Russian Cigarette Market Research

CIGARETTE MARKET 2008

RUSSIA

ALLIANCE MAJOR

SOUTH FEDERAL DISTRICT

research by

ALLIANCE ALLIANCE MAJORMAJOR

ALLIANCE MAJORMARKET RESEARCH COMPANY

SINCE 1994ROSTOV-ON-DON

SOUTH FD of RUSSIA

[email protected]


GENERAL MARKET

PERFORMANCERUSSIA


CONSUMER BASE*

MALE

FEMALE31%31%

6565%%MALE & FEMALE

46%46%

* data of Rospotrebnadzor, early 2008


early start of consumption*

80% of men and 50% of women

started to smoke before they were 18

* data of Rospotrebnadzor, early 2008


RUSSIAN CIGARETTE MARKET

MATURE growing in value faster than in

volume

SATURATED showing distinct overproduction


KEY MARKET TRENDS

2008


SLOW-DOWN of INCOME GROWTHdriven by global financial crisis

- slower uptrade (young consumers) or even downtrade (elder consumers)

- reducing consumption frequency/volume


WHO FCTC accessioned by Russia in 2008

- heavier control over advertising and sales

- higher excises

- training of anti-smoking public opinion


HEALTH & WELLNESS getting increasingly popular in Russia

- increasingly high popularity of super light offerings

especially among young female consumers

- amplified impact of anti-tobacco social programs

- alleviating of smoking takeup influence factors such as peer pressure, parental smoking and advertising


HOWEVER, IMPORTANT PSYCHOLOGICAL ASPECTS of

SMOKING- anti-stress

- indulging

make it a lasting habit hard to quit


CONSUMER PREFERENCES

in South Federal Districtof Russia


THE REVIEW IS BASED ON

PURCHASE REGISTER*

wave 1held in MARCH 2008

covered CONVENIENCE RETAIL(kiosks, independent stores, etc)

wave 2held in AUGUST 2008

covered RETAIL CHAINS(supermarkets)

* representative sample; details on sample size, geography and register methodology available on request


male59% female

41%

GENDER / AGE*

0%

20%

40%

60%

80%

100%16

-20

21-2

5

26-3

0

31-3

5

36-4

0

41-4

5

46-5

0

51-5

5

56-6

0

61-6

5

66-7

0

71-7

5

over

75

age groups

male female

* total sample wave 1; deviations in wave 2 insignificant


AGE GROUPS*


0% 3% 6% 9% 12% 15%

over 75

71-75

66-70

61-65

56-60

51-55

46-50

41-45

36-40

31-35

26-30

21-25

16-20

age

grou

ps


CIGARETTE TYPES*


0%

20%

40%

60%

80%

100%16

-20

21-2

5

26-3

0

31-3

5

36-4

0

41-4

5

46-5

0

51-5

5

56-6

0

61-6

5

66-7

0

71-7

5

over

75

age groups

super lights lights full flavor

lights26%

super lights46%

full flavor28%


CIGARETTE TYPES*

* wave 1; deviations in wave 2 insignificant

male smokers

full flavor33%

super lights38%

lights29%

female smokers

lights22%

super lights56%

full flavor22%


PRICE CATEGORIES

convenience retail

above premium

22%

value19%

medium32%

low filter5%

non filter2%

premium20%

supermarket chains

value10%

above premium

33%

premium20%

non filter0,4%

low filter2%

medium35%


PRICE CATEGORIES*

0% 20% 40% 60% 80% 100%

16-20

21-25

26-30

31-35

36-40

41-45

46-50

51-55

56-60

61-65

66-70

71-75

over 75

age

grou

ps

non filter low filtervalue mediumpremium above premium

* total sample wave 1; deviations in wave 2 mainly relate to

value and super premium segments however general trend is the same


KEY OPERATORS*

KT&G1%

IT/ Reemtsma3%

Donskoj Tabak5%

BAT28%

Gallaher/ JTI12%

JTI28%

Philip Morris31%

* total sample wave 2; deviations in wave 1 relate to larger shares of Gallaher and Donskoj Tabak with correspondingly smaller shares of Philip Morris, JTI and BAT


12%

8%6% 6% 6% 5% 5% 5%

3% 3% 2% 2% 2% 2% 2% 1% 1%

9%

21%

0%

5%

10%

15%

20%

25%

Win

ston

Kent

Parl

iam

ent

Mar

lbor

oVo

gue

Ches

terfi

eld

Virg

inia

Pall

Mal

lBo

ndAl

lianc

eGl

amou

rDo

nsko

j Tab

akM

urat

ti LD LMZo

lota

ja J

ava

21 V

ekRu

sski

j Stil

othe

r (17

bra

nds)

KEY BRANDS*

* total sample wave 2; deviations in wave 1 relate to smaller shares of above premium, premium and some medium brands (mainly Winston) with respectively larger shares of value, low filter and most of medium brands


CHANGE OF CONSUMPTION PATTERN

earlier smoking startup;even gender distribution of

young consumer base (under 30) while in senior age groups male smokers increasingly dominate;

higher popularity of super light and light cigarettes of above premium, premium and medium price categories among young consumers (under 40).


please contact ALLIANCE MAJOR

[email protected]

www.allianc.ru

CREDITSall wonderful pictures are taken from

Flickr.com great thanks to the artists and their

models

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