HNB market heats up

KT&G said today it would put a new heat-not-burn (HNB) product on the South Korean market next week, according to a Yonhap News Agency story.

The product, called lil plus, will be in stores on Wednesday, the first anniversary of the debut of HNB products on the local market.

Phillip Morris launched IQOS in South Korea one year ago and the company plans to host a media day to mark the anniversary.

KT&G said its choice of roll-out day for the new product was unrelated to the first anniversary of the local launch of IQOS, but industry watchers noted that KT&G had originally been expected to release the new product in June or July.

The story said the launch of the new product appeared designed to take advantage of the need for consumers to replace HNB devices. KT&G was quoted as saying that HNB devices should be replaced after about a year; so the replacement demand within the next three months was estimated at more than 500,000.

Meanwhile, industry leader Phillip Morris and British American Tobacco, which sells the glo device, are said to be poised to roll out next-generation products with improved functions, though their launch dates are yet to be announced.

Currently, HNB products account for about 10 percent of all tobacco sales in South Korea, a figure that is expected to reach 30 percent in 2020.

The story said that while tobacco companies did not disclose their shares of the HNB products market, IQOS was estimated to account for 50-60 percent, with lil and glo making up the rest.

According to data from the government and industry sources, 163 million 20-piece packs of HNB products were sold in South Korea between May 2017 and March 2018.