Executive Summary

Jul 2019
Manufacturers and smokers turning attention to heated tobacco

Having previously been seen as providing a favourable environment for smokers, Japan is seeing increasing taxation and the introduction of restrictive legislation in the run-up to the 2020 Tokyo Olympics contribute to a significant shift in consumer behaviour. Alongside increasing awareness of the harmful effects of both smoking and passive smoking on health, these factors played a part in the continued decline in cigarettes at the end of the review period.

2018 sees significant changes in legislation

2018 was an important year in the development of cigarettes in Japan, as the category saw a considerable price hike due to an increase in the tobacco excise tax and an amendment to the Health Promotion Law, which aimed to restrict smoking in public in order to reduce exposure to second-hand smoke ahead of the 2020 Tokyo Olympic Games. The amendment’s restrictions are set to be implemented in a staged manner up to April 2020, though the Health Ministry’s original proposal was watered down as a result of opposition from the ruling Liberal Democratic Party and industry groups.

Manufacturers looking beyond declining core category

Japan Tobacco, which is partly owned by the Japanese Government, remained the dominant company in cigarettes in 2018, with Philip Morris and British American Tobacco the only other major players in the category. However, the end of the review period was notable for the fact that all three of these players increasingly shifted their focus away from cigarettes towards heated tobacco.

Distribution channels competing for heated tobacco consumers

Convenience stores dominates sales of cigarettes in Japan, as the channel’s easily accessible locations and long opening hours enable busy consumers to pick up cigarettes, along with other products, in the course of hectic everyday lives. Tobacco specialists, meanwhile, continued to dominate cigars and cigarillos, and smoking tobacco, though internet retailing also maintained a strong share of sales in these categories.

Growth forecast despite cigarettes’ ongoing contraction

The Japanese tobacco market is forecast to see value sales increase in both current and constant terms over 2018-2023, despite the ongoing decline of the largest category, cigarettes. Cigarettes is expected to see rising taxation, increasing consumer health-consciousness and an increasingly restrictive regulatory environment lead to decline in both value and volumes over the forecast period.

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Tobacco in Japan

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Overview

Discover the latest market trends and uncover sources of future market growth for the Tobacco industry in Japan 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 Japan, 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 Japan for free:

The Tobacco in Japan 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 Japan?
  • What are the major brands in Japan?
  • Which sector of the tobacco products market is the largest by value sales in Japan?
  • Which sector of the tobacco products market has been growing the fastest, by volume and value, in Japan?
  • Which sector is the most heavily taxed in Japan?
  • Which companies dominate in the total tobacco market in Japan in terms of market share?
  • What is the distribution channel split for the tobacco products market in Japan?

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.

Tobacco in Japan

EXECUTIVE SUMMARY

Manufacturers and smokers turning attention to heated tobacco
2018 sees significant changes in legislation
Manufacturers looking beyond declining core category
Distribution channels competing for heated tobacco consumers
Growth forecast despite cigarettes’ ongoing contraction

OPERATING ENVIRONMENT

Legislation
Legislative overview
Summary 1 Legislation Summary at a Glance
Minimum legal smoking age
Smoking prevalence
Tar levels
Health warnings
Plain packaging
Advertising and sponsorship
Point-of-sale display bans
Smoking in public places
Low ignition propensity (LIP) cigarette regulation
Flavoured tobacco product ban
Reduced harm
Vapour products

PRODUCTION/IMPORTS/EXPORTS

MARKET INDICATORS

Table 1 Number of Adult Smokers by Gender 2013-2018

MARKET DATA

Table 2 Sales of Tobacco by Category: Volume 2013-2018
Table 3 Sales of Tobacco by Category: Value 2013-2018
Table 4 Sales of Tobacco by Category: % Volume Growth 2013-2018
Table 5 Sales of Tobacco by Category: % Value Growth 2013-2018
Table 6 Forecast Sales of Tobacco by Category: Volume 2018-2023
Table 7 Forecast Sales of Tobacco by Category: Value 2018-2023
Table 8 Forecast Sales of Tobacco by Category: % Volume Growth 2018-2023
Table 9 Forecast Sales of Tobacco by Category: % Value Growth 2018-2023

SOURCES

Summary 2 Research Sources

Cigars, Cigarillos and Smoking Tobacco in Japan

HEADLINES

PROSPECTS

Rising cigarettes prices boost demand for cigars and cigarillos
Fine cut tobacco appeals with price and flavours
Tobacco specialists continue to dominate distribution

COMPETITIVE LANDSCAPE

Looking to leverage cigarette brand equity in cigars and cigarillos
Fine cut tobacco innovation focuses on new flavours
Organic and natural trend influencing demand in fine cut tobacco

CATEGORY DATA

Table 10 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Volume 2013-2018
Table 11 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Value 2013-2018
Table 12 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Volume Growth 2013-2018
Table 13 Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Value Growth 2013-2018
Table 14 Sales of Cigars by Size: % Volume 2013-2018
Table 15 Sales of Cigarillos by Price Platform 2013-2018
Table 16 NBO Company Shares of Cigars and Cigarillos: % Volume 2014-2018
Table 17 LBN Brand Shares of Cigars and Cigarillos: % Volume 2015-2018
Table 18 NBO Company Shares of Cigars: % Volume 2014-2018
Table 19 LBN Brand Shares of Cigars: % Volume 2015-2018
Table 20 NBO Company Shares of Cigarillos: % Volume 2014-2018
Table 21 LBN Brand Shares of Cigarillos: % Volume 2015-2018
Table 22 NBO Company Shares of Smoking Tobacco: % Volume 2014-2018
Table 23 LBN Brand Shares of Smoking Tobacco: % Volume 2015-2018
Table 24 NBO Company Shares of Pipe Tobacco: % Volume 2014-2018
Table 25 LBN Brand Shares of Pipe Tobacco: % Volume 2015-2018
Table 26 NBO Company Shares of Fine Cut Tobacco: % Volume 2014-2018
Table 27 LBN Brand Shares of Fine Cut Tobacco: % Volume 2015-2018
Table 28 Distribution of Cigars and Cigarillos by Format: % Volume 2013-2018
Table 29 Distribution of Smoking Tobacco by Format: % Volume 2013-2018
Table 30 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Volume 2018-2023
Table 31 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: Value 2018-2023
Table 32 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Volume Growth 2018-2023
Table 33 Forecast Sales of Cigars, Cigarillos and Smoking Tobacco by Category: % Value Growth 2018-2023

Smokeless Tobacco, E-Vapour Products and Heated Tobacco in Japan

HEADLINES

PROSPECTS

Major players shifting focus to heated tobacco
Imperial Brands pioneers e-vapour products in the market
Growth in niche snus segment

COMPETITIVE LANDSCAPE

Intensifying competition eats into Philip Morris’s lead
Philip Morris responds to growing competition with innovation
Japan Tobacco diversifies the Ploom Tech range

CATEGORY INDICATORS

Table 34 Number of Adult Vapers 2013-2018

CATEGORY DATA

Table 35 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Volume 2013-2018
Table 36 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Value 2013-2018
Table 37 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Volume Growth 2013-2018
Table 38 Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Value Growth 2013-2018
Table 39 Sales of Tobacco Heating Devices: Volume 2013-2018
Table 40 Sales of Tobacco Heating Devices: Value 2013-2018
Table 41 Sales of Heated Tobacco: Volume 2013-2018
Table 42 Sales of Heated Tobacco: Value 2013-2018
Table 43 NBO Company Shares of Smokeless Tobacco: % Volume 2014-2018
Table 44 LBN Brand Shares of Smokeless Tobacco: % Volume 2015-2018
Table 45 NBO Company Shares of E-Vapour Products: % Value 2014-2018
Table 46 LBN Brand Shares of E-Vapour Products: % Value 2015-2018
Table 47 NBO Company Shares of Tobacco Heating Devices: % Volume 2014-2018
Table 48 LBN Brand Shares of Tobacco Heating Devices: % Volume 2015-2018
Table 49 NBO Company Shares of Heated Tobacco: % Volume 2014-2018
Table 50 LBN Brand Shares of Heated Tobacco: % Volume 2015-2018
Table 51 Distribution of Smokeless Tobacco by Format: % Volume 2013-2018
Table 52 Distribution of E-Vapour Products by Format: % Value 2013-2018
Table 53 Distribution of Tobacco Heating Devices by Format: % Volume 2013-2018
Table 54 Distribution of Heated Tobacco by Format: % Volume 2013-2018
Table 55 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Volume 2018-2023
Table 56 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: Value 2018-2023
Table 57 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Volume Growth 2018-2023
Table 58 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Volume Growth 2018-2023
Table 59 Forecast Sales of Smokeless Tobacco, E-Vapour Products and Heated Tobacco by Category: % Value Growth 2018-2023
Table 60 Forecast Sales of Tobacco Heating Devices: Volume 2018-2023
Table 61 Forecast Sales of Tobacco Heating Devices: Value 2018-2023
Table 62 Forecast Sales of Heated Tobacco: Volume 2018-2023
Table 63 Forecast Sales of Heated Tobacco: Value 2018-2023

Cigarettes in Japan

HEADLINES

PROSPECTS

New legislation set to dampen demand
Manufacturers seek ways to keep prices down
Increasing competition from heated tobacco

COMPETITIVE LANDSCAPE

Japanese Government plays an important role with a significant stake in JTI
Philip Morris preparing for withdrawal from cigarettes
Innovation targets demand for flavoured products

TAXATION AND PRICING

Taxation rates
Summary 3 Taxation and Duty Levies 2013-2018
Average cigarette pack price breakdown
Summary 4 Average Cigarette Pack Price Breakdown: Brand Examples

CATEGORY DATA

Table 64 Sales of Cigarettes: Volume 2013-2018
Table 65 Sales of Cigarettes by Category: Value 2013-2018
Table 66 Sales of Cigarettes: % Volume Growth 2013-2018
Table 67 Sales of Cigarettes by Category: % Value Growth 2013-2018
Table 68 Sales of Cigarettes by Blend: % Volume 2013-2018
Table 69 Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2013-2018
Table 70 Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2013-2018
Table 71 Sales of Cigarettes by Pack Size: % Volume 2013-2018
Table 72 Sales of Cigarettes by Price Band: % Volume 2013-2018
Table 73 NBO Company Shares of Cigarettes: % Volume 2014-2018
Table 74 LBN Brand Shares of Cigarettes: % Volume 2015-2018
Table 75 Sales of Cigarettes by Distribution Format: % Volume 2013-2018
Table 76 Illicit Trade Estimate of Cigarettes: Volume 2013-2018
Table 77 Forecast Sales of Cigarettes: Volume 2018-2023
Table 78 Forecast Sales of Cigarettes by Category: Value 2018-2023
Table 79 Forecast Sales of Cigarettes: % Volume Growth 2018-2023
Table 80 Forecast Sales of Cigarettes by Category: % Value Growth 2018-2023
Table 81 Forecast Sales of Cigarettes by Blend: % Volume 2018-2023
Table 82 Forecast Sales of Cigarettes by Standard/Menthol/Capsule: % Volume 2018-2023
Table 83 Forecast Sales of Cigarettes by Regular/Slim/Superslim/Microslim: % Volume 2018-2023
Table 84 Forecast Sales of Cigarettes by Pack Size: % Volume 2018-2023
Table 85 Forecast Sales of Cigarettes by Price Band: % Volume 2018-2023