Big News! IQOS Approved for Sale in the US Market

Report, May 1 news, according to foreign reports,The U.S. Food and Drug Administration (FDA) has authorized Philip Morris International (PMI) to sell the IQOS heated tobacco system in the U.S. market.

Two tobacco giants compete for U.S. heated non-burn market

Under an exclusive licensing agreement with PMI, Philip Morris USA will commercialize IQOS in the United States through three HeatStick variants.

Blue Hole analysis shows that the landing of IQOS in the United States will have a significant impact on the U.S. e-cigarette market. Previously, the FDA had approved British American Tobacco's Heated Non-Burning Products (HNB) to be launched in the United States. British American Tobacco after the announcementShares have risen 5%.

British American Tobacco is the world's second largest tobacco group, and its biggest competitor is Philip Morris International. The FDA took the lead in approving British American Tobacco's heated non-combustible products to be sold in the United States, becomingThe first tobacco company to launch tobacco heating products.

On April 30, U.S. time, the FDA approved the application for Philip Morris International's heating non-combustible product IOQS to land on the U.S. market.

For tobacco groups, the United States and the United Kingdom are the most competitive countries in the e-cigarette industry. The development speed of e-cigarettes far exceeds that of other countries, with strong consumer spending power and wide market acceptance.

At present, the number one e-cigarette brand in the United States is Juul, an e-cigarette, which has captured 75% of the U.S. e-cigarette market share and is valued at more than US$38 billion. However, what is interesting is that Juul's investment method Altria Group, Altria and Philip Morris International can be said to be one family.

Philip Morris International was spun off by Altria in 2008, so Altria is the parent company of Philip Morris International, and they jointly own Marlboro, and IQOS cigarettes are mainly provided by Marlboro.

IQOS has already achieved great success in Japan. According to a report from Tianfeng Securities, Japan is currently the main market for IQOS, followed by South Korea. At the same time, IQOS has entered 47% of Eastern Europe, Russia and China markets.

In 2018, Japan's IQOS penetration rate was 15.2%. In the Korean market, it took two years for the IQOS penetration rate to increase from 0% to 8.5%, Eastern Europe penetration rate to increase from 0.6% to 1.7%, and Russia increased from 0.2% to 1.8%.

Philip Morris International's 2018 annual report shows that operating income and net profit were US$29.625 billion and US$7.911 billion respectively, a year-on-year increase of 3.05% and 31.09%; in terms of market sales, benefiting from the overall growth of the IQOS market, sales were 44.3 billion units throughout the year, a year-on-year increase of 93.2%, and the current market value is US$130 billion.

IQOS plan to land in the United States is exposed: pilot in Atlanta first

As early as March 31, 2017, PMI had submitted a PMTA application to the US FDA Tobacco Products Center. PMTA is a prerequisite for commercialization of new tobacco products in the United States. The results of the PMTA will determine the marketing authorization of IQOS;PMTA is independent of the US FDA's MRTPA, which the company submitted to the same platform on December 5, 2016. As of February 9, 2019, the IQOS MRTPA review is in the public comment stage, and the window will close on February 11, and the FDA will provide subsequent review results.

Until April 30, the FDA approved IQOS's application for landing in the United States.

Howard Willard, Chairman and CEO of Altria, said that subject to FDA approval, Philip Morris International USA will first introduce IQOS for adult smokers in Atlanta, USA, and intends to make full use of the company's first-mover advantage in heating tobacco and occupy the market as much as possible.

“IQOS has achieved great success internationally. We are very excited to bring this platform to adult smokers in the United States.& ldquo; Howard said.

According to statistics, there are approximately 40 million adult smokers in the United States. IQOS provides an innovative cigarette alternative, changing from lighting traditional cigarettes to high-temperature roasting, which is considered to be the mainstream upgrade of tobacco in the future.

According to PMI data, more than 7 million people around the world have fully switched to IQOS.

Philip Morris International USA will begin testing a range of marketing, sales and consumer engagement methods to increase awareness of IQOS among adult smokers, promote guided testing of products and provide post-purchase support, while taking steps to minimize impact on unintended audiences.

To support the launch of IQOS, Philip Morris International USA plans to have multiple retail stores in Atlanta, including the IQOS store in Lenox Square, numerous mobile retail units and HeatStick distributors in approximately 500 retail trading partner stores, including Circle K, Murphy USA, QuikTrip, RaceTrac, Speedway and select other retail partners.