The India cigar and cigarillos market comprises hand-rolled cigar and cigarillos that contain tobacco. Cigars and cigarillos are consumed for pleasure and relaxation. The culture of cigar smoking is spreading rapidly across the country, propelling the demand for high-quality cigars and cigarillos. Further, growing disposable income allows people to spend more on luxury items like cigars and cigarillos for leisure.
The global India Cigar And Cigarillos Market is estimated to be valued at Us$ 3659.92 Bn in 2023 and is expected to exhibit a CAGR Of 10% over the forecast period 2024 To 2031, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The increase in disposable income levels have provided an impetus to the India cigar and cigarillos market. With economic development, income levels of individuals are rising steadily. Higher disposable incomes allow people to spend more on luxury and premium products. Cigars and cigarillos are considered as luxury products and are preferred by people for leisurely smoking. As disposable incomes grow, the spending ability on luxury items like cigars and cigarillos increases. This presents lucrative growth opportunities for players in the India cigar and cigarillos market over the forecast period. Rising affordability will attract more consumers towards premium cigars and cigarillos segment, thereby driving revenues in the market.
Porter's Analysis
Threat of new entrants: The threat of new entrants is moderate as large capital investment is required to set up manufacturing units and have widespread distribution networks across India. However, it is easy for new players to enter through imports.
Bargaining power of buyers: Bargaining power of buyers is high due to availability of substitutes and fragmentation of buyers in the market. Buyers also have more options in terms of brand, price and quality making their bargaining power stronger.
Bargaining power of suppliers: Bargaining power of suppliers is moderate as some key raw materials like tobacco leaves and raw papers require specialized farming. However, suppliers have lesser bargaining power as there are many alternatives available.
Threat of new substitutes: Threat of new substitutes is moderate since products like cigarettes and pipe tobacco are available at cheaper prices and serve as alternatives. However, the experience delivered by cigars is unique compared to other substitutes.
Competitive rivalry: The competitive rivalry is strong due to presence of numerous local and multinational manufacturers actively competing on the basis of brand, pricing, innovation and promotion.
SWOT Analysis
Strengths: Strong brand presence of leading players, widespread distribution network, innovation in product offerings.
Weaknesses: Health impacts of tobacco, stringent regulations and higher taxes imposed by government.
Opportunities: Growing young adult population, increasing disposable incomes, rising social acceptance and exposure through media.
Threats: Ban on advertising and promotion, high rate of taxation, increasing health awareness.
Key Takeaways
The Global India Cigar And Cigarillos Market Demand is expected to witness high growth during the forecast period supported by growing purchasing power and acceptance among younger consumers.
The western region currently dominates the market owing to high disposable incomes and awareness levels in cities like Mumbai and Delhi. However, the southern region is expected to record fastest growth led by rising consumption in Bangalore and other developing states.
Key players operating in the India cigar and cigarillos market are ITC Ltd, Godfrey Phillips, Golden Tobacco, GBH International, and Indian Tobacco Company. ITC Ltd leads the market with a wide array of popular cigar brands like Classmate, Flake and Berkeley. Godfrey Philips also enjoys strong brand equity through its flagship brand, Cavendish and Blue Line among smoking community.
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