Tobacco Asia

Volume 19, Number 3

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Page 24 of 75

tobaccoasia 25 a total of 1.48 billion slim cigarettes, accounting for 9.5% of total output that the year. By the end of December 2014, there were 20 slim cigarette brands, including six approved after July 16, 2014. CTJI, CTHI, as well as China Tobacco Anhui Industrial (CTAI) and China Tobacco Industry Development Center (CTIDC) each own 2 brands, and the other 12 manufacturers own 1 each. By the end of December 2014, of the 20 slim cigarette brands CTJI's Nanjing was the largest, with sales volume reach- ing 138,300 cases, or a 49.5% market share, followed by CTHI's Yellow Crane Tower with 78,100 cases, or 27.9%, and CTSI's Mount Tai with 28,400 cases, or 10.2%. The aggregate sales vol- ume of the other brands reached 34,700 cases that year, which corresponds to 12.4% of the market. Of the 40 specifications of slim brands that existed by the end of December 2014, there were 7 with annual sales volumes in excess of 10,000 cases each – the Yellow Crane Tower (Famous Tower Under the Heaven) with 71,200 cases, Nanjing (Xuanhe Gate) with 67,600 cases, Nanjing (Twelve Beauties Flue-Cured) with 45,200 cases, Mount Tai (Xinyue) with 24,000 cases, Nanjing (12 Beauties Mint) with 13,700 cases, Nanjing (River Stones) with 10,400 cases, and The Red Golden Dragon (Hard Blue Aini) with 10,200 cases. The aggregate sales volume of the aforesaid 7 specifications reached 242,300 cases in 2014, accounting for 86.7% of the total segment's sales that year. In 2014, slim cigarettes were on sale in 33 provincial-level regions across China, with the sales volume varying rather sig- nificantly from one region to another. Geographically, the slim market can be classified into four categories. The first category comprises Shandong Province and northeast China. Sales volume in Shandong reached 65,800 cases in 2014, accounting for 21.9% of the national total, while the sales volume in Liaoning, Jilin, and Heilongjiang Provinces as well as Dalian City in northeast China reached 105,100 cases that year, which corresponds to 35% share. The second cate- gory comprises the Inner Mongolia region, Shanxi, Hebei, and Shaanxi Provinces, the city of Beijing, and other regions in north China, with the sales volume there reaching 53,800 cases in 2014, or 17.9% share. The third category comprises Jiangsu and Sich- uan Provinces in southwest China, Hubei and Henan Provinces in central China, and other regions, which are considered both slim cigarette production and marketing areas, with the sales vol- umes there reaching 34,200 cases in 2014, corresponding to an 11.4% share. Finally, the fourth category comprises the other 19 province-level regions other than the aforementioned 14, with the sales volume reaching 41,400 cases or 13.8% share. Despite a slowdown of economic growth in China that has resulted in near-saturation of cigarette sales in the country, slim cigarette production and marketing – as a new point of growth for the tobacco industry – face a rare period of opportunities for development. Slim cigarettes were originally designed for female smokers, but the traditional definition has been fundamentally changed. They are now considered fashionable, novel, graceful, pioneer- ing, and individualized, and are gradually being accepted by all consumers. Along with steady increases in the segment, there is growing market demand for supply, giving rise to greater room for further market development.

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