According to news agency NEWSIS in South Korea, Japan Tobacco Inc. (JTI) saw a 1.3% year-on-year decline in sales in the South Korean market in 2022, totaling KRW 197.8 billion (approximately CNY 1 billion). The company's operating profit for the year was KRW 8.4 billion (approximately CNY 43.46 million), reflecting a 1.2% decrease from the previous year.
This contrasts with competitors Philmo International and KT&G.
According to reports, the sales revenue of the South Korean company, Phenix International, was 686.8 billion Korean won (approximately 3.55 billion yuan) last year, an increase of 21.5% year-on-year. Operating profit was 80.6 billion Korean won (approximately 420 million yuan), an increase of 162.5%.
Last year, KT&G's sales in South Korea reached 3.7 trillion Korean won (approximately 19.1 billion yuan), a 6% year-on-year increase, while operating profit was 1.1203 trillion Korean won (approximately 5.8 billion yuan), up 3.4% year-on-year.
According to reports, Japan Tobacco's decline in performance in South Korea is due to not entering the new tobacco market, resulting in a lack of new growth channels.
According to reports, Japan Tobacco entered the new tobacco market in South Korea in 2019 with "Ploom Tech", but did not gain much market share and withdrew from the South Korean market in 2021. Analysts suggest that Japan Tobacco failed to establish a significant presence in the new tobacco market in South Korea due to their late entry, which made it difficult to expand their influence.
Japan Tobacco International Korea stated that it plans to introduce 20 new products in South Korea to strengthen its product portfolio and expand the options for adult smokers. Meanwhile, it is continuously studying ways to enter the new tobacco market in Korea based on consumer demand and industry trends, but there are no confirmed plans at present.
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Japan Tobacco plans to increase its investment in Ploom X and aims to expand the product to at least 20 countries by the end of 2024.
Japan Tobacco has announced that its Russian factory will continue operating, despite having considered selling its Russian business in 2022.
The annual report of Japan Tobacco reveals that sales of heated non-combustible products have doubled, with an increase in market share in Europe and Southeast Asia.
References:
JT International (JTI) experiences declining sales in the South Korean market, with no plans yet for electronic cigarettes.
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