prices.
Over the forecast period, companies will need to reorient portfolios for a recessionary new normal, accepting consumers into lower-value brands or legal categories, and pushing for innovative products which cater to a desire for affordable luxury where possible. As tobacco is further commoditised by regulation, and affected by increased health awareness, cash-strapped governments will see tobacco as a taxation target and consumers will see prices pushed up.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Ecuador with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
If you're in the Cigarettes industry in Ecuador, our research will help you to make informed, intelligent decisions; to recognise and profit from opportunity, or to offer resilience amidst market uncertainty.
This report originates from Passport, our Cigarettes research and analysis database.
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