A Huge Market and great demand on China’s cigarette market
Based on the report published by the Food and Agriculture Organization of the United Nations (FAO), a specialized agency of the United Nations, China, as the largest producer of tobacco, yielded leaf tobacco approximately 2.4 million tonnes in 1999, which is nearly one-third of world output. As the majority of tobacco was processed into cigarettes, this production supply cigarette market in China. A market research camp up with an investigating result estimated that over 320 million Chinese were smoking which stimulated China become the world largest cigarette consuming country.
A marketing report released in 2012 shows that the overall cigarette market performed a steady growth in sales in 2011, even though it was at a slower pace in previous year. According to our market analysis in Shanghai, the steady increasing demand on the Chinese market was the driving force which triggered that sustainable growth. From the aspect of profit to see, cigarette has been a great valuable and profitable product in China, in particular for the government.
For instance, during the year of 1998, with less than one percent of sown agriculture land, tobacco production, along with manufacturing processes, generated about 95 billion RMB in tax. The government definitely benefited through tax revenue as it accounted for about 15 percent of government net income.
TOP 10 Domestic Luxury Cigarette Brands in China:
Marlboro and Camel are two very famous American brands on China’s cigarette market. Marlboro, as the largest selling brand of cigarettes in the world, owned its first batch of made-in-China Marlboro brand cigarettes rolled down the production line at Changsha Cigarette Factory(湖南中烟工业有限责任公司) in south central China’s Hunan Province on July 18, 2008. It was greatly signifying the initiation of commercialized production of the world’s top cigarette brand in China. Camel is a brand of cigarettes that was introduced by American company R.J. Reynolds Tobacco in the summer of 1913. Most current Camel cigarettes contain a blend of Turkish tobacco and Virginia tobacco.
State Express 555 is a brand of cigarette manufactured by British American Tobacco. It was first launched in 1915 and is a second most popular brand in Asia (after Dji Sam Soe 234 from Philip Morris International), especially China and Malaysia where it is BAT’s most popular brand. As a Swiss luxury tobacco goods brand name, Davidoff is carried by a range of products including cigars, cigarettes and pipe tobaccos. Its cigarette brand is very welcomed by Chinese young people.
Challenges on China’s cigarette Market
In spite of an incredibly huge cigarette market in China with a total of 2.2 trillion cigar consumption a year, foreign brands has been encountering and experiencing some problems that damage the market. The most difficult and tough invader of cigarette market is counterfeited smokes which are not only affecting the market of China but also the other countries.
According to a market report released in 2012, there were about 400 billion fake cigarette being produced in China that flow to U.S.