1Q Liquid-type Electronic Cigarette Sales Plummet... Market Exit Process

Cigarette Sales Reach 810 Million Packs, Up 4.1% YoY... Down 13.6% Compared to Pre-Price Increase Levels

A convenience store in Seoul is collecting liquid-type electronic cigarettes.
[Image source=Yonhap News]

[Asia Economy Reporter Kwangho Lee] The sales of liquid-type electronic cigarettes (CSV) such as 'Juul' from Juul Labs Korea and 'Seed' from KT&G have sharply declined, leading to their phase-out from the market. This is the effect of the health authorities' recommendation to stop use in the second half of last year due to cases of lung damage and deaths, which led to the suspension of sales at convenience stores and duty-free shops.

According to the '2020 Q1 Tobacco Market Trends' announced by the Ministry of Economy and Finance on the 29th, CSV sales in the first quarter of this year were 900,000 pods (liquid container units, 1 pod is calculated as 1 pack), showing a decline every quarter.

CSV peaked at 9.8 million pods sold in the third quarter after its launch in May last year, then plummeted to 1 million pods in the fourth quarter, and further dropped to 900,000 pods in the first quarter of this year.

An official from the Ministry of Economy and Finance explained, "The Ministry of Health and Welfare, together with related ministries, issued three rounds of recommendations to refrain from use, stop use, and prepared related measures, so the impact is understood to be ongoing." Based on this trend, sales in the second quarter are expected to decrease further.

During the same period, sales of heated tobacco products such as 'IQOS' from Philip Morris Korea and 'Lil' from KT&G also decreased by 8.7% to 80 million packs compared to 90 million packs a year ago.

On the other hand, sales of conventional cigarettes increased by 5.7% to 730 million packs compared to 690 million packs a year ago.

Accordingly, total tobacco sales in the first quarter rose by 4.1% to 810 million packs compared to 780 million packs a year ago. However, compared to 940 million packs in the same period before the cigarette price hike in 2014, it decreased by 13.6%. This suggests that the effects of tobacco tax increases and smoking cessation policies are continuing.

Meanwhile, the excise tax revenue reached 2.7 trillion won per quarter, increasing by 23.8% due to the shipment volume (810 million packs) rising 24.4% compared to 650 million packs a year ago.

This content was produced with the assistance of AI translation services.