South Korea Heated Tobacco Products Market Overview, 2030

Philip Morris International (PMI) launched its heated tobacco product, IQOS, in South Korea in June 2017, following its success in Japan. The company strategically entered the market by opening two flagship stores in Seoul and partnering with CU, Korea's largest convenience store chain, to distribute IQOS and its accompanying HEETS tobacco sticks. PMI offered incentives like 20% device discounts and extended warranties to customers who registered on their website, while marketing IQOS as a harm reduction product that reduces harmful substances by approximately 90% compared to conventional cigarettes. This aggressive market entry by PMI poses a challenge to South Korea's robust tobacco control efforts, which include a 2015 tobacco tax increase and the 2016 introduction of pictorial health warnings, contributing to a significant decline in adult male smoking prevalence from 66.3% in 2001 to 40.7% in 2016. Despite existing policies and programs aimed at helping smokers quit, the tobacco industry, through harm reduction strategies, endeavors to retain customers by promoting alternative products like heated tobacco. Heated Tobacco Products produce minimal odor, which users appreciate in social settings, public places, and at home. In a socially sensitive and clean-conscious culture like South Korea, this is a significant motivator for regular use. The sleek design, digital interfaces, and brand ecosystem of devices like KT&G's Lil, IQOS, and glo appeal to younger adult consumers who are drawn to tech-forward, lifestyle-enhancing products. Many users cite smoother throat sensation and less coughing compared to cigarettes.

According to the research report ""South Korea Heated Tobacco Products Market Overview, 2030,"" published by Bonafide Research, the South Korea Heated Tobacco Products market is expected to reach a market size of more than USD 11.59 Billion by 2030.South Korea’s tobacco regulatory framework is among the most structured in Asia, with Heated Tobacco Products regulated under the Tobacco Business Act and the Health Promotion Law alongside traditional combustible cigarettes Authorities permit their sale within the same regulatory category as cigarettes, mandating health warnings, excise taxation, and sales restrictions by age, while distinguishing them from e-cigarettes, which fall under pharmaceutical laws due to nicotine liquid content. In a major regulatory development, the government plans to enforce the Tobacco Harm Management Act by November 2025, which will require manufacturers to disclose detailed information on harmful ingredients and emissions for all tobacco products, including Heated Tobacco Products. Unlike many Western countries, South Korea continues to allow a wide variety of flavored Heated Tobacco Products, such as menthol, mint, berry, and citrus, providing consumers with a broad spectrum of options. Heated Tobacco Products currently benefit from a slightly lower tax burden compared to traditional cigarettes, sparking ongoing debate among public health advocates and lawmakers who seek tax parity. Despite calls for change, the Ministry of Economy and Finance has maintained the existing tax differential to preserve revenue streams. In terms of market behavior, combustible cigarette sales have steadily declined in recent years, while the sales volume of Heated Tobacco Products has grown significantly, particularly in urban centers. Retail channels, including convenience stores, supermarkets, and specialty outlets, now routinely stock both devices and consumable sticks. Heated Tobacco Product manufacturers continue to compete through rapid device innovation, consumer-focused flavor expansion, and premium user experience strategies.

In South Korea, the Heated Tobacco Products market is primarily structured around four key product types, each contributing uniquely to user behavior and industry competition. Tobacco sticks form the backbone of the category, as they are the primary consumable used in all major heated devices. These compressed and reconstituted tobacco units are sold in packs and come in a wide range of flavors such as menthol, citrus, berry, and roasted blends. The popularity of tobacco sticks is closely tied to their convenience, variety, and consistent nicotine delivery, making them the most frequently purchased item by users. Leaf tobacco, in its raw or semi-processed form, is far less common in South Korea’s retail ecosystem but is used in proprietary formats by local manufacturers such as KT&G. Some brands use shredded or ground tobacco rather than reconstituted sheets, marketing them as delivering a more authentic or traditional smoking sensation. Capsules and cartridges used in hybrid or dual-use heated tobacco systems are not as widespread in South Korea, partly due to the dominance of stick-based ecosystems. But, limited products do exist that incorporate flavor capsules embedded in the stick or in the filter, allowing users to activate a burst of flavor during the session, which is particularly popular among young adult users. Heated Tobacco Devices themselves represent the highest-margin product and continue to evolve with rapid innovation cycles. Devices like KT&G’s Lil and Philip Morris International’s IQOS now feature induction heating, smart temperature control, and faster charging, appealing to tech-savvy consumers. These devices are sold through both retail and online channels with significant brand loyalty.

In South Korea, distribution of Heated Tobacco Products is deeply embedded in the country’s modern retail infrastructure, with a strong emphasis on offline availability and emerging traction in digital sales. The offline segment dominates the market, primarily through an expansive network of convenience stores, which serve as the principal access point for both devices and tobacco sticks. Major chains like GS25, CU, and 7-Eleven offer a wide range of Heated Tobacco Product brands and flavors, contributing to their widespread adoption. These outlets cater to all age groups of legal smoking age, including young professionals and elderly users, offering convenience, immediacy, and brand visibility. Tobacco specialty shops and department store kiosks also play a key role, especially for premium device sales and customer onboarding. These outlets often provide in-person demonstrations, guided product trials, and loyalty programs, which have proven effective in promoting brand ecosystems like IQOS and Lil. Duty free shops at airports further support sales, particularly for international travelers and returning consumers who stock up on tax-free sticks and devices. The online distribution channel, while smaller in volume due to strict regulatory controls, is gaining traction through manufacturer-operated websites and registered delivery platforms. These services often require age verification and member registration, offering added privacy and subscription models for tobacco stick refills. In 2024, companies began experimenting with AI-enabled customer support, virtual consultations, and smartphone integration, enhancing the digital buying experience. Show more