Philip Morris International is Dominating the E-Cigarette Revolution in Japan

Share This Article
August 12, 2016 12:03pm NYSE:PM

cigarette-1239304-640x480Philip Morris International Inc. (NYSE:PM) is making big inroads in the Japanese tobacco market with its iQOS smokeless tobacco e-cigarettes, which could drive big revenues in a country with 20 million smokers.


From Reuters:

In what may be an early vindication of Philip Morris’s e-cigarette strategy, the iQOS accounted for 2.2 percent of Japan’s tobacco sales in the quarter ended June 30, a company spokesman said.

That share had climbed to 2.7 percent by the end of June after Philip Morris rolled out the 9,980 yen ($98.53) electronic smoker in late April accompanied by “HeatSticks”, which cost the same as regular cigarettes.

“The figures clearly show that iQOS is stealing a chunk of the rolled tobacco market,” said Masashi Mori, analyst at Credit Suisse Securities in Tokyo. Japan’s overall cigarette sales in June shrank 5.2 percent.

Unlike traditional cigarettes, e-cig sales are jumping around the world as former smokers flock to what is widely considered a safer alternative to tobacco. The e-cig market saw $8 billion in sales in 2014, more than five times 2010’s total.

Philip Morris is investing heavily in the new technology and wants to expand its reach to many other nations soon.

Philip Morris plans to widen sales of iQOS to 20 countries by the end of the year.

Former state tobacco monopoly Japan Tobacco, which has 60 percent of its domestic market, is struggling to counter the challenge with its own device. JT’s electronic cigarette stick, dubbed the Ploom TECH, creates a vapor from a liquid that is passed through granulated tobacco.

Philip Morris International shares rose $0.49 (+0.50%) to $99.35 in Friday afternoon trading. The largest U.S.-based international seller of tobacco products has seen its stock rise 13% year-to-date, nearly doubling the performance of the S&P 500 in the same period.

PM-2016-08-12


9 "BUY THE DIP" Growth Stocks For 2020

Read Next



Get Free Updates

Join over 50,000 investors who get the latest news from ETFDailyNews.com!

Most Popular



Explore More from ETFDailyNews.com

Free Daily Newsletter

Get daily ETF insights from our market experts. Never miss another important market development again!

ETFDailyNews.com respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories