Philip Morris: "Smokers Are Shifting from Conventional Cigarettes to Non-Combustible Products"

Philip Morris Announces 'Integrated Report'
Non-Combustible Products Account for 29.1% of Net Sales... Up 5.3P YoY

[Asia Economy Reporter Eunmo Koo] It has been revealed that smokers worldwide are abandoning combustible conventional cigarettes and switching to non-combustible products such as electronic cigarettes.

According to the Integrated Report 2021 released by Philip Morris International (PMI) on the 7th, the number of non-combustible product users last year was 21.7 million, an increase of 18.6% (3.4 million) compared to one year earlier (18.3 million).

Among them, the number of adult users who quit smoking conventional cigarettes and switched to non-combustible products increased by 2.3 million to reach 15.3 million. The share of non-combustible products in net sales also rose by 5.3 percentage points from the previous year to 29.1%. During the same period, the number of countries where the electronic cigarette IQOS was launched increased from 64 to 71.

In particular, within PMI, the share of net sales from non-combustible products in the East Asia region, including South Korea, was 59%, the highest in the world. This was followed by Eastern Europe (37%) and the EU (33%) in terms of net sales share of non-combustible products.

Last year, 99% of PMI’s total research and development (R&D) expenditure was allocated to non-combustible products, indicating that most R&D costs were invested in these products. The investment amount was $566 million, a 14% increase from $495 million in 2020. It is also notable that the proportion of female employees among all management-level staff reached 39.7%, approaching this year’s target of surpassing 40%.

Carbon dioxide emissions decreased by 33% compared to 2019. If emissions from raw material procurement, service provision, and various business-related activities are all included, the reduction level is 18%. The recycling rate of IQOS devices also improved by 2 percentage points from one year earlier, reaching 86%.

Baek Young-jae, CEO of Korea Philip Morris, said, "It is very encouraging that the East Asia region, including Korea, is making a significant contribution to Philip Morris’s vision of a ‘smoke-free future.’ We will continue to strive to provide better alternatives to adult users in the domestic market."

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