Cigarette Market Outlook, 2028

A cigarette is a tiny, cylindrical object made of paper that usually contains dried, finely chopped tobacco leaves. By lighting the tobacco and inhaling the smoke from the filtered or unfiltered end, it is frequently used for smoking. It is a frequently used type of tobacco product that is renowned for being addictive since it contains nicotine. Different civilizations have been engaging in the ritual of smoking cigarettes for millennia, and it has attracted both societal acceptance and scorn. As a result, it is rapidly gaining popularity everywhere. The adoption of Western culture lifestyles by people is responsible for the increased rates of female smokers, the robust distribution networks of cigarette producers, and the appeal of flavoured cigarettes. Additionally, the majority of vendors are implementing online retail techniques to lower expenses and boost their margins, which are anticipated to be advantageous for the market during the projection period. Also, the development of multiple cutting-edge cigarette products, like flavoured cigarettes or e-cigarettes, as well as countless successful marketing and advertising efforts are driving the market. The tobacco industry is increasingly focusing on these growing areas because almost 80% of smokers worldwide reside in low- and middle-income nations. Additionally, a number of factors, including consumer education about the advantages of organic cigarette products and an increase in awareness of products and services through digital media and other sources, combined with the rise of social media, are fuelling demand for organic and herbal cigarettes. To preserve their place in the market, businesses who sell these products are also investing more in R&D, marketing, and expanding their distribution networks.

According to the research report, “Global Cigarettes Market Outlook, 2028” the market is anticipated to cross USD 850 Billion by 2028, increasing from USD 700.20 Billion in 2022. The market is expected to grow with 3.31% CAGR by 2023-28. The market is mostly driven by people's increasing product demand. Additionally, the addictiveness of the nicotine in cigarettes fosters a continuous demand among current smokers, which has an impact on market expansion. Additionally, the tobacco industry is spending money on marketing and promotion to draw in new customers, particularly in developing nations, in order to accelerate market expansion. Another significant growth-promoting element is the rising acceptance of cigarettes in social and cultural contexts, where smoking is frequently seen as a social pastime or a sign of adulthood in some civilizations. In addition, a sedentary lifestyle and the stress of modern life may cause people to smoke as a coping technique, which will continue to fuel market expansion. In addition, the creation of novel goods that appeal to a younger audience, like e-cigarettes, is accelerating market expansion. In the past, smokers in rural areas of various developing nations, including Pakistan, China, and India, have typically preferred other tobacco products like hukkah and beedi over cigarettes. However, it has been noted that a significant portion of the rural tobacco-consuming communities is switching to cigarettes during the past several years as a result of increased product awareness.

Asia Pacific emerged as the largest market for cigarettes in 2022 owing to region’s rapid urbanization, significant rise in the population, particularly in developing countries and ease of availability of raw materials.

The Asia-Pacific region is home to a substantial portion of the world's population, including countries like China and India, which are the most populous in the world. This vast consumer base provides a significant market for tobacco companies. Smoking has a long history and cultural acceptance in many Asian countries. In some societies, smoking is seen as a symbol of social status or is deeply ingrained in cultural and traditional practices. Some Asian countries have had relatively lax tobacco control regulations compared to Western countries. This has allowed tobacco companies to market and sell their products more freely, enabling the industry to thrive. The tobacco industry is a significant contributor to the economies of several Asian countries, providing revenue through taxes, employment, and tobacco production. Governments may be reluctant to impose stringent regulations due to economic dependencies. As the middle class expands in many Asian countries, so does the affordability of tobacco products. This increase in disposable income has led to higher consumption rates. The tobacco industry has often employed aggressive marketing strategies in the Asia-Pacific region. This has included targeting younger demographics, using appealing packaging, and associating smoking with desirable lifestyle choices.

Based on the product type, the light cigarette segment has the dominant share in the market because it is advertised as a healthier and safer alternative to conventional cigarettes and other smoking objects.

Light cigarettes, also known as low-tar or low-nicotine cigarettes, are characterized by their reduced levels of tar, nicotine, and other harmful compounds compared to regular or full-flavor products. In addition, the perception among smokers is that they are less harmful and pose a lower health risk than regular product is influencing the market growth. Many smokers believe that by choosing light-type products, they can potentially mitigate the adverse health effects associated with smoking. Moreover, light cigarettes are often marketed as a milder and smoother smoking experience, appealing to individuals who may find the taste and harshness of regular products less desirable which represents another major growth-inducing factor. Besides this, regulatory initiatives in some countries require cigarette manufacturers to label tar and nicotine content on product packs which led some consumers to opt for light products, believing that they are making a safer choice thus accelerating the market growth. Light cigarettes smoke is considered as smoother as and lighter on the throat and chest than conventional cigarettes, according to smokers. The tar Content of a light cigarette's smoke is lower than that of a regular cigarette's smoke.

Specialty tobacco stores, also known as tobacco boutiques or tobacconists, focus on selling various tobacco products, including cigarettes, cigars, pipe tobacco, and related accessories.

Tobacco shops, also known as specialty tobacco retailers or tobacconists, are specialized shops focused on selling tobacco products, including cigarettes, cigars, pipe tobacco, and smoking accessories. Additionally, tobacco shops are establishing a strong presence in the market due to their expertise in tobacco products and the personalized service they offer to customers is influencing the market growth. Also, smokers often prefer purchasing products from these dedicated outlets as they can access numerous kinds of brands and tobacco blends, allowing them to find products that match their preferences. Moreover, tobacco shops provide a unique shopping experience, offering knowledgeable staff who can assist customers in selecting suitable products and provide insights into different tobacco blends and smoking techniques. This personalized approach fosters customer loyalty and enhances the shopping experience for smokers. Additionally, tobacco shops may have exclusive deals with certain tobacco manufacturers, allowing them to offer limited edition or specialty products that may not be readily available in other retail channels. Tobacco stores are the most popular distribution channels because they offer a diverse range of specialized tobacco products, including premium cigars and cigarettes, as well as ashtrays and humidification devices.

Major Drivers

• Global Popularity and Cultural Acceptance: Cigarettes have been deeply ingrained in the cultural and social fabric of many societies for decades. In some cultures, smoking is not only widely accepted but also considered a social norm or a symbol of status and maturity. This cultural acceptance continues to drive the demand for cigarettes, especially in regions where smoking is deeply entrenched in traditions and rituals.
• Strong Presence of Multinational Tobacco Companies: The cigarette industry is dominated by a small number of multinational tobacco giants, including Philip Morris International, British American Tobacco, and Japan Tobacco International. These companies have established a strong global presence and are known for their iconic cigarette brands. They invest heavily in branding, marketing, and product innovation. Their vast distribution networks and global reach allow them to maintain their market share and profitability.

Major Challenges

• Health Concerns and Anti-Smoking Initiatives: Perhaps the most significant challenge facing the cigarette industry is the well-documented and widely publicized health risks associated with smoking. Medical research has linked smoking to various life-threatening diseases, including lung cancer, heart disease, and respiratory illnesses. This knowledge has led to increased awareness about the dangers of smoking and has prompted anti-smoking initiatives and public health campaigns. These efforts aim to reduce smoking rates, promote smoking cessation, and discourage youth from taking up the habit.
• Regulatory Restrictions: Governments around the world have implemented strict regulations on the sale, advertising, and packaging of tobacco products. These regulations include imposing high taxes on cigarettes, mandating graphic warning labels on packaging, restricting tobacco advertising, and prohibiting smoking in public places. Such restrictions challenge the marketing and distribution of cigarettes, making it more difficult for tobacco companies to promote and sell their products.

Key Trends

• Reduced Harm Products: In response to the growing health concerns associated with traditional cigarettes, many tobacco companies have invested in the development and marketing of reduced harm products. This includes electronic cigarettes (e-cigarettes), heated tobacco products, and oral nicotine products. These alternatives are often promoted as less harmful options for smokers, potentially providing nicotine without the harmful byproducts of combustion.
• Declining Smoking Rates: Smoking rates in many developed countries have been steadily declining due to health consciousness, anti-smoking efforts, and stricter regulations. To sustain profitability and market share, the cigarette industry has been diversifying its product portfolios and expanding its presence in emerging markets, where smoking rates are still relatively high. Asia-Pacific and Africa, in particular, have become key growth regions for the industry, and companies are adapting to shifting consumer preferences by exploring alternative products and technologies.

Covid-19 Impacts

Many countries imposed lockdowns and restrictions to contain the spread of the virus. These measures disrupted manufacturing operations and supply chains, leading to delays and shortages in the production and distribution of cigarettes. Factors like factory closures, transportation restrictions, and labour shortages affected the industry's ability to meet demand. Many retail outlets that sell cigarettes, such as convenience stores and gas stations, faced decreased foot traffic as consumers stayed home to reduce the risk of exposure to the virus. This resulted in decreased sales of cigarettes in physical stores, particularly in urban areas. The pandemic prompted some smokers to revaluate their habits and consider quitting. Concerns about respiratory health and heightened awareness of the health risks of smoking led to increased interest in smoking cessation products and services. Many individuals used the pandemic as an opportunity to quit smoking. Several governments took the opportunity to strengthen tobacco control measures during the pandemic. Some countries implemented stricter regulations, including higher taxes on tobacco products, graphic warning labels, and bans on tobacco advertising. These measures aimed to discourage smoking and reduce the burden on healthcare systems. The economic impact of the pandemic led to reduced disposable income for many individuals. As a result, some smokers reduced their consumption or sought more affordable cigarette options, which could affect sales of premium brands. With lockdowns and social distancing measures in place, online shopping for cigarettes increased. E-commerce platforms and delivery services saw a surge in demand for tobacco products. This trend may have a lasting impact on how consumers purchase cigarettes in the future.

Competitive Landscape

Key market participants now use a variety of tactics to fortify their positions and preserve their competitive advantages. To cater to various consumer tastes, they are broadening their product portfolios to include a wide range of brands, flavours, and product variants. Additionally, businesses are spending money on creative and attractive packaging designs to distinguish their brands and draw customers at the point of sale. To meet the needs of customers looking for alternatives to conventional goods, they are investing in the development and promotion of reduced-risk tobacco products including e-cigarettes and heat-not-burn gadgets. The creation of new products, such as improvements in filter technology, tobacco mixes, and smoking experience, is also the focus of on-going research and development (R&D) initiatives. They are actively expanding their market presence into emerging economies and high-potential regions to tap into new consumer markets and increase their sales volume. Players like British American Tobacco plc, The Japan Tobacco Inc., Imperial Tobacco Group plc, ITC Limited, Philip Morris International Inc, Korea Tobacco & Ginseng Corporation (KT&G), PT Djarum, NTC Industries Ltd, Landewyck Tobacco S.A., Karelia Tobacco Company Inc., 22nd Century Group, Inc., Eastern Company SAE, Intercontinental Tobacco Group, Dosal Tobacco Corporation, China Tobacco International Inc., The Vazir Sultan Tobacco Company Limited and Altria Group, Inc.

Key Developments

• In May 2022, British America Tobacco (BAT) test-launched a new single-use, or disposable, e-cigarette called Vuse Go in the UK., that are available in nine flavours including mint ice, creamy tobacco, and multiple fruit flavours.
• In October 2022, Altria Group, Inc. announced that JT Group (JT) agreed to enter into a strategic partnership with them to market and commercialize heated tobacco stick products in the United States and to expand the company's heated tobacco product line.
• In January 2022, 22nd Century introduced the first reduced nicotine cigarette or VLN, which the FDA approved to promote smoking less. The company is now focusing on bringing VLN to the market aggressively.
• In December 2021, ITC Ltd., India’s largest cigarette company, managed to accomplish its cigarette business, endorsed by a favourable tax structure, revived focus on product innovations, product designing, and its vast distribution reach. The steadily growing business is flourishing with a higher growth approach.

Considered in this report

• Geography: Global
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report

• Global Cigarette with its value and forecast along with its segments
• Region & Country-wise Cigarette market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Regions & Countries covered in the report

• North America (United States, Canada, Mexico)
• Europe (Germany, United Kingdom, France, Spain, Italy, Russia)
• Asia-Pacific (China, Japan, India, Australia, South Korea)
• South America (Brazil, Argentina, Colombia)
• Middle-East & Africa (UAE, Saudi Arabia, South Africa)

By Type

• Light
• Medium
• Others

By Distribution Channel

• Speciality Store
• Hypermarket/Supermarket
• Convenience Stores
• Online
• Others

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations and organizations related to the Cigarette industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.