Sales of Imported Cigarettes in Korean Market Are in Decline

March 13, 2015

Imported cigarettes are going back in the Korean market as a result of the price increase last year, and the non-smoking tendency of those in their 20s and 30s.

Based on the Korea Tobacco Association, British American Tobacco (BAT) Korea’s local market share dropped to 11.6 % between the first halves of 2013 and 2014. The giant cigarette maker, which supplies Dunhill, Kent, Lucky Strike, Vogue and many others, had been second only to KT&G in the market until as recently as 2010. During that time, its market share had attained the highest figures of about 17.6 %.

As to Japan Tobacco International (JTI) figures they have fallen to 6.3 % in the course of the similar period, and Philip Morris Korea, which had increased its share from 16.9 % to 19.9 % between 2010 and 2011, were unable to boost its sales recently. At the same time, KT&G’s share went up from 61.7 % to 62.3 % throughout the period, due to its new products. The Korean company’s market share had dropped beneath 50 % in 2010.

Industry insiders ascribe the reducing reputation of imported cigarettes to the price increase in 2012 and 2013. Despite the fact that the importers are striving to cope with the emerging circumstances through large-scale restructuring, the situation is rather unfavorable for them. BAT Korea not long ago decreased the number of its sales employees from 500 to about 300, and JTI is struggling with conflicts with its employees regarding the same problem.