Cigarette Market Research 2008

RUSSIA SOUTH FEDERAL DISTRICT

CIGARETTE MARKET 2008

research by

ALLIANCE MAJOR

ALLIANCE MAJOR MARKET RESEARCH COMPANY

SINCE 1994 ROSTOV-ON-DON

SOUTH FD of RUSSIA www.allianc.ru [email protected]

ALLIANCE MAJOR

GENERAL

MARKET PERFORMANCE RUSSIA

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CONSUMER BASE*

46% MALE & FEMALE

65% MALE

31% FEMALE

* data of Rospotrebnadzor, early 2008

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early start of consumption*

80% of men and 50% of women started to smoke before they were 18

* data of Rospotrebnadzor, early 2008

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RUSSIAN CIGARETTE MARKET

MATURE growing in VALUE faster than in VOLUME

SATURATED showing distinct OVERPRODUCTION

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KEY

MARKET TRENDS 2008

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SLOW-DOWN of INCOME GROWTH driven by global financial crisis

- slower uptrade

(young

consumers) or even

downtrade

(elder

consumers)

- reducing consumption frequency/volume ALLIANCE MAJOR

WHO FCTC accessioned by Russia in 2008

- heavier control over advertising and sales - higher excises - training of antismoking public opinion ALLIANCE MAJOR

HEALTH & WELLNESS

getting increasingly popular in Russia

- increasingly high popularity of super light offerings especially among young female consumers

- amplified impact of antitobacco social programs - alleviating of smoking takeup influence factors

such as peer pressure, parental smoking and advertising ALLIANCE MAJOR

HOWEVER, IMPORTANT

PSYCHOLOGICAL ASPECTS of SMOKING - anti-stress - indulging

make it a lasting habit hard to quit ALLIANCE MAJOR

CONSUMER PREFERENCES in South Federal District of Russia

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THE REVIEW IS BASED ON

PURCHASE REGISTER* wave 1 held in

MARCH 2008

covered CONVENIENCE RETAIL (kiosks, independent stores, etc)

wave 2 held in

AUGUST 2008

covered RETAIL CHAINS (supermarkets)

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

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GENDER / AGE* male 59%

female 41%

male

female

100% 80% 60% 40% 20%

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

0%

age groups

* total sample wave 1; deviations in wave 2 insignificant

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AGE GROUPS* 16-20 21-25 26-30 31-35

age groups

36-40 41-45 46-50 51-55 56-60 61-65 66-70 71-75 over 75 0%

3%

* total sample wave 1; deviations in wave 2 insignificant

6%

9%

12%

15%

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CIGARETTE TYPES* super lights 46%

full flavor 28% lights 26%

super lights

lights

full flavor

100% 80% 60% 40% 20%

* total sample wave 1; deviations in wave 2 insignificant

71-75

66-70

61-65

over 75

age groups

56-60

51-55

46-50

41-45

36-40

31-35

26-30

21-25

16-20

0%

ALLIANCE MAJOR

CIGARETTE TYPES* super lights 38%

full flavor 33% lights 29%

male smokers

full flavor 22%

super lights 56% lights 22%

female smokers

* wave 1; deviations in wave 2 insignificant

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PRICE CATEGORIES premium 20%

medium 32% value 19%

above premium 22%

non filter 2%

premium 20%

above premium 33%

supermarket chains

low filter 5%

convenience retail

medium 35%

non filter 0,4%

value 10% low filter 2%

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PRICE CATEGORIES* over 75 71-75 66-70 61-65

age groups

56-60 51-55 46-50 41-45 36-40 31-35 26-30 21-25 16-20 0%

* total sample wave 1; deviations in wave 2 mainly relate to value and super premium segments however general trend is the same

20%

40%

non filter value premium

60%

80%

low filter medium above premium

100%

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KEY OPERATORS* Gallaher/ J TI 12% J TI 28%

BAT 28%

Philip Morris 31%

KT&G 1%

Donskoj Tabak 5% IT/ Reemtsma 3%

* 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

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KEY BRANDS*

25%

21% 20%

15%

12% 10%

9%

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

5%

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

other (17 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

Russkij Stil

21 Vek

Zolotaja J ava

LM

LD

Muratti

Donskoj Tabak

Glamour

Alliance

Bond

Pall Mall

Virginia

Chesterfield

Vogue

Marlboro

Parliament

Kent

Winston

0%

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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). ALLIANCE MAJOR

FOR MORE DETAILS ON THIS RESEARCH PROJECT

please contact

ALLIANCE MAJOR at

[email protected] www.allianc.ru

CREDITS all wonderful pictures are taken from Flickr.com great thanks to the artists and their models

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