IQOS ILUMA Booms Across Europe and Asia Despite Not Yet Passing PMTA in the U.S.

Philip Morris International's HNB product IQOS ILUMA series has rapidly expanded in the global market within just two years. Although IQOS ILUMA has not yet passed the PMTA in the U.S., it has been highly profitable overseas.

According to the Q2 2023 financial report released by Philip Morris at the end of July, the overseas market remains strong. The revenue from Philip Morris' RRP business (primarily from IQOS sales) reached $3.2 billion, accounting for 35.4% of total revenue; total sales of tobacco sticks reached 31.4 billion units, with a 16% increase in sales after excluding the impact of channel inventory changes, thanks to strong performance in the European and Japanese markets. Although IQOS ILUMA has not yet passed the PMTA in the U.S., it has been highly profitable overseas.

Recently, Philip Morris Bulgaria held a launch event at the Plovdiv Event Center to introduce the new product IQOS ILUMA. Prior to this, Bulgarian consumers had already submitted about 10,000 pre-orders for the new product. Before Bulgaria, IQOS ILUMA had already entered markets in Japan, Switzerland, Spain, South Korea, and Italy, spanning across Europe and Asia.

In August 2021, IQOS ILUMA was launched in Japan, introducing the all-new heated non-combustible devices "IQOS ILUMA" and "IQOS ILUMA PRIME" along with 11 flavors of dedicated tobacco sticks "TEREA," claiming that these two models are the first IQOS devices without heating plates in history. At that time, the price of IQOS ILUMA was 7,980 yen, approximately 470 RMB; IQOS ILUMA PRIME was priced at 12,980 yen, approximately 764 RMB.

In November 2021, Philip Morris launched "IQOS ILUMA ONE" in Switzerland. At that time, the Swiss IQOS website priced it at 69 Swiss francs, approximately 470 RMB. This IQOS ILUMA ONE will be available in five colors for users to choose from.

Following Japan and Switzerland, IQOS ILUMA entered Spain in March 2022. At that time, the dedicated tobacco sticks HEETS were selling very well in Spain.

In October 2022, IQOS ILUMA was officially launched in South Korea. Previously, it was learned at the launch event in Seoul that ILUMA features a side-opening design and is available in five colors; ILUMA PRIME has a half-opening design and comes in four colors. The heating rods are identical, and both products can be used twice on a single charge. At that time, IQOS ILUMA was priced at 99,000 won, approximately 508 RMB; IQOS ILUMA PRIME was priced at 139,000 won, approximately 714 RMB.

In December 2022, Philip Morris also launched IQOS ILUMA ONE in the Italian market, increasing the market share of HNB tobacco sticks by 3.5 percentage points.

In September 2023, Philip Morris announced that it would submit the PMTA for its IQOS ILUMA products in the U.S. this month.

Analysts from Zheshang Securities stated that ILUMA is rapidly expanding, with strong user retention. The U.S. market is expected to see six new market expansions in Q2 2024. As of the end of July this year, IQOS ILUMA has been launched in 23 markets, with plans to enter 50 markets by the end of the year. The market share in regions such as Japan, Italy, South Korea, and Spain has increased by 5.5%, 3.5%, 1.0%, and 0.9%, respectively, since the launch of the ILUMA product, with over 85% of IQOS in Japan, Switzerland, and Spain having been upgraded to ILUMA.

However, recently, Philip Morris CEO Jacek Olczak stated that due to growth being impacted in two major markets—Russia and Ukraine—the company's goal of generating most of its revenue from smoke-free products by 2025 may not be achievable.