Korea’s top cigarette maker, KT&G, continues to be the leading player in the native market over global companies
In 2012, KT&G kept 62% of the market share.
Even after the government started out the tobacco industry in 1988, the company never lost its position to worldwide rivals such as Phillip Morris International, British American Tobacco and Japan Tobacco International.
KT&G refers its competitiveness to its high quality products and growth in abroad sales.
“The company is very glad that it has performed so well and never lost position to the international rivals,” KT&G said.
As outlined by KT&G, preserving such a stronghold is exceptional when a Korea’s cigarette market is confronted with free and open rivalry.
For example, when Spanish firm Altadis worked with Imperial Tobacco Group in 2007, its market share decreased by 20%. In Turkey, its state-run company Tekel was purchased by British American Tobacco in 2008 and its shares slipped by 30%.
KT&G addresses to maintenance of the quality of its products, such as its flagship brands: This, Time, Esse, Season and Raison.
Every stage of the production process is supervised and the product is properly reviewed twice before it is proved for sales. Quality-control managers are demanded to print their names on each pack of cigarettes to assure its quality.
The firm also presents new inventive products. One of them is Raison Cafe, a new hazelnut coffee-flavored cigarette in the Raison range.
KT&G as well focused international consumers to increase its sales, which jumped to $634 million in 2012, up 1,713% from $37,000 in 2000. Of its brands sold abroad, Esse led the world’s super-slim market with sales of over 50 billion cigarettes globally in 2012 alone.
The former state-run firm, which controled tobacco and ginseng, extended its business to real estate, food and beverages, biomedical technology and pharmaceutical products since it was privatized in 2002.
Its sales then increased from 2.03 trillion won in 2002 to 3.98 trillion won in 2012, while its net revenue more than increased twofold from 586 billion won to 1.03 trillion won over the same period.
KT&G was mentioned on the Dow Jones Sustainability Indexes (DJSI) for the third consecutive year in 2012, a family of indexes measuring the sustainability of the biggest 2,500 companies listed on the Dow Jones Global Total Stock Market Index.