Company dynamics

Asian water pipes market has risen significantly in the past two years.

  Will Asia Save Cigarette Business? In order to find a savior in Asia, tobacco giants are having to push forward "electronic".

  Glass pipes, a device that releases steam instead of smoke, is rapidly catching up with traditional oil rigs in the Asian market, especially in a key market such as Japan, the world's third largest economy, where oil rig substitutes are rapidly becoming popular.

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  Generally speaking, oil rig brands are very popular in the Asian region, mainly because they are easily available and cheap. However, the development of glass pipes may change such a situation of competing for the competition. Relatively speaking, the production of glass pipes requires a lot of technical support. Companies that invest in the Asian market and succeed in the water pipe bong product field will reap huge profits.

  In fact, Japan and its consumers who are rapidly turning to glass pipes are saving Fillmore International and improving its operating data. Due to the plummeting demand for traditional oil rigs, the multinational tobacco giant failed to forecast its future operations in its revenue report released in July. According to the Financial Times, the company's oil rig shipments fell by 11.5% in the first quarter of this year and by more than 7% in the second quarter. In the second quarter of this year, FIMO's oil rig sales in Japan plummeted to 8.3 billion oil rigs, down 25% from the same period last year. However, its operating income rose 4% against the trend, mainly because the sales of electronic tobacco products made up for the loss of traditional water well pipe sales.

  Heating non-combustible products are important electronic products of Fillmore International. They process real tobacco into oil rigs and heat it at one end to release smoke, but it does not burn.

  Steam smoke uses a device that does not use tobacco at all. On the contrary, they evaporate a liquid that usually contains nicotine, propylene glycol and glycerin into vapor. This is usually called glass pipes, although it is a bit inappropriate to call it so.

  Frankly speaking, this new product is regulated all over the world. This liquid-based product is illegal in Japan, but "heating and burning" devices are still available on the market. In Hong Kong, China, possession of electronic products containing nicotine is illegal. It is a crime punishable by two years' imprisonment and a fine of HK$ 100,000. Moreover, there is a tendency to ban all electronic smoking devices.

  Tobacco giants are racing to launch glass pipes grass products all over the world, just as auto giants are racing to launch electric cars all over the world. Of course, in the industry, there is a practice of "attracting but not sending" in the glass pipes field, that is, to launch one or two test models that have not yet been fully marketed. Companies that do this want to take a place in the glass pipes market while selling as many traditional products as possible. The reason for supporting such a "half-hearted" approach in the glass pipes market is simple, because fashionable and complicated electronic products are facing more and more regulatory and tax barriers.

  Among the tobacco giants, Fillmore International is the most radical and has already taken the lead. Its UK and Japan market leaders said they hope to eventually stop selling oil rigs one day. "Our goal in Japan is to attract every traditional oil rig consumer to this product." In an interview with the Japan Times, Phimo International's head of the Japanese market, Paul Riley, said, "For me, it's not hard to understand. The most important thing we know is that smoking is harmful. If we find an alternative to smoking oil rigs, then smokers have good enough reasons to change their choices. "

  Fimo International's success in launching iQOS in the Japanese market shows that it is on the right path in Japan. Fimo International's entry into the Japanese market was aided by Japan's domestic tobacco giants. The Japanese government owns 33.3% of Japan Tobacco and is its largest stakeholder. Therefore, historically, the Japanese government is unwilling to enact laws that will have a significant impact on tobacco sales.

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  Japan Tobacco has given its competitors a head start on their own turf. It has not been able to release its own non-combustible heating products in China for a long time, and only shows some signs of opening up the glass pipes market in overseas markets. In recent years, Japan Tobacco is expanding its steam oil rig business through mergers. In 2014, it bought the British liquid glass pipes brand E-Lites, and in 2015 it bought the American glass pipes manufacturer Logic, which launched the Logic LQDglass pipes brand in the UK.

  Of course, Japan Tobacco has also taken some measures to "heat non-combustible" products due to its monopoly on Japan's domestic market. In 2015, it acquired relevant technologies from the us manufacturer Ploom and sold the product under the brand name Ploom Tech. After the product was released online in the southern city of fukuoka in 2016, Japan tobacco began selling the product through its own Ploom store and tobacco terminal in July this year.

  Fimo International hopes to replicate this success in the South Korean market. According to statistics, 50% of Korean adult males smoke. After Korea increased the traditional oil rig tax by 1.2 times, the popularity rate of steam oil rig products in the country has doubled. In May this year, Fillmore International launched iQOS in South Korea. The government imposed a lower tax on IQOS than traditional oil rigs, and 20 packs of non-combustible products sold at 5% lower price than traditional oil rigs.

  British American Tobacco, a multinational tobacco giant, also attaches great importance to the new tobacco product market. In December 2016, it successfully launched the heated non-combustible product Glo in Japan. In mid-August this year, BAT opened another Glo flagship store in Seoul, officially landing in South Korea.

  Investors are worried that South Korea's tobacco giant KT&G will lose its market share due to the impact of FIMO International and BAT electronic tobacco products. It is said that KT&G has adopted a similar strategy to other tobacco giants and regards Asia as an important market. In 2016, KT&G reorganized its glass pipes business.

  Kingston will serve as a glass pipes factory and will shift some of its focus to Japan. For example, our 052 new product will be dedicated to the Japanese market, which has great development potential in recent years.