Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
KT&G to enhance global competitiveness with e-cigarettes
KT&G lil HYBRID 2.0 / Courtesy of KT&G
By Kim Hyun-bin
By Kim Hyun-bin
KT&G has achieved continuous growth in the global market, as traditional cigarettes and exports of “lil” e-cigarettes have been paving the way for the company to rank among the top 4 global tobacco companies.
According to KT&G's regulatory filings released last week, KT&G saw its cigarette sales surge 30.1 percent in 2020 on-year-year to 9.5 billion cigarettes, while sales rose 15.8 percent year-on-year to 193.7 billion won. The sales growth was attributed to the company's efforts to expand into new markets as well as customized strategies for different regions.
Last year alone, KT&G launched its products in 23 new markets with the total number of export countries exceeding 100.
KT&G's cigarettes sold in Korea, such as Esse Change Himalaya 1mg and retro concept cigarettes such as the newly released “88 Returns,” saw sales rise, upping the market share of 0.6 percent, which is considered significant coming at a time when total demand for cigarettes fell 0.1 percent, especially due to a drop in duty free sales.
Local cigarette sales rose by 60 million cigarettes from the previous year, which totaled 9.63 billion to account for a 64.5 percent local market share, rising 0.5 percentage points in the cited period.
The growth continues even in the e-cigarette sector. After launching “lil” in 2017, KT&G has garnered positive feedback from consumers due to the e-cigarette's ease of use and portability. Follow-up models such as lil Plus, lil Mini and lil Hybrid also gained in popularity and lil has grown into an influential brand in the local e-cigarette market.
The lil brand's heat-not-burn device accounted for more than a 60 percent market share at convenience stores in October.
Starting this year, the company is expected to enter new markets. Last January, KT&G signed a strategic partnership with PMI to cooperate in exporting the next-generation lil e-cigarettes, while introducing the product in Russia, Ukraine and Japan where it gained positive feedback.
The lil SOLID and heating tobacco stick Fiit were introduced in Russia last August, and in Ukraine a month later. Russia and Ukraine are known for high consumption of tobacco products, but recently there has been a rise in interest in e-cigarette purchases.
The product was also introduced in Japan, one of the largest e-cigarette markets. Global tobacco companies have been 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 have expanded into all of Japan starting in mid-February, while sales are expected to rise.