KT&G and Philip Morris Korea Intensify Heated Tobacco Competition With Price Cuts and Experience Marketing
South Korea’s heated tobacco products (HTP) market is witnessing increasingly intense competition between two major players. KT&G and Philip Morris Korea. With the two companies separated by only around 1 percentage point in domestic market share, both are adopting aggressive strategies to attract adult smokers and expand their consumer base.
KT&G has launched a significant price promotion for its new Lil Solid Easy heated tobacco device, while Philip Morris Korea is strengthening brand engagement through experiential marketing campaigns such as music festival activations for IQOS.
Key Highlights
- KT&G launched a 50% discount promotion for its newly released Lil Solid Easy heated tobacco device.
- Philip Morris Korea is using IQOS experience marketing to attract younger adult consumers through events such as Waterbomb Festival.
- KT&G currently holds approximately 46% of South Korea’s heated tobacco market share, while Philip Morris Korea holds about 45%.
- The two companies are competing for a narrow 1% market share gap.
- Both companies aim to convert traditional cigarette smokers into heated tobacco product users.
KT&G Launches Half-Price Promotion for Lil Solid Easy Device
According to a July 2 report by Digital Times, KT&G and Philip Morris Korea are competing aggressively in South Korea’s heated tobacco market, with price promotions becoming one of the key strategies.
Industry sources reported that KT&G began selling its Lil Solid Easy heated tobacco device at a 50% discount through the official Lil Store operated on Naver Store.
The product was launched in mid-June, meaning the promotional campaign began less than one month after its market introduction. The discount rate is significantly higher than promotions for other KT&G heated tobacco products, including:
- Lil Hybrid 3.0: approximately 28% discount;
- Lil Able 2.0: approximately 39% discount;
- Lil Solid Easy: approximately 50% discount.
The aggressive pricing strategy demonstrates KT&G’s efforts to quickly expand adoption of its latest device and defend its leading position in the domestic heated tobacco market.
Philip Morris Korea Expands IQOS Experience Marketing Strategy
While KT&G is focusing on pricing, Philip Morris Korea is emphasizing consumer experience and brand engagement.
Philip Morris Korea launched the IQOS Iluma i One heated tobacco device in June and plans to promote the product through offline marketing activities at the Waterbomb Festival held at KINTEX Outdoor Global Stage in Ilsan, Gyeonggi Province.
The company previously participated in Waterbomb Festival marketing activities in 2024. In 2025, Philip Morris Korea expanded its presence by introducing interactive spaces including:
- IQOS Lounge;
- Consumer experience zones;
- Treasure hunt events.
Through these activities, Philip Morris Korea aims to strengthen brand awareness and attract adult consumers interested in switching from conventional cigarettes to heated tobacco products.
Heated Tobacco Market Share Gap Narrows to Around 1%
The competition between KT&G and Philip Morris Korea has intensified because South Korea’s heated tobacco market continues to grow while the market share difference between the two companies remains extremely narrow.
According to KT&G’s first-quarter earnings report, the company’s domestic heated tobacco market share is approximately 46%.
Meanwhile, Philip Morris Korea’s market share is estimated at approximately 45%.
The current 1 percentage point difference has created a highly competitive environment, with both companies seeking incremental growth through product launches, promotions, and consumer acquisition strategies.
Philip Morris Korea Seeks to Regain Market Leadership
For Philip Morris Korea, the current competition represents an opportunity to regain the leading position it previously held.
The company gained strong market momentum after introducing IQOS to South Korea in 2017. However, KT&G’s Lil product line expanded rapidly, allowing KT&G to overtake Philip Morris Korea around 2022.
Since 2024, Philip Morris Korea has accelerated its efforts to regain market leadership by:
- Launching new IQOS devices;
- Expanding consumer experience marketing;
- Increasing engagement with adult smokers;
- Strengthening its heated tobacco product ecosystem.
Device Switching Remains the Key Challenge for Both Companies
Industry observers believe that the biggest challenge for heated tobacco companies is encouraging existing cigarette smokers to switch devices and adopt alternative nicotine products.
Unlike traditional consumer goods, heated tobacco devices often have longer replacement cycles. Once consumers select a device ecosystem, they may be less likely to switch frequently.
An industry source stated that the key competition is not only attracting new customers but also convincing existing cigarette smokers to transition to heated tobacco products.
South Korea Heated Tobacco Competition Enters a New Phase
The rivalry between KT&G and Philip Morris Korea reflects a broader transformation in South Korea’s nicotine market.
As heated tobacco products continue gaining market share, major companies are increasingly competing through different strategies:
- KT&G is leveraging pricing advantages and domestic brand strength.
- Philip Morris Korea is focusing on global IQOS technology and experiential marketing.
- Both companies are investing in product innovation to capture adult smokers seeking alternatives to traditional cigarettes.
With only a narrow market share gap separating the two leaders, South Korea’s heated tobacco market is expected to remain highly competitive as companies fight for consumer loyalty and market leadership.
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