Cigars and cigarillos are perceived to be premium products by Thai consumers and as such are mainly only purchased by a niche group of wealthier locals and tourists. Sales of these products were hard hit by the outbreak of COVID-19 in Thailand for numerous reasons.
Fine cut tobacco has been the best performing category in cigars, cigarillos and smoking tobacco during the pandemic thanks to its use in rolling one’s own cigarettes. With more time spent at home over the last couple of years, consumers have more time to create their own cigarettes, with some even finding the experience relaxing and enjoyable.
Unlike cigarettes or cigarillos where brand and product information is relatively easy to access, cigar (or potential) cigar smokers used to learn about cigar brands and products only from cigar shops or word-of-mouth recommendations. However, more online discussion forums, as well as the growing importance of social media, have enabled cigar users to access information about products more easily.
COVID-19 has taken a heavy toll on Thailand’s tourism industry, and it is unlikely that inbound arrivals will start to recover to pre-pandemic levels until at least 2023. With tourists making up a significant share of the consumer base for cigars and cigarillos the recovery of tourism in Thailand will likely be closely linked to the recovery of these products.
Fine cut tobacco received a huge boost from the impact of COVID-19, with many cigarette smokers making the switch to roll your own options to save money. With economic difficulties set to linger in the early forecast period, retail volume growth in this category will remain in the double digits in 2022, followed by a gradual deceleration in growth rates as the economy starts to recover and some consumers switch back to cigarettes for their convenience.
Despite a couple of difficult years, cigars is likely to retain its positioning in Thailand as a premium product as well as the largest category in value terms within overall cigars, cigarillos and smoking tobacco. The target audience for cigars is an affluent niche for whom price rises stemming from higher taxes can be more easily absorbed, especially amongst avid collectors.
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Cigars, Cigarillos and Smoking Tobacco
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