As a result of the COVID-19 crisis, contraband has gained a very important position in the Peruvian market, surpassing the sales of the legal market. Cigarette consumption has migrated to less expensive versions of premium brands, with those of the illicit market being amongst the most preferred.
Faced with an increasingly challenging scenario, brands’ marketing strategies are focusing on the development of the premium segment rather than the economy segment, as they seek higher margins. Premium brands are also more capable of providing a distinctive image, while price is the dominant factor in purchasing decisions in the economy segment.
In 2021, British American Tobacco enlarged the size of its Lucky Strike cigarettes from 83 to 94 mm, in addition to renewing the brand's packaging design. The company also launched the Energy Charged single-cap, energy drink-flavoured cigarettes, a product targeted at smokers in the 18-30 age range.
Purchasing habits in major cities such as Lima, Arequipa and Trujillo have been influenced by the greater adoption of digital payment methods. This has supported the expansion of modern grocery retailing and online shopping.
An increasingly marked migration of economy cigarette consumption to the premium segment is expected, given that the latter has a greater differentiation in terms of product offerings, with novel flavours standing out in single and double cap presentations, which are currently the preferred options amongst consumers. In addition, during the forecast period, the main competitors in the Peruvian market, British American Tobacco and Philip Morris, will continue to seek to raise awareness of the negative impact of smuggling.
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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.See All of Our Definitions
This report originates from Passport, our Tobacco research and analysis database.
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