Recently, PMI, BAT, JTI, and KT&G have all announced the market outlook for their new tobacco products (including heated non-burning, electronic cigarettes, and nicotine pouches) for 2022.
2FIRSTS compared and analyzed the new tobacco businesses of four companies.
PMI's sales revenue is in first place, exceeding the sum of the other three companies combined.
Upon comparison, 2FIRSTS has found that all four tobacco companies have experienced significant growth in their new tobacco business, with BAT growing by almost 50%. The specific market conditions are as follows:
According to sources, 2FIRSTSPMI has the highest sales revenue at 9.7 billion US dollars but no specific growth data is available. Following closely are BAT with a sales revenue of 3.46 billion US dollars, a 40.9% year-on-year increase; KT&G with a sales revenue of 1.126 billion US dollars, a 13.8% year-on-year increase; and JTI with a sales revenue of 617 million US dollars, a 9.2% year-on-year increase.
The main markets are extremely competitive, with emerging markets operating independently.
From a market perspective, these four tobacco companies are continuing to strengthen their positions in their established main markets while actively expanding into emerging markets, with a low degree of overlap in these new markets. The majority of these emerging markets are concentrated in Africa, South America, and the Middle East. Here are the specific details:
PMI's main markets are in Europe and East Asia, where 95% of its smoke-free product sales come from. The company is experiencing rapid growth in emerging markets such as the Middle East and Africa, with growth rates reaching as high as 100%.
BAT's main markets are Europe and North America, with emerging markets in Latin America and Sub-Saharan Africa. Its e-cigarette business saw growth of 55.1%.
KT&G's main markets are in East Asia and Europe, while its emerging markets are in Central and South America.
JTI's primary markets include Japan, Southeast Asia, Eastern Europe, and the United States. In 2022, JTI is expected to see an increase in market share in most of these markets.
Top tobacco companies' emerging market distribution map | Image source: 2FIRSTS Overall, both BAT and PMI are expanding into the South African market, while BAT and KT&G are focusing on Central and South America and Africa. However, it is worth noting that KT&G has renewed its contract with PMI for 15 years. So, while it may appear that BAT and KT&G are competing for the Central and South American and African markets, it is still ultimately a competition between BAT and PMI.
PMI, a tobacco company with a leading market share in the new tobacco market, has also shown its ambitions in strategic planning. PMI's layout covers almost all regions including China, the United States, South America, Africa, and the Middle East. Previously, PMI also planned to return to the US market by 2025.
References:
Philip Morris International Inc. (PMI) has released its financial results for the fourth quarter and full year of 2022.
New category growth will drive profitability forward until 2024.
The earnings report of 2022.
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