For the complete report, get in touch with us at : info@netscribes.com The Tobacco Market in China is part of Netscribes’ Food & Beverage Industry Series reports. China is the largest cigarette producer and consumer in the world. The Chinese tobacco market is poised to witness phenomenal growth owing to rise in smokers’ population coupled with changing lifestyle and affordability. The report begins with the global tobacco market overview comprising the global market size and expected growth until 2012. The global cigarette production and consumption country-wise is also included along with the growth in global cigarette consumption. The global cigarette consumption pattern entails the share of male and female smokers in developed as well as developing countries worldwide. The domestic tobacco market overview provides details on the industry size in terms of tobacco sales and projected growth for the period 2010-15. This section includes the growth of cigarette consumption. The future growth prospect of Chinese tobacco industry is discussed in detail. This is followed by the share of total tobacco consumers and the share of smokers in the urban and rural population, specifying the share of overall smoking population, share of male smoking population and share of female smoking population for both urban and rural population. Also, mentions the share of smokers in the various age groups, specifying the share of overall smoking population, share of male smoking population and share of female smoking population for each age group. The segment for the price assessment of cigarettes sold in China has been provided in the report. Further, the important tobacco leaf producing provinces are mapped. The report provides detailed information about the exports and imports of tobacco products. It provides country-wise import and export for the year 2010. Import and export data provided are in value terms. Factors driving the growth of tobacco market in China include growing smokers’ population, accelerating urbanization and changing lifestyle, young smokers to drive cigarette sales and gift culture. Key players operating in the market also face challenges which are impeding their development and growth. Major challenges identified include increasing consumer awareness on health issues, rising medical costs and ban on smoking in public places and media advertising. The report also highlights the role of government in the country’s tobacco sector. It evaluates the steps taken by the government in view of consolidating the tobacco industry. The plan adopted by the government organization in order to enhance international competitiveness is also given. Further, an overview of various research and development initiatives undertaken by the government, particularly those for the ‘low-tar’ or ‘less harmful’ cigarettes are also discussed briefly. Emerging trends in the tobacco market include rising female smokers, growing popu

1. Tobacco Market – China
February 2012

2. Executive Summary
 Tobacco industry plays a significant role in supporting the Chinese economy, contributing ~x% of the central
Market government’s annual revenue
 Tobacco sales is expected to reach USD a bn in 20‐‐, growing at a CAGR of x1 % from b bn in 20‐‐
Drivers: Challenges:
Drivers &
‐ Growing Smokers’ Population
‐ Accelerating Urbanization and Changing Lifestyle
LE ‐ Increasing Consumer Awareness on Health Issues
‐ Rising Medical Costs
P
Challenges ‐ Young Smokers to Drive Cigarette Sales ‐ Nicotine Replacement Therapy
‐ Gift Culture ‐ Ban on Smoking in Public Places and Media Advertising
Government
Initiatives AM
 Role of the Government of China
S
 Chinese Tobacco Industry – Major Contributor to the Revenues of Chinese Govt.
 Industry Consolidation and Health Issues
 “532” and “461” Plans
 Research and Development
 Rising Female Smokers
 Growing Popularity of ‘Low‐Tar’ Cigarettes
Trends  Brand Promotion through Charity
 Innovative Marketing Strategies
 Strategies to Capture Health‐Concerned Consumers
Major Players
Competition
Company 1 Company 2 Company 3 Company 4
TOBACCO MARKET IN CHINA 2012.PPT 2

3. •Market Overview
• Global
• China
LE
MP
•Export‐Import
S A
•Drivers & Challenges
•Government Initiatives
•Trends
•Investment Opportunity
•Competition
•Key Takeaways
TOBACCO MARKET IN CHINA 2012.PPT 3

4. Developing nations provide good opportunity for growth of
the tobacco industry globally
Global Tobacco Market – Overview (1/2) Market Size and Growth
• Tobacco plays a major role in supporting various USD bn
economies worldwide x%
500 a2
 Global tobacco market is expected to amount USD a2 bn in 400 a1
20‐‐, growing at a CAGR of x % from USD a1 bn in 20‐‐
300
y countries covering ~z mn hectares of world’s
• Presently tobacco agriculture is prevalent in more than
LE
200
100
P
agricultural land 0
20‐‐ 20‐‐e
M
• Two‐thirds of the world’s tobacco is collectively
Major Tobacco Producing Nations
A
produced by Country 1, Country 3, Country 2 and
Country 4
S
• Due to less stringent local regulations, Tobacco market
of the developing nations is on the rise b3%
b4% b5%
b6%
b7%
b9%
b8%
Country 1
Country 2
Country 7
Country 8
• Developing countries account for p% of the global b11% Country 3 Country 9
b2% b10%
tobacco production with China maintaining its lead, Country 4 Country 10
accounting for q% of global tobacco production Country 5 Rest of
the world
 Developing countries account for r% of the global tobacco
Country 6
exports while the remaining t% comes from the developed b1%
countries
Source:
TOBACCO MARKET IN CHINA 2012.PPT 4

5. Cigarette smoking is the most popular form of tobacco
consumption worldwide
Global Tobacco Market – Overview (2/2) Global Cigarette Consumption
• Global cigarette consumption is expected to reach a4tr bn sticks
sticks by 20‐‐ y%
8,000
a2 a3
 Annual global cigarette sales is over x tr cigarettes with ~y mn a1
cigarettes sold per minute 6,000
 Worldwide daily cigarette consumption is ~z bn sticks 4,000
LE
• Presently, the total global smoking population stands at 2,000
an estimated p bn
MP
 According to WHO, global smoking population is estimated to
grow at a CAGR of q% to r% during 20‐‐‐20‐‐
0
20‐‐ 20‐‐ 20‐‐e
A
 China is the world’s leading tobacco consumer, accounting for
S
b1% of the global tobacco consumption followed by EU, India
and Russia accounting for b2%, b3% and b4% respectively
• Currently, ~s bn men smoke, dominating the world’s
Global Tobacco Consumption (2010)
b3%
b4% b5%
b6%
b7%
b8%
Country 1
Country 2
Country 7
Country 8
total smoking population compared to around t mn Country 3 Country 9
b9% Country 4 Country 10
female smokers b11%
b2% b10%
Country 5 Rest of
the world
Gender Developed Country Developing Country
Country 6
Male Smokers x1% y1%
Female Smokers x2% y2% b1%
Source:
TOBACCO MARKET IN CHINA 2012.PPT 5

6. China is the largest cigarette producer and consumer in the
world
Domestic Tobacco Market – Overview Market Size and Growth
• China is the world’s largest and fastest growing tobacco USD bn
market 250 x% a6
a5
200 a4
• It has the world’s largest smoking population, more a3
a2
150 a1
than the total population of the U.S.
LE
100
 In 20‐‐, there were more than p mn smokers in China,
50
P
comprising a quarter of the world’s total smoking population
0
– Of this, more than q mn were women 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e 20‐‐e
S AM
 Atleast one cigarette is smoked in China out of every three
cigarettes smoked worldwide
 Tobacco sales is expected to reach USD a6 bn in 20‐‐, growing
Growth of Cigarette Consumption
no. of sticks
3 b3
y%
b4 b5 b6
at a CAGR of x % from USD a1 bn in 20‐‐ b1 b2
• In 20‐‐, Chinese smokers consumed b1 tr cigarettes 2
 Cigarette consumption will amount to ~b6 tr sticks by 20‐‐, 1
with a CAGR of y % during 20‐‐ ‐20‐‐
0
20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e 20‐‐e
Source:
TOBACCO MARKET IN CHINA 2012.PPT 6

7. Smoking Population in China (1/3)
Chinese Smokers – Region wise and Gender wise (2010)
LE
100%
Share of Total Tobacco Consumers
a3%
MP 80%
60%
a1%
a2%
A
b3%
40%
S
b1%
20% b2%
0%
Overall Male Female
Smokers
Urban Population Rural Population
Non‐Smokers
100% c3% 100% e3%
c1% e1%
80% c2% 80%
e2%
60% 60%
d3% f3%
40% d1% 40% f1%
d2% f2%
20% 20%
0% 0%
Overall Male Female Overall Male Female
Source:
TOBACCO MARKET IN CHINA 2012.PPT 7

8. Smoking Population in China (2/3)
SAMPLE
Chinese Smokers – Age wise and Gender wise (2010)
Age Group 15 to 24 yrs Age Group 25 to 44 yrs
100% a3% 100% p3%
a1% p1%
80% a2% 80%
p2%
60% 60%
b3% q3%
40% b1% 40% q1%
b2%
20% 20% q2%
0% 0%
Overall Male Female Overall Male Female
Smokers
Non‐Smokers
Age Group 45 to 64 yrs Age Group 65 +
100% c3% 100% e3%
c1% e1%
80% c2% 80%
e2%
60% 60%
d3% f3%
40% d1% 40% f1%
d2% f2%
20% 20%
0% 0%
Overall Male Female Overall Male Female
Source:
TOBACCO MARKET IN CHINA 2012.PPT 8

9. Cheap cigarettes available in China contributes to very high
level of smoking
Cigarette Price Assessment
• Cigarettes in China are cheaper compared to the international standards
• In Dec 20‐‐, the most popular cigarette brands in China were sold for ~USD x which is in
compliance with the Global Adult Tobacco Survey (GATS) results
 According to GATS, y% of smokers spent USD x or less on 20 manufactured cigarettes
Price of 20 Piece Pack of Marlboro (20‐‐) – Country wise Comparison
LE
P
USD
a1
15
10
5
a2
a3
S
a4
AM a5
a6
0
Country 1 Country 2 Country 3 Country 4 Country 5 Country 6
Source:
TOBACCO MARKET IN CHINA 2012.PPT 9

10. Tobacco leaf is produced throughout the country, making
LE
China the world’s largest producer of tobacco
MP
Tobacco Leaf Hubs in China
• Out of x provinces in China, y provinces grow tobacco leaf
S A
• In terms of both growing tobacco and cigarette manufacturing Province 1, Province 2, Province 3 and Province 4 are
the most important provinces, together growing z % of the total tobacco leafs grown in China
Province 1
Province 2
Province 3
Province 4
Source:
TOBACCO MARKET IN CHINA 2012.PPT 10

11. Over the past five years, there has been a consistent trade
SAMPLE
surplus from the Chinese tobacco industry
Tobacco – Exports (HS Codes Value‐wise) Exports Country Split – 20‐‐
USD mn
c4% c6%
1,200 c5% c61%
x% a5 c3% Region 1
c62%
1,000 a4 c63%
Region 2
a3 c6% c64%
800 a2 Region 3
a1 c2%
600 Region 4
c65%
400 Region 5
200 c1% Others
0
20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ Country 1 Country 3 Country 5
Country 2 Country 4 Others
Tobacco – Imports (HS Codes Value‐wise) Imports Country Split – 20‐‐
USD mn
y%
1,000 b4
d4% d6%
Country 1
b3 b5 d5%
800 d3% Country 2
600 b2 Country 3
b1
Country 4
400
d2% Country 5
200 d1%
Others
0
20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐
Source:
TOBACCO MARKET IN CHINA 2012.PPT 11

12. Drivers & Challenges – Summary
Challenges
Increasing Consumer Awareness on
Smoking Related Health Issues
Rising Medical Costs
Drivers
Growing Smokers’ Population Nicotine Replacement Therapy
Accelerating Urbanization and Ban on Smoking in Public Places and
Changing Lifestyle Media Advertising
Young Smokers to Drive Cigarette
Sales
Gift Culture
TOBACCO MARKET IN CHINA 2012.PPT 12

13. Increasing population has augmented the domestic demand
for cigarettes
Growing Smokers’ Population Impact
• Finding 1
• Finding 2
• Finding 3
 Sub‐finding 2
Rise in Total Population Consumer Base in 20‐‐ Comparison of Female Smokers – 20‐‐
Male Female
mn %
x%
1,500 a3 a4 20 Point 1
a1 a2 b1
f1%
15
1,000 m2%
m1%
10
500
f2% 5 b2
0 0
20‐‐ 20‐‐ 20‐‐e 20‐‐e Smokers Non-Smokers Country 1 Country 2
Source:
TOBACCO MARKET IN CHINA 2012.PPT 13

14. Accelerating urbanization coupled with changing lifestyle
boosts cigarette sales
Accelerating Urbanization and Changing Lifestyle Impact
• Finding 1
Increasing Rate of Urbanization Per Capita Urban Disposable Income
x% USD
mn a4 % y%
a3 2,000
a2 b4 c1 c2
800 a1 b3 60
b2
b1 1,500
600
40
1,000
400
20 500
200
Smoking high
0 0 0 end cigarettes or
20‐‐ 20‐‐ 20‐‐e 20‐‐e Jan‐Jun 20‐‐ Jan‐Jun 20‐‐ cigars are often
Urban population Urbanization Rate (RHS) considered as
Sales of Grade 1 Cigarette the symbol of
wealth by the
• Finding 2 mn affluent class
 Sub‐Finding 1 500 d3
 Sub‐Finding 2 z%
400
300 d2
200 d1
100
0
Source: 20‐‐ 20‐‐ 20‐‐e
TOBACCO MARKET IN CHINA 2012.PPT 14

15. Young Chinese smokers add to the rising sales of cigarettes
in the country
Young Smokers to Drive Cigarette Sales Impact
• Finding 1
 Sub‐Finding 1
 Sub‐Finding 2
 Sub‐Finding 3
Share of Young Population in Total Population (20‐‐) 20‐‐ China Tobacco Control Study
Age Results
~x mn young Under 18 • Result 1
a1% potential smokers
• Result 2
a2% 13 to 19 yrs • Result 3
< 9 yrs • Result 4
10 yrs to 19 yrs
a3%
> 19 yrs
Survey by Peoples Daily
Category Results
Point 1 Elementary and high • Result 5
school students • Result 6
Result 7
Source:
TOBACCO MARKET IN CHINA 2012.PPT 15

16. Rising health concerns in consumers and growing awareness
impedes the future prospects of the tobacco sector
Increasing Consumer Awareness on Smoking Related Health Issues Impact
• Finding 1
 Sub‐finding 1
– Sub‐finding 2
• Finding 2
 Sub finding 3
 Finding 3
– Sub‐finding 4
Deaths Due to Cancer (20‐‐) Avg. Deaths Resulting from Tobacco Related Diseases
mn
Equivalent to y % of all
4 b2 tobacco related deaths
a2% Lung cancer cases q%
increased x% since 19‐‐ in the world
3
2
b1
Lung Cancer 1
a1%
Other Forms of Cancer
0
20‐‐ 20‐‐e
Source:
TOBACCO MARKET IN CHINA 2012.PPT 16

17. Chinese tobacco industry contributes to a large proportion
of the government revenue
Chinese Tobacco Industry – High Source of Revenue
• Finding 1
 Sub‐finding 1
 Sub‐finding 2
• Finding 2
Rise in Tax Paid by CNTC Rise in Profits Shared by CNTC
USD bn USD bn y%
150 x% 100 b3%
a3 b2%
80 b1%
100 a2
a1 60
40
50
20
0 0
20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐
Source:
TOBACCO MARKET IN CHINA 2012.PPT 17

18. Consolidation of the tobacco industry has been achieved by
continuous restructuring of the sector
Industry Consolidation and Health Issues
• Finding 1
 Sub‐finding 1
 Sub‐finding 2
Decline in No. of Cigarette Brands Decline in No. of Tobacco Companies
no.
no.
1,500
a1 200 b1
x% y%
1,000 150
100
500
a2 50 b2
0 0
20‐‐ 20‐‐ 20‐‐ 20‐‐
Source:
TOBACCO MARKET IN CHINA 2012.PPT 18

19. The “532” and “461” plans are adopted by the government
in view of augmenting international competitiveness
“532” and “461” Plans
• Finding 1
“532” Plan
x1 y1
No. of
x2 Brands y2
To Generate
x3 y3
“461” Plan
• Finding 1
 Sub‐finding 1
 Sub‐finding 2
Source:
TOBACCO MARKET IN CHINA 2012.PPT 19

20. Trends – Summary
Rising Female Smokers
Strategies to Capture Health‐ Growing Popularity of ‘Low‐
Concerned Consumers Tar’ Cigarettes
Key
Trends
Brand Promotion Through
Innovative Marketing Strategies
Charity
TOBACCO MARKET IN CHINA 2012.PPT 20

21. Annual sales volume of ‘low‐tar’ cigarettes in China is
expected to reach z bn sticks by 20‐‐
Growing Popularity of ‘Low‐Tar’ Cigarettes
• Finding 1
Sharp increase in
 Sub‐finding 1
the output and
sales of ‘low‐tar’
Jan – Jun 20‐‐ cigarettes
Category No. of Cases Y‐O‐Y Growth
Tar level of 8mg Output x1 mn y1 %
per cigarette or
lower Sales Volume x2 mn y2 %
No. of Cigarettes Share in Total ‘Low‐Tar’ Cigarette
Key ‘low‐tar’ Output x3 bn y3 %
cigarette brands Sales Volume x4 bn y4 %
Competition Scenario Annual Sales Volume *
No. of cigarettes
bn
a4
400 T%
• Finding 3
200
a2 a3
a1
0
20‐‐ 20‐‐ 20‐‐e 20‐‐e
Source:
TOBACCO MARKET IN CHINA 2012.PPT 21

22. All along the tobacco value chain, there are essentially two
products that allow the investors to gain industry exposure
•Finding 1
•Finding 2
•Finding 3
Packaging Flavoring
Finding 4 Finding 5
Value Addition Value Addition
• Finding 9
• Finding 6
• Sub‐finding 1
• Finding 7
• Sub‐finding 2
• Finding 8 • Sub‐finding 3
Important Companies Important Companies
• Company 1
• Company 2 Investment • Company 5
• Company 3 Opportunity
• Company 6
• Company 4
Source:
TOBACCO MARKET IN CHINA 2012.PPT 22

23. Domestic Company – Company 1
Company Information Locations – China
Company 1
Corporate Address No. x, y Road, City 1, Province 1, Pin
code China
Tel No. ‐
Fax No. ‐
Website ‐
SAMPLE
Year of Incorporation 19‐‐
Products and Services
Category Products/Services
Tobacco products Product 1, Product 2, Product 3, Key People
Product 4 and Product 5
Name Designation
Person 1 President
Person 2 Discipline Inspection Head
Person 3 Director
Person 4 Vice Director
Source:
TOBACCO MARKET IN CHINA 2012.PPT 23

24. Domestic Company – Company 1
Key Recent Developments
Description News
• Company 1 is the largest single manufacturer of tobacco products in the world
Overview
• Company 1 falls under the authority of the organization 1, organization responsible for enforcing the
tobacco monopoly in Country 1
 At present, ~x domestic tobacco companies operate as a subsidiary of the government owned company 1
• In Dec 20‐‐, Company 2 laid the foundation of a new plant in location 1, country 1 and it is estimated to
Strategic alliances generate y metric tons of acetate tow on its completion, which will be operated by Company 3, a
partnership firm with Company 1
• Company 1 is likely to adopt three main strategies to expand into the international market and enhance
foreign competitiveness of Chinese brands
1. Strategy 1
Overseas expansion 2. Strategy 2
3. Strategy 3
SAMPLE
• Company 1 plans to invest USD z mn for the development of Company 4, which in turn will contribute to
company 4’s efforts to develop markets in Eastern Europe
Source:
TOBACCO MARKET IN CHINA 2012.PPT 24

25. Public Companies – Summary
Net Income
9.0 Size of the Bubble represents Market
8.5 Capitalization in USD bn
8.0
7.5
m1
7.0
6.5
6.0
5.5
5.0
4.5 m2
4.0
3.5
3.0
2.5
2.0
1.5 m3
1.0
0.5
0.0 Revenue
0 5 10 15 20 25 30 35 40 45 50 55 60
Company 1 Company 2 Company 3
Source:
TOBACCO MARKET IN CHINA 2012.PPT 25

26. Foreign Company – Company 2
Company Information
SAMPLE Locations – China
Company 2
Corporate Address x, y Avenue, City 2, City 2 Pin‐code,
Country 2
Tel No. xxx‐yyy‐zzz
Fax No. ‐
Website ‐
Year of Incorporation 19‐‐
Ticker Symbol xx
Stock Exchange yyyy
Products and Services
Category Products/Services
Cigarettes Brand 1, Brand 2, Brand 3, Brand 4, Brand 5, Key People
Brand 6, Brand 7, Brand 8, Brand 9, Brand 10
Cigarette Production Processing of the tobacco leaf, production of Name Designation
the cigarettes and packaging and preparation
for distribution
Person 1 CEO
Tobacco Type 1, Type 2, Type 3 Person 2 Chief Financial Officer
Other Tobacco Products Type 4, Type 5, Type 6 Person 3 Chief Operating Officer
Person 4 Senior Vice President
Source:
TOBACCO MARKET IN CHINA 2012.PPT 26

27. Foreign Company – Company 2
Financial Snapshot
SAMPLE Key Ratios
y‐o‐y
Revenue Revenue Profit Particulars change (20‐ 20‐‐ 20‐‐ 20‐‐ 20‐‐
USD bn USD bn ‐‐‐‐)
Profit / Loss
30 a2 a4 8
Profitability Ratios
a1 a3
Operating Margin ‐ ‐ ‐ ‐ ‐
6
20 Net Margin ‐ ‐ ‐ ‐ ‐
4 Profit Before Tax Margin ‐ ‐ ‐ ‐ ‐
10
2 Return on Equity ‐ ‐ ‐ ‐ ‐
0 0 Return on Capital Employed ‐ ‐ ‐ ‐ ‐
2007 2008 2009 2010 Return on Working Capital ‐ ‐ ‐ ‐ ‐
Return on Assets ‐ ‐ ‐ ‐ ‐
Financial Summary Return on Fixed Assets ‐ ‐ ‐ ‐ ‐
Cost Ratios
• The company incurred a net profit of USD x1 bn in FY 20‐‐, as
Operating costs (% of Sales) ‐ ‐ ‐ ‐ ‐
compared to net profit of USD x2 bn in FY ‐‐
Administration costs (% of
‐ ‐ ‐ ‐ ‐
• The company reported total Income of USD x3 bn in FY 20‐‐, Sales)
registering an increase of x4% over FY 20‐‐ Interest costs (% of Sales) ‐ ‐ ‐ ‐ ‐
• The company earned an operating margin of x5% in FY 20‐‐ an Liquidity Ratios
Current Ratio ‐ ‐ ‐ ‐ ‐
increase of x6 percentage points over FY 20‐‐
Cash Ratio ‐ ‐ ‐ ‐ ‐
• The company reported debt to equity ratio of x7 in FY 20‐‐, an Leverage Ratios
increase of x8%over FY 20‐‐ Debt to Equity Ratio ‐ ‐ ‐ ‐ ‐
Debt to Capital Ratio ‐ ‐ ‐ ‐ ‐
Financial Summary Interest Coverage Ratio ‐ ‐ ‐ ‐ ‐
Indicators Value (05/01/2012) Efficiency Ratios
Market Capitalization (USD) Fixed Asset Turnover ‐ ‐ ‐ ‐ ‐
y1 bn
Asset Turnover ‐ ‐ ‐ ‐ ‐
Total Enterprise Value (USD) y2 bn Current Asset Turnover ‐ ‐ ‐ ‐ ‐
EPS (USD) y3 Working Capital Turnover ‐ ‐ ‐ ‐ ‐
PE Ratio (Absolute) y4 Capital Employed Turnover ‐ ‐ ‐ ‐ ‐
Source: Improved Decline
TOBACCO MARKET IN CHINA 2012.PPT 27

28. Foreign Company – Company 2
Key Business Segments
SAMPLE Key Geographic Segments
European Union Asia
x% Eastern Europe, Middle East Latin America and Canada
100%
Point 1 & Africa Region
100%
50% 36% 34%
50% 27% 28%
0% 26% 28%
20‐‐ 0% 11% 11%
Cigarettes and Other Tobacco Products 2009 2010
Key Recent Developments
Description News
• Company 2, through its subsidiaries manufactures and sells cigarettes and other tobacco products in x
Overview
countries, via y production facilities in z different countries and produces over w bn cigarettes per annum
• In 20‐‐, Company 1 started the production and distribution of ‘Brand 1’ cigarettes in Country 1, in
Strategic alliances exchange of a 50‐50 JV between Company 2 and Company 3, which would support the overseas
expansion of Chinese brands
• In Apr 20‐‐, Person 1, chief financial officer of Company 4, was appointed as the independent director of
Executive/Board changes
Company 2, with the hope that the new director could act as a channel to expand sales in Country 1
Source:
TOBACCO MARKET IN CHINA 2012.PPT 28

29. •Market Overview
•Export‐Import
•Drivers & Challenges
•Government Initiatives
• Trends
•Investment Opportunity
•Competition
•Key Takeaways
TOBACCO MARKET IN CHINA 2012.PPT 29

30. China, with x mn smokers accounting for more than y% of
SAMPLE
global total, has the world’s largest tobacco industry
Tobacco industry has become a leading industry in China's national economy and is playing a guiding and supporting
role in the overall national economic situation
Opportunities in the Government
Market Size
Market Initiatives
USD bn Government plays the
Growing population of
300 x% a6
dual role of both the
smokers and young consumer a5
200 a3 a4 producer and regulator
base act as a driver for the a1 a2
of the Chinese tobacco
growing demand of cigarettes 100
industry
in the country 0
Taxes from tobacco
20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e 20‐‐e
industry is a major
Accelerating urbanization
source of revenue for
coupled with changing the government and it
lifestyle, resulting in daily has adopted the “532”
consumption of cigarettes, and “461” five year
catalyzes growth of the strategy in order to
Challenges
tobacco sector enhance international
• Increasing Consumer Awareness on Health Issues competitiveness of the
domestic brands
Players are exploiting the • Rising Medical Costs
Research and
Chinese gift giving culture • Nicotine Replacement Therapy development ‘low‐tar’
which further boosts the
• Ban on Smoking in Public Places and Media cigarettes is one of the
tobacco market in China major government’s
Advertising
strategies
TOBACCO MARKET IN CHINA 2012.PPT 30

31. Thank you for the attention
Tobacco Market ‐ China report is a part of Netscribes’ Food & Beverage Industry Series.
For more detailed information or customized research requirements please contact:
Jitendra Punjabi
Phone: +91 33 4064 6215
E‐Mail: jitendra.punjabi@netscribes.com
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TOBACCO MARKET IN CHINA 2012.PPT 31