An ITC spokesperson, too, said the company was relying on innovative products across different price points to maintain its market dominance.
In the recent past, ITC has introduced differentiated cigarettes like Gold Flake Indie Mint, Gold Flake Neo and Classic Rich & Smooth in the premium end. It also came up with flavoured cigarettes for the Flake brand in the mid-tier segment, and introduced Wave, another exclusive flavoured cigarette.
Godfrey, too, introduced flavoured variants like Four Square Clove Crush in the mid-tier segment and has seven variants of the Marlboro brand for India.
Distributors said while earlier these companies
were more focussed on regular and light variants, the same has now shifted to furthering innovation after it was noticed that differentiated brands were doing well. Imported brands — such as Gudang Garam from Indonesia, which offers clove flavoured cigarettes, and black toned Baba Khalif — have been becoming popular.
Trade sources say that while habitual smokers have been loyal to their brands, which are mostly not flavoured, new smokers are more prone to using flavoured cigarettes — a new section of buyers the companies
are eager to acquire.
Driven by new launches, Godfrey, in the recent past, has gained 13.1 per cent in terms of volume growth. Although, the market share gain was only 1 per cent. “The gain (in sales volume and market share) is more by our new launches that have gained from rivals,” Wadhera said.
Interestingly, while budget cigarettes are priced Rs 45-60 for a pack of 10, illicit cigarettes are also sold at a near similar price range. “High rates of tax on cigarettes provide attractive arbitrage opportunities for illicit trade, allowing sale of these cigarettes to consumers at prices much lower than those of duty-paid domestic cigarettes. The sharp increase in taxes on cigarettes announced in the Budget 2020 will exacerbate the situation,” the ITC spokesperson said.
Industry officials said besides innovation, cigarette companies
were focussing on increasing their market reach by collaborating with local law enforcement authorities to curb illicit cigarette trade.