The Global Heat Not Burn Tobacco Market is Expected to Grow at a CAGR of Over 22% During the Period 2019–2025
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The heat not burn tobacco market is growing at a tremendous rate due to an increase in the popularity of HnB products and devices in the US, Japan, and South Korea. With the increase in demand and the increasing awareness of health concerns, the HnB tobacco market is growing rapidly across the globe. The APAC region enjoys major shares because of the large smoking population and continuous shift toward innovative smoking products. The market is witnessing the introduction of innovative products to drive the sale as end-users are looking for enhanced smoking experience.
Thus, the introduction of HnB products in the market has disrupted the revenue of traditional cigarettes up to an extent. Although the sale of HnB products is lower than traditional cigarettes, the sale and revenue of large tobacco companies are witnessing a decline. These products are experiencing popularity among existing smokers and ex-smokers as they offer a different vaping sensation. Cost efficiency and easy availability are the other major drivers for growth. However, owing to stringent government regulations, the HnB tobacco market is witnessing hindrance in its growth.
The following factors are likely to contribute to the growth of the heat not burn tobacco market during the forecast period:
- Growth in Merger & Acquisition Activities
- Increase in Investment Opportunities
- Promotion via Social Marketing
- Rise in the Techno Savvy population
The study considers the present scenario of the HnB tobacco market and its market dynamics for the period 2019−2025. It covers a detailed overview of several market growth enablers, restraints, and trends. The study offers both the demand and supply aspect of the market. It profiles and examines leading companies and other prominent ones operating in the market.
Heat not Burn Tobacco Market: Segmentation
This research report includes a detailed segmentation by products, distribution, and geography. HnB tobacco devices are emerging as the best alternative for tobacco. They have become popular with consumers since they are easy to use, safe, and adequately mimic the experience of smoking. Innovation and competition have produced a new generation of HnB products that are changing the tobacco landscape. The industry is growing rapidly in Europe, especially in the UK, Italy, Poland, and France. The HnB tobacco market will double in Western Europe during the forecast period. Although the share of HnB products is minuscule when compared to cigarettes, they are expected to grow. The HnB consumables market is expected to grow at a CAGR of over 20%. The demand for capsules and cartridges is growing with the increasing purchase of HnB devices.
The sale of HnB products takes place via two major distribution channels - retail and online. The majority of the revenue comes from retail distribution channels such as convenience stores, tobacco shops, grocery shops, drug stores, and supermarkets. The distribution environment is rapidly evolving with systems, and processes are being upgraded at a rapid pace. Changes are being spurred by expanding competition, accelerating digitization, constant disintermediation, and consumerization of expectations.
As the heat not burn tobacco market is highly consumer-centric, distributors are increasingly focusing on extending their reach to vape stores and local outlets. The online sale contributed over a 6% share of the overall revenue to the global market in 2019, propelled in large by the demand from retailers, dealers, and consumers for a multi-channel approach and support. HnB products are also sold majorly through vendor websites and online retailers. A lot of offline distributors are moving the sale process online by incorporating e-commerce solutions and enterprise resource planning systems.
- Market Segmentation by Distribution
- Retail
- Convenience Stores
- Tobacco Shops
- Grocery Shops
- Drug Shops
- Others
- Online
- Company & E-commerce Websites
- Market Segmentation by Product
- Devices
- Direct/Indirect Heating
- Hybrid/Infused
- Consumables
- Tobacco Capsules and Cartridges
- Tobacco Sticks
Insights by Geography
The US vapor product market is growing consistently after the authorization of HnB products sale by the FDA within the country. This will help North America to increase its shares as smokers in the US to become health conscious. One of the major influencing factors propelling the growth in the region is the increasing availability of HnB products in retail shops and over the internet. The popularity of heat not burn products has been fostered due to the easy availability of vapor products in the market. With retailers stocking vape products, they are increasingly witnessing a surge in their popularity in the region.
APAC remains to be looked upon as the largest potential market for HnB products during the forecast period. Advances in lifestyle coupled with rising consumer expenditure are likely to increase the consumption of HnB vapor products in APAC during the forecast period. However, the region faces several challenges such as proposals to regulate vapor products, impose high taxes, and ban vapor products in the region. Besides, an increase in counterfeit products and unregulated manufacturing processes are hindering the growth of the APAC market.
One of the major reasons behind the high adoption of HnB products among Europeans is an increase in the per capita disposable income of end-consumers. An improving economy in many European countries has increased disposable income in Europe. Another major reason for the growth in the European region is the favorable retail environment. The retail environment in Western European countries is known to be characterized by heavy discounting. Besides, end-users in these countries are known to have a high annual saving ratio.
Brazil has banned the usage and consumption of tobacco in the country and has imposed taxes on cigarettes. Despite the recent increase in taxes on cigarettes in Brazil, cigarettes are still sold at lower prices than cigarettes in Argentina, Peru, Suriname, and Uruguay, so Brazil has great potential further for the companies to penetrate the market.
Market Segmentation by Geography
- Europe
- Spain
- Germany
- Italy
- France
- UK
- Poland
- Russia
- Czech Republic
- Romania
- North America
- US
- Canada
- APAC
- South Korea
- China
- Japan
- Australia & New Zealand
- Malaysia
- MEA
- UAE
- South Africa
- Egypt
Insights by Vendors
The acceptance rate of HnB products among smokers worldwide has been impressive. The heat not burn tobacco market has witnessed the entry of several new vendors. The competition among these companies has increased, leading to the introduction of several innovative and advanced products. These players compete on several factors, such as price, availability, brand, and safety. However, the price is set to become a major base for the competition among players to gain a competitive edge. Further, the growth of vendors depends on its condition, GDP growth, and industry development. High capital requirements and rapid advances in technology are major entry barriers for new players.
Key Vendors
- Philip Morris International
- Japan Tobacco International (JTI)
- British American Tobacco
- Imperial Brands
Other Prominent Vendors
- KT&G Corp.
- Eli Lilly and Company
- RJ Reynolds Vapor Company (RJRVC)
- Shenzhen AVBAD Technology Company Ltd.
- Pax Labs
- Vapor Tobacco Manufacturing
- Shenzhen Royal Tobacco Industrial Limited (Royal Tobacco)
- JOUZ
- Shenzhen Yukan Intelligent Technology Co. Ltd.
- Anlerr
- HI TASTE
- Shenzhen Kamry Technology
- Yetr Amus
- Shenzhen Yunxi Technology
- AIIR Technology (Shenzhen)
- Buddy Technology Development
- Shenzhen Original Technology
- Fog & Frog Technology (Shenzhen)
- YanB Technology Shenzhen
- Coeus
- CCBATO
- Dongguan Hawei Electronic Technology Limited
- Dongguan Cigwin Technology
- Shenzhen Keeptech Electronics
Key Market Insights
- The analysis of the heat not burn tobacco market provides sizing and growth opportunities for the period 2020–2025.
- Provides comprehensive insights on the latest industry trends, forecast, and growth drivers in the market.
- Includes a detailed analysis of growth drivers, challenges, and investment opportunities.
- Delivers a complete overview of segments and the regional outlook of the market.
- Offers an exhaustive summary of the vendor landscape, competitive analysis, and key strategies to gain a competitive advantage
Table of Contents
1 Research Methodology2 Research Objectives3 Research Process
Samples
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Companies Mentioned
- AIIR Technology (Shenzhen)
- Anlerr
- British American Tobacco
- Buddy Technology Development
- CCBATO
- Coeus
- Dongguan Cigwin Technology
- Dongguan Hawei Electronic Technology Limited
- Fog & Frog Technology (Shenzhen)
- HI TASTE
- Imperial Brands
- JOUZ
- Japan Tobacco International (JTI)
- KT&G (Korea Tomorrow & Global Corporation)
- Pax Labs
- Philip Morris International
- RJ Reynolds Vapor Company (RJRVC)
- Shenzhen AVBAD Technology Company Ltd.
- Shenzhen Kamry Technology
- Shenzhen Keeptech Electronics
- Shenzhen Original Technology
- Shenzhen Royal Tobacco Industrial Limited (Royal Tobacco)
- Shenzhen Yukan Intelligent Technology Co. Ltd.
- Shenzhen Yunxi Technology
- Vapor Tobacco Manufacturing
- YanB Technology Shenzhen
- Yetr Amus
Methodology
Our research comprises a mix of primary and secondary research. The secondary research sources that are typically referred to include, but are not limited to, company websites, annual reports, financial reports, company pipeline charts, broker reports, investor presentations and SEC filings, journals and conferences, internal proprietary databases, news articles, press releases, and webcasts specific to the companies operating in any given market.
Primary research involves email interactions with the industry participants across major geographies. The participants who typically take part in such a process include, but are not limited to, CEOs, VPs, business development managers, market intelligence managers, and national sales managers. We primarily rely on internal research work and internal databases that we have populated over the years. We cross-verify our secondary research findings with the primary respondents participating in the study.
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