Tobacco crop contributes a significantly large share in the overall agricultural economy of China and it has emerged as a major cash crop for the country in recent years. As a result of this, the government PRC has been heavily investing in implementing a number of subsidy schemes for increasing the quality and quantity of tobacco leaves, especially in few of the leading states provinces such as Yunnan, Hunan and Guizhou.
The country has witnessed the inclining rate of demand for tobacco products, unlike its neighboring country such as India, where the overall cigarette consumption declined since last couple of years. In light of this, the provinces of China have been massively investing in upgrading their tobacco plants in order to cater to the mounting tobacco demand in the country. For instance, the Zhejiang Provincial Tobacco Industry Corp recently upgraded its Ningbo factory in order to manufacture the improved quality cigarettes for its flagship brand named Great Red Eagle. Over the last few years, China has remained as the largest contributing country in the overall tobacco revenues from BRICS region. In 2013, China contributed a share of ~% in the BRICS tobacco market revenue. The revenue of China tobacco market grew at a CAGR of ~% from USD ~ million in 2007 to USD ~ million in 2013.
Unlike other BRICS countries, China hasn’t banned the smoking in all public places but it has banned smoking in ~ indoor public places as listed in the state council regulations. China has formed stringent regulations on advertising and promotions but sponsorship is still allowed. In 2011, China government issued a control policy measure, according to which the sales of cigarettes which contain tar more than 12 mg, was prohibited in the country. Owing to this, the sales of low and mid tar cigarettes begun to flourish. In the upcoming years, the consumption of low tar cigarettes will witness a soaring growth thereby, will drive the overall tobacco market revenues in China.
The competitive landscape of the China tobacco market is highly concentrated amongst state owned enterprise. More than ~% of the market has been occupied by the brands owned by China National Tobacco Corporation, which is a government enterprise, responsible for production and distribution of tobacco products in China. These state owned brands have been becoming more attentive to marketing and packaging, majorly as a means of disguising health warnings which is a mandatory requirement to comply with China’s WHO commitments.
According to the research report “the country has also showcased an increasing trend towards lower tar content cigarettes which has positively impacted the foreign manufacturers. Currently, smoking population of China still prefer high tar cigarettes. However, the growing awareness of health risks posed by these high-tar cigarettes has paved the way for growing presence of mid and low tar cigarettes in the country”, according to the Research Analyst, Ken Research.
The report “China Tobacco Market Outlook to 2018 - Driven by Rising Consumption of Cigars” provides detailed overview on the Tobacco market across the geography of China and helps the readers to identify the ongoing trends in the industry and anticipated growth in future depending upon changing industry dynamics in coming years. The report will help industry consultants, retail and consumer goods experts, tobacco manufacturers and suppliers and other stakeholders align their market centric strategies according to ongoing and expected trends in future.