Philip Morris Surpasses 29% Share of Non-Combustible Product Net Sales Last Year... "Targeting 50% by 2025"

[Asia Economy Reporter Eunmo Koo] Philip Morris International (PMI)'s plan to increase the sales proportion of non-combustible products to over 50% by 2025 is progressing smoothly.

PMI announced on the 22nd that as of the fourth quarter of last year, non-combustible products accounted for more than 30% of net sales. The overall net sales for last year also reached 29%, and in 10 countries, the net sales proportion of non-combustible products has already surpassed 50%.

PMI's net profit in the fourth quarter of last year grew by 8.4% compared to the previous quarter. This is interpreted as reflecting the overall increase in volume of non-combustible products, including the rise in IQOS users and the successful market entry of the new product 'IQOS Iluma' in the Japanese market.

During the same period, PMI's shipment of conventional cigarettes decreased by 3.6 billion sticks compared to the previous quarter, while tobacco sticks used in heated tobacco products increased by 18.9 billion sticks, showing solid growth in the non-combustible product sector, which influenced profit growth.

As the number of IQOS users increases, the brand power of 'HEETS,' the tobacco sticks exclusively for heated tobacco devices, is also rapidly growing. Last year, HEETS accounted for 13.2% of Philip Morris's total cigarette shipments. This has steadily increased from 5% in 2018, 8% in 2019, and 11% in 2020. Notably, HEETS recorded an average market share of 7.1% in countries where it was launched.

According to Philip Morris, as of the end of last year, the number of IQOS users was estimated at 21.2 million. Of these, approximately 72% are estimated to have completely quit smoking conventional cigarettes after switching to IQOS. In the fourth quarter of last year, about 800,000 new IQOS users were added.

Jacek Olczak, CEO of PMI, stated, "The goal of replacing all conventional cigarette products with non-combustible products can be achieved within 10 to 15 years in some countries if there is appropriate support from civil society and governments." He added, "If existing tobacco regulation policies are supplemented to encourage the industry and companies to develop and commercialize less harmful alternatives than conventional cigarettes, this change will accelerate."

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