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 Japan has become a key testing ground for the two companies and
their new, real tobacco e-smokes as they grapple with shrinking
demand for traditional cigarettes in other developed countries.
Philip Morris, the world's largest tobacco company, has postponed
the nationwide rollout of its iQOS to April 18.
"We believe that the success of iQOS commercialization in Japan will
accelerate its global expansion," Philip Morris Japan president Paul
Riley told Reuters.
Japan Tobacco CEO Mitsuomi Koizumi told an earnings briefing in
February: "We have very high expectations for growth of the
so-called tobacco vapor category in five years or so from now."
The iQOS is a tobacco stick that is heated just enough to produce an
aerosol but not combust. The company is betting the presence of real
tobacco will make it more satisfying to smokers than existing
e-cigarettes.
The new device, priced at 9,980 yen ($89), appears similar to other
e-cigarettes in that it is pen-shaped and battery-powered, and is
heated to release tobacco vapor.
A key distinction is the refills, sold as Marlboro HeatSticks. Most
e-cigarettes sold elsewhere use nicotine-laced liquid, which is
heavily regulated in Japan. A pack of 20 HeatSticks sells for 460
yen, the same as regular Marlboro cigarettes.
Philip Morris has introduced the products in major cities in
Switzerland, Italy and other countries, but Japan is the first
country it plans a nationwide release.
The company had originally planned to sell the product throughout
Japan on March 1, but postponed the launch to the end of the month
due to a potential supply shortage after it saw
stronger-than-expected sales in 12 prefectures where it has been
test marketing.
The company estimates the market share of Marlboro HeatSticks
reached 2.4 percent in Tokyo at the end of January.
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Japan Tobacco, which commands about 60 percent of Japan's cigarette
market and is the world's third-largest tobacco maker, has also got
in on the action by acquiring two overseas e-cigarette makers in the
past two years.
In Japan, it has launched the Ploom TECH, priced at 4,000 yen and
sold with 460-yen packs of five capsules. Ploom TECH's selling point
is that vapor generated from a liquid cartridge passes through the
capsules' granulated tobacco, creating a taste the company says is
close to the real thing.
"There is definitely a need for products that are smokeless but are
still satisfying as cigarettes," said Masanao Takahashi, director at
Japan Tobacco's emerging products marketing division.
Like iQOS, Ploom TECH's initial launch in the southern Japanese city
of Fukuoka proved so popular that the shipment of the device were
suspended after a week due to a supply shortage.
It is currently working on a nationwide launch and is also eyeing a
global expansion later this year.
(Editing by Nick Macfie)
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