2Firsts Interview with CTIHK: Unveiling the Secret Behind the Significant Enhancement of Competitiveness

Special Report: 
CTIHK's global competitiveness further enhanced

2Firsts interview with CTIHK, exploring current development and competitive strategy
 

Article/ 2Firsts

From September 19th to 21st, InterTabac, one of the world's largest tobacco exhibitions, officially opened. China Tobacco International (HK) Limited (referred to as "CTIHK"), the only listed company in the Chinese tobacco system focusing on tobacco as its main business, as well as the exclusive export platform for China's new tobacco business, organized a team of 66 people from 13 industrial companies within the Chinese tobacco system to exhibit at the event. They brought 25 brands, over 100 varieties of heated tobacco products, and 30 types of cigars. This exhibition marked the largest number of exhibitors and products showcased by Chinese tobacco companies at an overseas exhibition. CTIHK also participated in exclusive interviews at the exhibition, discussing their innovations in products, market strategies, and international development.

On the morning of September 19, 2Firsts visited the CTIHK booth, where staff members were busy and nervous as they introduced products to attending customers from different countries and shared meticulously crafted detailed product brochures. After a brief wait, a representative from CTIHK finally found the time to explain, "The volume of customers today has exceeded our expectations." He then quickly shifted to the main topic and began accepting interviews.

International market share has significantly increased, and competitiveness has been systematically upgraded

A representative from CTIHK told 2Firsts that in recent years, Chinese heated tobacco products have maintained a strong growth momentum in overseas markets, gaining market share and brand influence in some markets. In the Czech market, the COO brand of CNTC has ranked fourth among international brands; in the Philippines market, the COO brand is able to compete with international brands and has significantly increased market share; in other key markets, CTIHK's leading products have formed a clear market hierarchy and sales volume is steadily increasing.

The increase in international market influence comes from the systematic upgrading of competitiveness. A representative from CTIHK revealed to 2Firsts the upgrade of their competitive strategy. In terms of product strategy, they have completely upgraded their products and launched a new generation of tobacco products represented by natural smoke and air heating technologies independently developed by CNTC, and have used innovative product combinations to meet the needs of different markets. In terms of marketing strategy, CTIHK has accurately divided key regional markets based on the global competitive landscape, and has strengthened their business layout in these key regional markets through continuous optimization of market promotion strategies and customer expansion models. In addition, in terms of system construction, CTIHK fully leverages its unique positioning advantages within the CNTC system to continuously enhance its business leadership function in market expansion, further improve the unified external image of CNTC, and continually increase the efficiency and effectiveness of market promotion.

The regulatory policy for the EU market introduces "non-combustible heated tobacco products"

"Since the EU's TPD policy came out, the barrier to entry into the EU market has become higher," explained a representative from CTIHK to 2Firsts. "With the adjustment of market supervision policies, consumer demand has also started to diversify. Some consumers have shown increased demand for non-smoking medium products, so we have developed this ENIF tea-based product specifically for the EU market." The product referred to by the CTIHK representative as "tea-based" is officially called "non-smoking medium heat products (without tobacco ingredients)." Unlike traditional heat-not-burn tobacco products that use tobacco leaves as raw materials, the "tea-based" product is filled with tea leaves as a base and coated with nicotine substances, achieving the retention of nicotine effects while eliminating the use of tobacco leaves as raw materials.

In some EU countries, regulations for products that do not contain tobacco differ from those for traditional products in terms of regulatory policies and tax systems. This satisfies consumers' demand for nicotine intake through reduced harm products. It is common practice for international tobacco companies to introduce localized products tailored to different market regulatory policies. The launch of "tea-based" products by CTIHK at the Dortmund exhibition marks the beginning of a new stage in the customized and localized development of its international market.

According to 2Firsts, non-tobacco heated cigarette products represented by "tea-based" originated from Chinese companies, these pods are collectively referred to as "herbal pods", typically using herbal substances such as "tea leaves" and "lotus leaves" as a base.

Future plans: focus on developing heated tobacco and cigar products to create a complete tobacco industry chain

"Heated tobacco and cigar tobacco are currently the key product lines that CTIHK is focusing on expanding, in addition to traditional cigarettes. The company plans to develop CTIHK into a world-class tobacco enterprise with a complete industry chain in the future." Staff from CTIHK expressed the company's future plans and vision to 2Firsts.

In the tobacco heating sector, CTIHK not only serves as the overseas general agent for Chinese tobacco, actively developing key markets, but also plans to expand market coverage to meet the needs of global consumers.

In terms of cigar direction, the expansion strategy of CTIHK is also clear. In addition to continuously expanding in the duty-free business, the company also plans to strengthen the global promotion of Chinese cigars for the international consumer group. Currently, CTIHK has established a flagship store for the Great Wall Cigar brand in Hong Kong, and plans to further promote the cigar business in other overseas markets, exploring the possibility of more project collaborations.

Currently, CTIHK plans to further expand its presence in overseas markets in order to cover a wider range of business activities and accelerate the construction of a leading international full-service enterprise.