KT&G: Leading the Global Tobacco Market Expansion

Korea's Pioneer Economy reported on August 5th, "We spend half the year overseas. We conduct market research for product launches and visit various countries for management after the release. This is the secret to being able to export products to 132 countries around the world.

Jin Huixiu, 50, is the head of the KT&G brand department. Having been with KT&G since 2004 and having managed brands for 20 years, she is a seasoned professional. Recently, she has been focused on expanding into international markets. Director Jin stated, "We are focused on analyzing market conditions and developing new ideas," and emphasized that "shaping the identity of each brand like Esse, Bohem, and Raison, and cultivating them into 'global mega brands' is our goal.

Representative brand is "Esse". Esse has been dominating the domestic cigarette market in South Korea for 20 years since its release on November 1, 1996. According to last year's data, the domestic HNB cigarette market share is approximately 35%. She explained, "The KT&G brand room is at the forefront of the business, responsible for developing products, ensuring market share, and overall in charge of brand development and management.

Currently, the brand department has a total of 26 employees. There are 3 teams domestically and 4 teams globally. This indicates that KT&G is focusing on developing overseas markets. She emphasized, "The Esse brand achieved sales of 496.5 billion Korean won domestically last year, while also achieving sales of 405.1 billion Korean won overseas, showing growth.

KT&G has actually launched a clove-flavored product called "Esse" in Indonesia. This product alone sold over 4.2 billion Korean won last year. Kim Soo-chang stated, "Esse is currently exported to more than 90 countries including Indonesia, Russia, and the Middle East, raising KT&G's status," and confidently added, "Especially in the ultra-slim cigarette sector, we have held the top position in global sales for the past ten years since 2014.

Recently, KT&G has been improving market accessibility through overseas factories. In 2008, they established a factory in Turkey, followed by one in Russia in 2010. In 2011, they established a production base in Indonesia through the acquisition of a local company. They are also currently constructing new factories in Indonesia and Kazakhstan. Equipment expansion is also underway in Turkey. Director Kim stated, "Operating factories locally is advantageous for distributing to neighboring countries," and added, "Tariffs, logistics, and other benefits are an added bonus.

The overseas HNB business is one of KT&G's e-cigarette, dry-type, and three core businesses proposed in its medium- to long-term vision. In fact, overseas HNB sales have been steadily increasing from 388 billion Korean won in 2021, 494 billion Korean won in 2022, to 532 billion Korean won in 2023. Kim, the CEO, stated that "KT&G's overseas HNB business is playing the role of a cash cow in terms of continuing capital expenditure (CAPEX) investment and shareholder returns," and also mentioned that "accordingly, the brand department will also spare no effort in expanding the overseas market.