Rumors suggest heated tobacco products may formally enter China’s tobacco monopoly system, with pilot launches possibly led by provincial tobacco companies.
HNB products are confirmed to belong to the national tobacco monopoly system and are expected to officially launch for sale early next year. The provincial tobacco companies with representative products (such as those in Yunnan, Sichuan, Hubei, etc.) will be the first to test the waters, using offline promotional methods similar to IQOS flagship stores. The national bureau will vigorously promote HNB products through public opinion influence and online control to pave the way for HNB.
Specifically: (1) Cartridges -- specialty products, managed according to existing monopoly laws, with supplier standards referring to the qualifications and conditions of traditional cigarette suppliers. The retail price of cartridges is expected to be between 300-500 yuan per pack.
(2) Smoking devices -- are not expected to be under monopoly jurisdiction, but suppliers of smoking devices need to cooperate with industrial companies in the early stages for R&D, such as customizing the heating curves, heating methods, and material selection based on different tobacco leaf selections and flavor adjustments. In the initial promotion of HNB, some brands will choose marketing strategies that offer smoking devices with the purchase of cartridges, with the retail price of smoking devices around 400-600 yuan per set, and a depreciation cycle of about six months. Foreign cigarettes represented by IQOS still cannot enter the domestic market, and there is currently no intention to sell "foreign cigarette quotas."
Source: Blue Hole New Consumption Report
