Tobacco industry in the Middle East and Africa is growing in both cigarettes and alternative tobacco products, with Egypt, Saudi Arabia and South Africa to offer the largest opportunity. Cigarettes are demonstrating moderate growth depending on smoking tradition in the country and import processes. E-vapour products and heated tobacco are growing fast from smaller base, and their future in the region depends on further regulations and innovative products yet to be offered by manufacturers.
This report comes in PPT.
Given strong smoking tradition in many countries in the region, combined with the expected fast population growth, the tobacco industry in the Middle East and Africa has not reached its potential yet. Some markets have high smoking prevalence and traditional lifestyles, allowing enough space for cigarettes. In other markets, higher purchasing power and health awareness make them more attractive for manufacturers of e-vapour products and heated tobacco.
Despite high demand for tobacco products, in some markets consumers struggle financially due to historically low purchasing power or ongoing inflation. That pushes them to opt for cheaper brands, or smoke less, or stick to cigarettes without trying high-in-price alternatives. In addition, geopolitical turbulence causes disruption in tobacco imports to the region, which is impacting volumes and creates a shift to the brands that have stock.
Illicit trade poses a threat to tobacco products distributed legally. This is especially visible within the e-vapour products space. In many markets, illicit products have a different brand landscape, channel distribution, nicotine strength and flavours. Most markets in the Middle East and Africa are still in the process of issuing further regulations to combat illicit trade.
E-vapour products and heated tobacco are benefitting from novelty, and more variety is yet to be introduced. While closed system vapes manufacturers are winning consumers by enhancing convenience, open system vapes are offering indulgence with more flavours. Heated tobacco is rapidly taking a large share of smokers in the region, however, even more consumers might get into this category once more companies join this space along with Philip Morris.
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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