Analysis of International Vaping Sales and Trends in 2020

Philip Morris International: IQOS continues to post strong growth and has become the main pillar supporting the company’s performance.

Against the backdrop of a 9.3% year-on-year decline in revenue from traditional combustible cigarettes during the same period, new tobacco products have become the company’s main support for stabilizing performance and the primary driver for expansion in emerging markets.

During the COVID-19 pandemic in 2020, all of the company’s global HNB tobacco stick manufacturing plants remained in operation. Based on current sales trends, the company believes its finished goods inventory is sufficient to supply both IQOS devices and tobacco sticks for all IQOS markets.

Japan Tobacco: HNB tobacco stick sales grew rapidly, and the company’s share of the domestic reduced-risk product market reached 10%.

The company estimates that reduced-risk products account for about 25% of Japan’s total domestic tobacco market, while its own business holds about a 10% share of the domestic reduced-risk product segment.

British American Tobacco: Its vaping business performed strongly across multiple global markets, with Vuse as the flagship product.

At present, the company has submitted PMTA applications to the FDA in the United States for multiple Vuse products, which have now entered the substantive scientific review stage.

Imperial Tobacco: In fiscal 2020, new tobacco products contributed £200 million in revenue, but the pandemic had a major impact on results.

The company believes the decline in this business was due to:

1) HNB business: the key products launched in 2019 were the Pulze branded device and iD branded tobacco sticks. Promotion in two major Japanese cities fell short of expectations, and the company will continue optimizing the products based on consumer feedback;

2) Vaping business: mainly affected by the COVID-19 pandemic and the increasingly strict FDA regulation of vaping products in the United States, which is the company’s main market.

The company has already submitted PMTA applications to the FDA in the United States for multiple blu products in order to continue selling pods with a range of nicotine strengths and flavors in the U.S. market.