Philip Morris Japan (PMJ) released a new type of heat-not-burn tobacco ” IQOS ILUMA ONE ” in March. Although this product is positioned as an entry model with a lower price than the conventional IQOS ILUMA series, the IQOS ILUMA series was just launched in August 2021. It is a form that a new product was introduced in about half a year.
This time, we talked to PMJ President Sherry Go, who oversees the Japanese business, about the importance of the Japanese market. President Go so far Philip he Morris before entering his interview, where he has worked in the Malaysian, Chinese, Hong Kong, Taiwanese and Indonesian divisions of International (PMI) and knows the Asian market. I would like to see the numerical data of IQOS. IQOS, which was released in 2014, has grown to 21.2 million users worldwide as of December 2009. 15.3 million users have switched from cigarettes to smoke-free products sold by PMI, accounting for 72%. Currently, smoke-free products are sold in 71 markets around the world, with the goal of selling in 100 markets by 2013. The number of heat-not-burn tobacco sticks shipped in Japan was 8.1 billion in the fourth quarter of 2009. Although the market share has increased to a record high of 21.8%, PMJ analyzes that this is due to the large launch of the IQOS ILUMA series. As a result of deploying IQOS ILUMA, more than 20% of IQOS users are using the IQOS ILUMA series, and 20% of IQOS ILUMA users are new acquisitions. Terrier, a tobacco stick exclusively for the IQOS ILUMA series, has already reached 8% of the market share, and Marlboro’s heat stick is still the top share (9.8%), but the share has dropped significantly. IQOS ILUMA One is 12.16 cm in size and weighs 68. With a compact size of 5 grams, it can be used 20 times continuously with one full charge (90 minutes, 135 minutes in the past). The price is set at 3980 yen by not installing the functions that have been installed in IQOS ILUMA and IQOS ILUMA Prime such as auto start and auto stop. The price has been significantly reduced compared to IQOS ILUMA (6980 yen) and IQOS ILUMA Prime (9980 yen), making it easier to buy. Approaching the position and sales strategy of IQOS ILUMA ONE. (Journalist Nobuaki Takeda, ITmedia Daiichi Konno)
Aim to release ILUMA One
–What is the aim of launching IQOS ILUMA ONE We want as many cigarette smokers as possible to switch to smoke-free products. To achieve this, it is important to offer more device choices to smokers who are deciding to switch from cigarettes. While we received a lot of good feedback from users when we launched IQOS ILUMA and IQOS ILUMA Prime, some wanted something more portable and cheaper. In response, we created a product called IQOS ILUMA One. We are always trying to understand the voice of our users. The success of the IQOS ILUMA series is based on product innovation, which is based on customer feedback. Since 2014, we have released various IQOS devices for generations, but we are trying to improve the problems from the user’s point of view, such as being unable to use continuously and having to charge many times, and cleaning is troublesome. increase. This process of improvement will continue.
Emphasis on investment convenience stores of 1 trillion yen or more
It was only half a year since the launch of IQOS ILUMA and IQOS ILUMA Prime, and it was the release of a new product. I get the impression that the sales cycle is short like fashion, but is there any possibility that it will continue in the future? We are investing US $ 9 billion (about 1,152.8 billion yen, as of April 21) globally for commercialization such as R & D and production system, and we will continue to innovate, especially. We do not determine the product release cycle. ――Looking at IQOS ILUMA One, compared to IQOS ILUMA and IQOS ILUMA Prime, the number of continuous uses has increased, the charging time has become shorter, and it has become more compact. There are many variations and variations, and the price has dropped. If you compare it to a smartphone, you will get the impression that it is a low-priced version of the iPhone. Since it is a device, I feel a certain kind of “smartphone conversion of cigarettes”. PMI aims to realize a smoke-free society, but I believe that the current portfolio alone is not enough. Because one product cannot satisfy all users. In Japan, we will develop the IQOS ILUMA series in the heat-not-burn tobacco category, but there are other platforms in other countries and regions. And I would like to present to cigarette smokers, “There is such a better product.” We need to keep launching new technologies, brands and price points, and that’s our strategy. I’m not a tech expert, but I may be able to do things I couldn’t do before in the future. In order to continue to innovate, it is important to form partnerships with other companies and find the right innovation.
Factors that helped increase sales of IQOS ILUMA
――What do you think was the reason for the increase in sales of IQOS ILUMA ? There was a problem that cleaning was not required to improve usability and the blade was damaged, but we believe that the device improvement was successful, such as eliminating it. In addition, the taste has been further improved and the odor has been suppressed compared to the previous IQOS series. As a result, more than 20% of people are already switching from existing IQOS devices to new IQOS ILUMA, and more than 20% of all IQOS ILUMA users are new users.
How do you perceive the characteristics of the Japanese market? I think that another convenience store is an important sales place in Japan. From the perspective of a foreigner, I think the Japanese convenience store market is unique. It’s everywhere, and it’s a shop that appeals for convenience by saying “convenience = convenience”, but Japanese people are accustomed to enjoying that convenience. It is natural that you can buy what you need at any time, morning, day and night. That is why we attach great importance to the existence of convenience stores. For example, we need to ensure that our products are not out of stock, and we must not let consumers worry about shortages or sold out.
Promote benefits to convenience stores
There is a cigarette shelf behind the cash register at the convenience store. I think a good place to sell is to compete with rivals. How do you get a good row of shelves? I think each tobacco company has its own strategy, but of course there is fierce competition to get a good place. We tell the convenience stores “when and what kind of products will be released? What kind of display will we use?” And work closely with them. This is because even if we sell a new product, if it is not communicated to consumers, we and the convenience store will be in trouble. In addition, the convenience store side also has its own strategy, and there are opinions that “Isn’t it better to do this?” It’s a feeling of listening to such things and doing collaborative work. Furthermore, it is important for convenience stores to talk concretely, such as “We can increase sales by this amount.” Unlike cigarettes, you can sell the device itself called IQOS, which is a new source of revenue and a place to experience IQOS. When selling new or limited-edition products in Japan, many people want to see and try them as soon as possible, which has the advantage of increasing the number of visitors to convenience stores. I think we can do this because we have a deep partnership. –In addition to the transition from paper rolls, the glow of other companies. Are you trying to get a transfer from Plume Tech? The Japanese market is large and this heat-not-burn tobacco accounts for only 30% of the total market. That’s why I think there is room for users of other companies’ products to just say, “Please switch to IQOS.” In addition, for people in their 50s and above, it will be necessary to provide information such as “If you are willing to continue smoking, you have the option of using heat-not-burn tobacco.” Cooperation with the government and local governments is also important, and we are working to reduce the risk of fire by developing a dedicated heated tobacco room in a UNESCO World Heritage site such as Shirakawa-go. As of January 2010, there are 19 such “smoke-free landmarks ” nationwide, and there are nationwide food and beverage-related facilities that have introduced heat-not-burn tobacco rooms that meet the standards of the national and local governments. There are 2700 cases. I think it is important to convey the harmful effects of cigarettes in this way and to appeal that there are “merits like this” when shifting to heat-not-burn tobacco.
As a leader of a Japanese corporation, do you have any policies or important things in your work? You have to build a strong team to keep producing results, so you need to hire the best people first. And I set high aspirations and try to go together. What do you do for that? I want to create an organization where each employee can think and act for himself. Company assets are inclusive for people with diverse skills and ideas.I think it is whether or not you can work in a unique corporate culture. Also, I try to listen to and respect people’s opinions because I am not completely aware of Japan. I have learned in various countries and regions, but I try to take a stance of re-learning.
Strengthen your presence in Japan with IQOS as a weapon
The above is the content of the interview with President Go. It is understandable to entrust President Go with the management of the Japanese corporation, which PMI positions as one of the most important markets because he knows all about the Asian market. Under such circumstances, we have established heat-not-burn tobacco rooms in Shirakawa-go and Fuji Speedway. It is a measure that is based on listening to people’s opinions and understanding Japan, and it seems that IQOS will continue to be used as a weapon to strengthen its presence in Japan. It can be said that the luxury items such as tobacco and alcohol are basically difficult businesses in which you have to sell things that are not good for your health. Therefore, it is worth noting how much the abundant experience of President Go can be utilized.