The Indian cigar and cigarillos market has witnessed significant growth over the past few years owing to increasing disposable income and changing consumer lifestyles. Cigars and cigarillos are premium tobacco products that are considered a status symbol and are frequently gifted. Rising affluence has enabled people to indulge in such luxurious tobacco products. India currently represents a small share of the global market but offers huge untapped potential. Brands are introducing different flavors and variants to appeal to the evolving taste preferences of young consumers.
The Global India cigar and cigarillos Market is estimated to be valued at USD 3.0 Mn in 2024 and USD 4.2 Mn by 2031 is expected to exhibit a CAGR of 4.9% over the forecast period 2024-2031.
Key Takeaways
Key players operating in the India Cigar and Cigarillos market are Godfrey Phillips, Karnataka Tobacco, Imperial Brands, British American Tobacco, and ITC Limited. Godfrey Phillips leads with a market share of over 20% due to its strong distribution network and popular Pan Bahar brand.
The growing trend of social smoking, especially among youth, provides an opportunity for cigar marketers to promote exclusive events, pubs and lounges where cigars are smoked. Increasing exposure through social media influencers can also help influence consumption choices.
Major India Cigar and Cigarillos Market Growth companies are eyeing opportunities in international markets by exporting Indian variants. Godfrey Phillips, Karnataka Tobacco and Imperial Brands have expanded their distribution networks across Southeast Asia, Middle East and Africa regions. They have also customized packaging and branding to suit local preferences.
Market Drivers
Rising disposable incomes: India is one of the fastest growing major economies globally with a strong GDP growth rate of over 7% annually. This has boosted discretionary spending on luxury goods including premium cigars and cigarillos.
Social status symbol: Cigars are seen as an accessory that enhances one's social standing and purchasing them has become a way for new affluent Indians to flaunt their wealth and lifestyle. Significant demand comes from business owners, professionals and social events.
Market Restraints
High taxes: The Indian government levies heavy taxes, duties and cesses on tobacco products to discourage consumption and generate tax revenues. High taxes increase the retail cost of cigars making them unaffordable for most consumers.
Strict regulations: The production, packaging, advertisement and sale of cigars are strictly regulated in India. Pictorial health warnings covering 85% of the package discourage trial among new users. Regulations could be a barrier for marketers.
Segment Analysis
The India Cigar And Cigarillos Market Size and Trends is dominated by flavored segments such as fruit and spice infused. Flavored cigars account for more than 60% of the total market share as consumers prefer options that mask the natural tobacco taste with additional flavors. They are particularly popular among new and occasional smokers. Regular cigars account for a modest 30% share. These are preferred by loyal and veteran smokers for their authentic tobacco taste. Cigarillos, known for their smaller size, hold the remaining 10% share. They are a suitable option for on-the-go consumption. The flavored segment is expected to maintain its dominance during the forecast period given the rising experimentation with different flavors among Indian consumers.
Global Analysis
Regionally, Western India holds the leading position with a share of over 35% followed by Southern India at 25%. The presence of key manufacturers and suppliers along with higher disposable incomes have boosted market growth in these regions. Eastern India is identified as the fastest growing region expanding at a CAGR of 6% owing to rising trial rates, especially in tier-II cities.
North India currently accounts for 20% share but is expected to witness the maximum growth spurts, growing at 5.5% CAGR during the forecast timeline attributable to increasing affordability and social acceptance in urban pockets. Globally, India stands among the top five cigar markets and offers lucrative prospects for investment and expansion for market players given the persisting moderate consumption despite regulations. Sustained demand especially for flavored options across regions makes India an attractive emerging market.
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About Author:
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)
