The India cigar and cigarillos market is estimated to Witness High Growth Owing to Changing Consumer Tastes and Increasing Disposable Incomes
The India cigar and cigarillos market is estimated to be valued at USD 3.0 Mn in 2024, exhibiting a CAGR of 4.9% over the forecast period (2024-2031). Changing consumer tastes towards luxury items and premium tobacco products are driving the market growth. Furthermore, rising disposable incomes have empowered consumers to spend more on premium offerings.
Market Dynamics:
The India cigar and cigarillos market is witnessing steady growth due to increasing disposable incomes and changing consumer preferences towards luxury lifestyle goods. Rising disposable incomes have enabled consumers to spend more on premium tobacco products such as cigars and cigarillos. This augmented spending power has boosted expenditure on finer things in life including luxury tobacco items. Additionally, changing mindsets and growing exposure to global trends have made Indian consumers more receptive towards imported and premium cigar brands. Leading brands have capitalized on these evolving tastes through extensive marketing campaigns featuring celebrity endorsement. The market is expected to continue benefitting from the dual drivers of rising spending power and westernization of lifestyle trends in India.
Market Drivers, Restraints, and Opportunities for India Cigar and Cigarillos Market:
Increasing Disposable Income Levels Is Driving Growth in the India Cigar and Cigarillos Market
India has witnessed strong economic growth over the past decade which has significantly increased disposable income levels across the country. As incomes rise, consumers are able to spend more on luxury and premium products. Cigars and cigarillos are considered a luxury product in India and higher disposable incomes have enabled more consumers to indulge in cigars and cigarillos on special occasions. The growing middle and affluent classes with rising spending power present a huge opportunity for cigar and cigarillos brands to expand their customer base in India. If economic growth and job opportunities continue to increase disposable incomes going forward, it will remain a key driver of growth for the India cigar and cigarillos market.
Growing Culture of Socializing and Celebrations is Fueling Demand
Indians have a culture of socializing over drinks and snacks on occasions such as birthdays, anniversaries, festivals, and others. The thriving pub and bar culture in major Indian cities has further boosted the casual consumption of cigars and cigarillos during social gatherings. Furthermore, Indians spend lavishly on weddings and other family functions which provides opportunities for gift items such as premium cigars. The growing culture of socializing and celebrations in India is a major driver augmenting the demand for cigars and cigarillos.
Increasing Health awareness is Restraining Growth
While incomes are rising in India, so is health awareness. Growing education levels and health campaigns have made consumers more conscious about the health risks of tobacco products including cigars and cigarillos. Studies BMC Public Health, show that cigar and cigarillo smoking poses significant health risks such as cancers and heart diseases. The negative health perceptions have been restraining the growth of the overall tobacco market in India. Strict regulations have also been implemented on tobacco packaging and advertising. Increased health awareness along with regulations will continue restricting the potential growth of the India cigar and cigarillos market.
High Taxation Imposes Burden on Consumers
The Indian government levies heavy taxes on cigars and cigarillos to curb consumption and generate tax revenues. Goods and Services Tax (GST) and other taxes add substantially to the retail prices making premium cigar and cigarillo brands highly costly for average consumers. While the taxation policy aims to reduce tobacco usage, it also puts a significant burden on existing consumers and restricts trial among new users. High prices due to hefty taxes reduce the affordability of cigars and cigarillos limiting the addressable market size. The heavy taxation remains a major challenge for manufactures to boost volumes and a restraint on the potential growth of the market.
Opportunity from tourism and duty-free shops
The booming tourism industry in India presents an opportunity for the cigar market. Duty-free shops located in major airports see huge potential in selling premium cigars and cigarillos to foreign travelers. Demand is growing as more affluent global tourists from cigar-consuming countries visit India. Establishing strong partnerships between cigar importers and duty-free shop operators can help tap this untapped tourism-driven demand. Dedicated walk-in humidors and knowledgeable staff can provide visitors a unique shopping experience.
Growing Popularity of Premium Liquor and Western Culture
Exposure to western culture through media and travel has increased the trend of mixing cigars, cigarillos with premium liquor in urban India. Young professionals are taking up cigar smoking as a lifestyle accessory and to socialize over drinks. Premium liquor consumption as well as pub and bar culture is on the rise in Indian cities presenting the opportunity to pair cigars and cigarillos. Growing affinity towards western trends and premium beverages provides a platform to introduce exclusive cigar and premium liquor pairing experiences. Manufacturers need to capitalize on this opportunity through innovative experiences and strengthen the association between premium cigars, liquor and western lifestyle & culture.
In conclusion, while health awareness and taxation are restraining factors, rising incomes, growing socializing culture, tourism potential, and western influences present significant opportunities for the India cigar and cigarillos market to leverage and fuel future growth. Manufacturers will need innovative branding and experiential marketing approaches to overcome restraints and effectively tap the emerging opportunities.
Link: https://www.coherentmarketinsights.com/market-insight/india-cigar-and-cigarillos-market-4813
Key Player:
AJF Cigars, Boutique Blends Cigars, Fenn Thompson & Co., Royal Cigar Works, Gurkha Cigar Group, Imperial Brands, Joya De Nicaragua, S.A., Scandinavian Tobacco Group, Swedish Match AB, and Swisher
