Market Research Report :Tobacco Market in China 2012
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Market Research Report :Tobacco Market in China 2012

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For the complete report, get in touch with us at : info@netscribes.com ...

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

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Market Research Report :Tobacco Market in China 2012 Presentation Transcript

  • 1. Tobacco Market – ChinaFebruary 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 AdvertisingGovernment  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 PlayersCompetition 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% countriesSource: 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‐‐eSource: 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 FemaleSource: 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 FemaleSource: 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  6Source: 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 4Source: 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% 151,000 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 0Source: 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 7Source: 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‐‐eSource: 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 2Source: 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‐‐eSource: 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 4Source: 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 DirectorSource: 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 EuropeSource: 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 3Source: 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 PresidentSource: 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 Canada100% 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 1Source: 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 Chinas 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 attentionTobacco Market ‐ China report is a part of Netscribes’ Food & Beverage Industry Series. For more detailed information or customized research requirements please contact:Jitendra PunjabiPhone: +91 33 4064 6215E‐Mail: jitendra.punjabi@netscribes.comAbout NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. TOBACCO MARKET IN CHINA 2012.PPT 31