In 2020, cigarettes maintained the trend seen since 2016 of declines in both retail volume and current value terms. The main reason for the long-term decline in volume sales is the continued fall in smoking prevalence, particularly amongst men, who also account for most of the smokers in the country.
One of the main factors hampering growth in cigarettes in Malaysia is illicit trade, with a strong increase seen in the review period, rising to nearly two thirds of total volume sales of cigarettes in 2020, up from less than half in 2015. The share of illicit trade rose further in 2020, mainly due to the financial impact of COVID-19, which led to constrained incomes for many.
British American Tobacco remained the dominant player in cigarettes in 2020. It maintained a similar volume share compared with the previous year, although saw switches between its brands.
Retail volume sales are expected to continue to decline throughout the forecast period due to the long-standing trend of declining smoking prevalence, although the actual number of smokers is set to resume its rising trend due to the growing population. Although the number and percentage of females who smoke is expected to fall from an already low level, the number of male smokers is set to increase despite the percentage of males who smoke declining.
Another factor which is expected to hamper the volume growth of cigarettes in the forecast period is the competition faced from vapour products and heated tobacco products. They are considered by consumers to be a better alternatives to cigarettes as they are modified risk tobacco products, and are also widely available in convenience stores and forecourt retailers.
The Malaysian government is increasing its efforts to curb illicit cigarettes, taking actions such as not issuing any new import licenses and heavily punishing smugglers from 2021. It remains to be seen whether such measures will be able to bring down the volume of illicit cigarettes.
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Understand the latest market trends and future growth opportunities for the Cigarettes industry in Malaysia 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 Malaysia, 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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