May. 19. 2021
KT&G to improve its global competitiveness with electronic cigarettes
|KT&G lil HYBRID 2.0 / Courtesy of KT&G|
By Kim Hyun-bin
KT&G has achieved continued growth in the global market as traditional cigarettes and âlilâ electronic cigarette exports paved the way for the company to rank among the world’s 4 largest tobacco companies. According to KT&G regulatory documents released last week, KT&G saw its cigarette sales increase 30.1% in 2020 year-on-year to 9.5 billion cigarettes, while its sales increased 15.8% in year on year to 193.7 billion won. The sales growth has been attributed to the company’s efforts to expand into new markets as well as personalized strategies for different regions.
Last year alone, KT&G launched its products in 23 new markets, with the total number of exporting countries exceeding 100.
KT&G cigarettes sold in Korea, such as Esse Change Himalaya 1 mg and retro concept cigarettes such as the new version “88 Returns”, saw their sales increase, increasing the market share by 0.6%, which is considered significant at a time when demand for cigarettes fell 0.1 percent, partly due to lower duty-free sales.
Local cigarette sales increased by 60 million cigarettes from the previous year, totaling 9.63 billion to represent a local market share of 64.5%, up 0.5 percentage point over of the period cited.
Growth continues even in the electronic cigarette sector. After launching “lil” in 2017, KT&G garnered positive feedback from consumers due to the ease of use and portability of the e-cigarette. Tracking models such as Lil Plus, Lil Mini, and Lil Hybrid have also grown in popularity and Lil has become an influential brand in the local e-cigarette market. The small brand’s combustion-free heater accounted for over 60% of the convenience store market in October.From this year, the company is expected to enter new markets. Last January, KT&G signed a strategic partnership with PMI to cooperate in the export of the new generation of Lil electronic cigarettes, while introducing the product to Russia, Ukraine and Japan, where it received positive reviews.
The lil SOLID and the Fiit heated tobacco stick were introduced in Russia last August and in Ukraine a month later. Russia and Ukraine are known for their heavy consumption of tobacco products, but recently there has been a surge in interest in purchasing e-cigarettes.
The product has also been introduced in Japan, one of the largest electronic cigarette markets. Global tobacco companies are competing fiercely in the Japanese market as it is expected to show further growth.Last October, KT&G introduced lil HYBRID 2.0 and MIXX in Fukuoka, showcasing their distinct flavor and ease of use. Tobacco sticks spread across Japan from mid-February, with sales expected to increase.