Philip Morris Declares "The End of Marlboro"... Aiming to Reclaim the 'Dedicated Throne' with a 1%P Gap

"From now on, Marlboro will be sent to museums."

Korea Philip Morris announced its intention to shift its tobacco business focus to heated tobacco products, signaling the end of its flagship cigarette brand 'Marlboro' alongside the launch of a new heated tobacco device, 'IQOS.'

On the 5th, Korea Philip Morris held a press conference at Lotte Hotel Seoul in Jung-gu, Seoul, unveiling the new heated tobacco device series 'IQOS ILUMA i.' The company explained that the product name 'ILUMA i' was inspired by various words starting with the letter 'i,' such as innovative, intuitive, intelligent, and imaginative, reflecting Philip Morris's commitment to delivering a higher level of enjoyment to users through innovative technology.

The newly introduced IQOS ILUMA i series features three key functions. The most emphasized is the 'pause mode,' which allows users to temporarily suspend device use for up to 8 minutes by sliding down the holder's touchscreen. Sliding the touchscreen back up resumes use without wasting the dedicated tobacco stick, making it convenient for situations like urgent phone calls. Notably, if the pause mode is not used, the holder can be used up to three consecutive times on a single charge, depending on user patterns.

The 'touchscreen' mounted on the holder is also a standout feature. Users can check the device's preheating status, remaining usage time, and remaining usage count at a glance through the touchscreen. Additionally, the 'Flex Puff' function has been added, which considers individual usage patterns and inhalation speeds, allowing up to four additional puffs within six minutes based on personalized usage analysis.

The new product lineup includes two models: 'IQOS ILUMA i PRIME' and 'IQOS ILUMA i.' The IQOS ILUMA i PRIME is the top-tier model featuring an aluminum body with a refined wrap cover design and is available in three colors. The IQOS ILUMA i is the basic model that adds convenience to the unique IQOS design and comes in four colors. Both models apply the 'Smartcore Induction System,' which uniformly heats the tobacco from the inside, providing a consistent experience and leaving no residue after use, eliminating the need for device cleaning.

The IQOS ILUMA i series will be available nationwide starting from the 13th at official IQOS retailers, convenience stores, and the official IQOS online store. Pre-orders will begin on the 7th at nine IQOS direct stores nationwide and the official online store. The recommended retail price for the IQOS ILUMA i PRIME is 129,000 KRW, and for the IQOS ILUMA i, it is 89,000 KRW.

With the launch of the new product, market attention is focused on whether Korea Philip Morris can regain leadership and reclaim the top spot in the heated tobacco market. Since launching IQOS in 2017, Korea Philip Morris maintained the leading position in the domestic electronic cigarette market for about five years. However, in the first quarter of 2022, KT&G, with products like 'Lil Solid 2.0,' overtook the top market share, and Philip Morris has remained in second place since then.

According to industry sources, as of the third quarter of last year, KT&G's domestic heated tobacco market share was about 46%, while Korea Philip Morris's share was estimated at around 45%. The gap between first and second place is a close race within about 1%. In fact, Philip Morris's domestic heated tobacco market share has been rising again recently. According to data released by Philip Morris International (PMI), as of the third quarter of last year, Philip Morris's share of heated tobacco sticks (HTU) in the domestic market was 8.0%, up 1.0 percentage point from 7.0% in the same period the previous year.

Korea Philip Morris has been aggressively launching new products in recent years to reclaim the top spot. After losing the lead, the company launched the new 'IQOS ILUMA' in October 2022 after three years, initiating a counterattack. In 2023, it focused on expanding device distribution with products like 'IQOS ILUMA One,' and last year, it significantly expanded its portfolio of dedicated sticks called 'TEREA' to a total of 18 variants.

Korea Philip Morris states that it prioritizes leading the growth of the electronic cigarette market over immediate market share competition. While the traditional cigarette market is shrinking domestically, the electronic cigarette market continues to grow, making it more important to expand the overall market size. On this day, Yoon Hee-kyung, CEO of Korea Philip Morris, said, "From a business perspective, the company's market share is important," but emphasized, "Strategically, the growth of the non-combustible product market is our top priority." She added, "One in five adult smokers uses non-combustible alternative products, which means four out of five smokers still smoke conventional cigarettes," highlighting the significant growth potential of the market.

According to the Ministry of Economy and Finance, domestic sales of heated tobacco products reached 610 million packs in 2023, a 12.6% increase from the previous year. In contrast, sales of conventional cigarettes decreased by 2.8% to 3 billion packs during the same period. Market research firm Euromonitor also forecasts continuous market growth. The retail market size for heated tobacco products in Korea was 3.5546 trillion KRW in 2023, up 9.9% from the previous year, and the market size is estimated to reach about 4 trillion KRW last year.

Korea Philip Morris clearly expressed its commitment to leading the growth of the non-combustible product market under the slogan 'A Smoke-Free Future.' Basilis Gazealis, Head of PMI East Asia, Australia, and Global Duty-Free Business, stated, "Philip Morris plans to transform its business structure to focus on non-combustible products such as heated tobacco by 2030," adding, "We aim to generate more than two-thirds of total product sales from non-combustible products." He also noted that as of the third quarter of last year, non-combustible products accounted for 38% of PMI's total net sales.

CEO Yoon also said, "Philip Morris's non-combustible products, including IQOS, are chosen by more than 36 million adult smokers in 92 countries worldwide, including Korea, helping them move away from conventional cigarettes," and added, "PMI focuses 99% of its research and development (R&D) expenditure on non-combustible products, and we will continue to strive for innovative product development, scientific validation, and commercialization."

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