Heated Tobacco Products Market Outlook, 2030

Heated tobacco products (HTPs) are perceived to contain low levels of nicotine and chemicals, boosting their popularity among the smoking demographic. Many smokers consider them to be a potentially less harmful alternative to traditional smoking because they involve heating tobacco rather than burning it. This process generates fewer harmful chemicals compared to conventional cigarettes, does not produce smoke, and can be used multiple times, which are notable advantages for shifting people to these solutions. The origins of HTPs can be traced back to 2014, when Philip Morris International (PMI) launched IQOS in Japan, marking a pivotal moment in the tobacco industry.

These products, which heat rather than burn tobacco, were marketed as less harmful alternatives to traditional cigarettes. The concept quickly gained popularity, especially in Asia, with Japan and South Korea becoming early adopters. The demand for HTPs has been largely fueled by adult smokers seeking reduced-risk alternatives, stricter smoking regulations, and growing health consciousness. Consumers are increasingly attracted to these products for their cleaner user experience, minimal odor, and sleek, high-tech design. Marketing and promotion have played a crucial role in the rapid growth of this sector. Tobacco companies have invested heavily in branding, experiential retail, influencer endorsements, and digital advertising, often targeting younger demographics through subtle yet engaging campaigns. From a policy and regulatory standpoint, the HTP market is marked by inconsistencies across countries. While some nations like Japan have embraced HTPs with minimal restrictions, others such as Australia and India have imposed bans or stringent controls. Additionally, the World Health Organization (WHO) has expressed concerns over unproven health claims and the risk of HTPs undermining tobacco control efforts. Despite regulatory hurdles, the future of the global HTP market looks promising, with projections suggesting exponential growth due to continued product innovation, expansion into new markets, and shifting consumer behavior.

According to the research report “Global Heated Tobacco Products Market Outlook, 2030”, the global Heated Tobacco Products market is projected to reach market size of USD 204.14 Billion by 2030 increasing from USD 40.39 Billion in 2024, growing with 31.67% CAGR by 2025-30. A number of regional brands have also emerged in recent years, launching innovative solutions to improve product efficiency and user satisfaction. For instance, China-based REJO has aimed to address the issues of lower puffs provided per stick and thin cloud densities seen in existing brands through the launch of the REJO Mate Air.

According to the company, their product deploys a reverse heating technology called 'round heating', which substantially increases the heating surface and leads to the generation of more clouds in less time. REJO states that this technique helps improve the number of puffs from 12 to 14 or 16 that can be extracted out of each stick. Additionally, strategic moves by key players like Philip Morris International (IQOS), British American Tobacco (glo), and Japan Tobacco International (Ploom) to expand their portfolios and enter new geographies have fueled competition and awareness. Interesting supporting events include FDA’s approval of IQOS as a Modified Risk Tobacco Product in the U.S., allowing reduced-exposure claims, and PMI’s large-scale investments in R&D and digital marketing to rebrand itself as a "smoke-free" company. Marketing efforts, despite increasing global restrictions, remain creative, with companies adopting experiential campaigns, influencer collaborations, and metaverse promotions to engage audiences while bypassing traditional advertising channels. Moreover, easy clearance from the U.S. Food and Drug Administration (FDA) and equivalent regulatory bodies from Europe and Asia are anticipated to indicate well for the market's growth. For instance, in 2018, Philip Morris International Inc. received FDA approval for its heated tobacco products sold in the United States. Furthermore, the global manufacturers projected rising online sales and media campaigns to drive product sales in the upcoming years. In addition, the rising acceptance of e-cigarettes is expected to restrain the adoption of HTPs, thereby hindering the growth of this market. E-cigarettes do not contain tobacco and consist of relatively lesser amounts of harmful agents than conventional tobacco products. Such benefits are expected to increase the adoption of e-cigarettes and hinder the growth of the global heated tobacco products market.

Market Drivers

• Rising Health Awareness and Demand for Reduced-Risk Alternatives to Smoking: One of the most important drivers of the heated tobacco products market is the growing consumer demand for alternatives to traditional combustible cigarettes. Increasing awareness about the harmful effects of smoking has led many users to seek less harmful nicotine delivery systems. Heated tobacco products are marketed as reduced-risk products (RRPs) since they heat tobacco at lower temperatures without combustion, which significantly reduces the release of harmful chemicals. As a result, many adult smokers are switching to HTPs as a harm reduction strategy, especially in regions where public health messaging supports tobacco harm minimization. The perceived health benefits and growing trust in scientific data supporting lower toxicant emissions have contributed to a sharp rise in HTP adoption globally.
• Strong Backing from Tobacco Giants and Aggressive Product Innovation: Major tobacco companies like Philip Morris International (IQOS), British American Tobacco (glo), and Japan Tobacco International (Ploom) have heavily invested in developing, marketing, and expanding the reach of heated tobacco products. Their global reach, marketing capabilities, and product innovation are driving widespread adoption. These companies continuously improve device design, battery efficiency, flavor options, and user experience, making HTPs more attractive and accessible. Strategic partnerships, mergers, and entry into new markets through regulatory navigation have further propelled the industry forward. With strong R&D pipelines and the ability to scale production quickly, these firms are driving rapid product penetration across developed and emerging markets.

Market Challenges

• Regulatory Uncertainty and Restrictions Across Regions: One of the biggest hurdles faced by the HTP industry is the complex and inconsistent regulatory environment across countries. While some nations treat heated tobacco products as reduced-risk products and support their use as smoking alternatives, others regulate them in the same way as traditional tobacco or even ban them altogether. These discrepancies affect product availability, marketing, taxation, and consumer access. For instance, the U.S. FDA has authorized the marketing of IQOS as a modified risk tobacco product (MRTP), while other countries like Australia impose strict restrictions. This fragmented policy landscape poses a significant barrier to market expansion and creates uncertainty for manufacturers investing in new markets.
• High Cost of Devices and Limited Consumer Awareness in Emerging Economies: While HTPs offer a cleaner alternative to traditional smoking, the initial cost of purchasing a device can be a deterrent, especially in price-sensitive markets. These devices often require a higher upfront investment compared to a pack of cigarettes, along with recurring costs for tobacco sticks or cartridges. Moreover, in many developing countries, awareness of heated tobacco products remains low. Lack of education about their relative risks, combined with minimal marketing due to advertising restrictions, means that many smokers are unaware of HTPs or skeptical about their efficacy and safety. This lack of awareness and affordability limits the pace of market penetration outside developed regions.

Market Trends

• Increasing Popularity of Flavored and Customizable Products: The demand for flavored heated tobacco sticks and cartridges is on the rise, especially among younger adult users. Consumers are drawn to diverse flavor profiles like menthol, fruity, coffee, or herbal blends, which enhance the user experience and differentiate HTPs from conventional cigarettes. This trend aligns with the broader consumer movement toward personalization and lifestyle-driven choices. In response, manufacturers are investing in expanding their flavor portfolios while navigating flavor bans and regulatory limitations. The growing interest in flavor diversity is not only a marketing advantage but also plays a critical role in encouraging users to transition away from traditional smoking.
• Integration of Smart Technology and Digital Ecosystems: Heated tobacco devices are increasingly incorporating advanced technologies such as Bluetooth connectivity, app-based usage tracking, and charging innovations. These smart features allow users to monitor their consumption, receive device updates, and even personalize heating settings. Companies are building digital ecosystems around their products to create brand loyalty, provide product education, and facilitate age-restricted sales. This tech-driven approach appeals particularly to younger, tech-savvy consumers and contributes to the premium positioning of HTPs. The integration of technology also helps manufacturers collect user data to improve product design and compliance, fostering a more engaged consumer base.

Tobacco sticks lead the global heated tobacco products industry due to their widespread consumer acceptance, ease of use, and strong alignment with existing smoking habits, making them the most practical and preferred option for adult smokers transitioning from traditional cigarettes.

Tobacco sticks have emerged as the dominant product type in the global heated tobacco products (HTPs) industry primarily because they most closely replicate the experience of smoking a traditional cigarette, offering familiarity and ease of use to adult smokers seeking reduced-risk alternatives. These small, cigarette-like sticks, filled with processed tobacco, are designed to be heated not burned using specialized devices. This method produces a nicotine-containing aerosol without combustion, thereby significantly reducing the production of harmful chemicals typically associated with cigarette smoke.

For smokers transitioning away from combustible tobacco, tobacco sticks offer a less disruptive shift, maintaining the ritualistic and sensory aspects of smoking while potentially minimizing health risks. Moreover, tobacco sticks are convenient, pre-portioned, and require no refilling or manual handling of loose tobacco, making them user-friendly compared to other forms like loose-leaf heated tobacco or hybrid systems. The dominance of market players like Philip Morris International (IQOS) and British American Tobacco (glo), both of which heavily market tobacco stick-based systems, has further entrenched these products in consumer markets worldwide. These companies have also ensured widespread product availability and strong brand visibility, especially through offline retail channels, enhancing access in regions like Asia Pacific and Europe. In countries such as Japan and South Korea where traditional smoking rates were historically high and regulatory environments have been favorable tobacco sticks have seen massive adoption, creating a ripple effect across global markets. Additionally, the consistent flavor, standardized portion sizes, and availability of multiple variants (e.g., regular, menthol, and other flavors) make tobacco sticks appealing to a broader audience.

Adult smokers aged 25-45 lead the global heated tobacco products industry because they represent the most health-conscious, economically capable, and brand-responsive segment actively seeking alternatives to traditional smoking.

The dominance of adult smokers aged 25-45 in the global heated tobacco products (HTPs) industry is driven by a combination of lifestyle, economic, and behavioral factors that make this demographic the ideal target for alternative nicotine delivery systems. This age group is at a critical juncture where health awareness is rising, yet long-term smoking habits may still be deeply ingrained. They are actively seeking harm-reduction alternatives that allow them to continue nicotine consumption in a perceived safer manner. Heated tobacco products, which offer the ritual and satisfaction of smoking without combustion, cater precisely to these needs.

Furthermore, individuals in this age range typically have higher disposable incomes compared to younger adults, enabling them to afford the relatively higher upfront cost of HTP devices and the ongoing expense of tobacco sticks or cartridges. Their digital literacy and openness to innovation also make them more receptive to new product categories and modern marketing approaches. Brands leverage this by promoting HTPs through sophisticated campaigns that emphasize lifestyle enhancement, reduced harm, and sleek technology messaging that strongly resonates with this cohort. Additionally, adult smokers aged 25-45 are more likely to be influenced by social norms and workplace restrictions that discourage traditional smoking, driving them toward cleaner and more discreet alternatives like heated tobacco. Many in this age group are also entering or in the midst of family life, further motivating them to switch to less odorous and lower-risk products for the sake of their households.

The offline channel dominates the global heated tobacco products industry because it offers direct consumer engagement, regulatory compliance, and controlled product education crucial for promoting adoption and trust in emerging nicotine alternatives.

The offline sales channel continues to lead the global heated tobacco products (HTPs) industry due to its ability to offer personalized customer interaction, secure product placement, and immediate product availability all of which are essential for building consumer confidence in a relatively new category. Heated tobacco products often require detailed consumer education, especially for first-time users unfamiliar with the technology or how it differs from traditional cigarettes and e-cigarettes. Offline retail settings such as convenience stores, specialty tobacco shops, and brand-owned outlets provide a platform for one-on-one customer service, where trained staff can explain the product's usage, benefits, maintenance, and safety features.

This personalized interaction is critical in gaining consumer trust and ensuring proper usage, which is difficult to achieve through purely online platforms. Furthermore, the physical retail environment enables consumers to touch, feel, and sometimes test the devices, giving them a tactile reassurance before purchase, which is particularly important for high-value products like heated tobacco devices. Offline channels also offer strategic placement of tobacco sticks and devices in high-traffic areas, which supports impulse buying and routine purchase behavior, especially among existing smokers who are considering alternatives. In markets such as Japan, South Korea, and several European countries where heated tobacco has seen strong adoption the offline channel has been instrumental in initial product rollouts and brand building. Additionally, many jurisdictions impose strict regulations on the online sale of tobacco-related products due to age verification and public health concerns. Offline stores, by contrast, can ensure compliance through in-person age verification, making them a more legally secure and preferred distribution method in many regions.

The Regular flavor category leads the global heated tobacco products industry because it closely replicates the taste of traditional cigarettes, appealing strongly to transitioning adult smokers seeking familiarity and satisfaction.

Regular flavor is the dominant category in the global heated tobacco products (HTPs) market because it provides a taste profile that closely mimics that of conventional cigarettes, making it the preferred choice for adult smokers who are shifting to reduced-risk alternatives. Unlike flavored variants such as menthol, fruit, or exotic blends, the regular or "classic tobacco" flavor resonates with users who are primarily looking to replace their cigarette consumption without drastically altering their sensory experience. This familiarity significantly reduces the psychological barrier for smokers attempting to transition, as it retains the core essence of tobacco taste, throat hit, and aroma.

Most adult users, especially those aged 25 to 45, the primary demographic for HTPs prioritizes this seamless shift over experimentation with unfamiliar flavors. This behavioral tendency supports sustained demand for regular flavors across mature and emerging markets alike. Moreover, in many countries, regulations around flavored tobacco products are becoming stricter due to their potential appeal to non-smokers and younger populations. This regulatory push has further elevated the importance and market share of regular flavor offerings, which are generally more acceptable from a policy standpoint and thus more widely available. Key industry players such as Philip Morris International (IQOS), British American Tobacco (glo), and Japan Tobacco International (Ploom) continue to prioritize regular flavor variants in their product portfolios, often promoting them as the flagship option in both marketing and retail strategies. Their investment in refining regular flavor tobacco sticks to replicate the authentic smoking experience has led to technological improvements in heating systems and stick design, enhancing flavor delivery and consistency.

Asia Pacific leads the global heated tobacco products industry due to high smoking prevalence, favorable regulatory environments, and early product adoption in key markets like Japan and South Korea, and strong regional investments by leading tobacco companies.

Asia Pacific has emerged as the dominant region in the global heated tobacco products (HTPs) industry, largely driven by a unique convergence of high consumer demand, regulatory openness, cultural acceptance of alternative tobacco formats, and aggressive market expansion by leading manufacturers. The region has some of the highest smoking rates globally, particularly in countries like Japan, South Korea, and China, where large populations of adult smokers have been actively seeking reduced-risk alternatives to traditional cigarettes.

Heated tobacco products, which offer a cleaner, combustion-free nicotine experience, have resonated well with these users due to their ability to mimic the ritualistic and sensory elements of smoking while potentially reducing exposure to harmful chemicals. Japan was the first country to witness widespread adoption of HTPs, driven by the early introduction and successful commercialization of IQOS by Philip Morris International. The Japanese government’s regulatory stance, which allows the sale of heated tobacco products while imposing strict limits on e-cigarettes with nicotine, created an ideal market environment for rapid growth. South Korea followed a similar path, becoming one of the largest global markets for HTPs, supported by both consumer demand and the presence of strong domestic brands like KT&G. The openness of regulatory frameworks in these nations has enabled manufacturers to invest heavily in marketing, retail infrastructure, and product innovation, ensuring wide consumer access and education. Asia Pacific’s success is also tied to its highly developed retail ecosystems and consumer willingness to adopt high-tech lifestyle products. Furthermore, major tobacco companies have made Asia Pacific a priority investment region, launching exclusive product lines, establishing branded stores, and forming strategic partnerships with local distributors. In countries like China and Indonesia, although the market is still emerging, the potential is immense due to their massive smoker populations and gradually shifting regulatory landscapes.

• In March 2024, British American Tobacco announced the opening of the cutting-edge 'Innovation Centre' facility at the company's Southampton-based R&D headquarters. The facility would speed up the development of the company's New Category, Reduced Risk Products, through nine technical spaces. Products to be developed include heated tobacco products, vapor product liquids and flavors, and modern oral nicotine pouches. The development supports BAT's 'Build a Smokeless World’ strategy to generate 50% of its overall revenue from non-combustible solutions by 2035.
• In March 2024, Philip Morris International launched the 'IQOS ILUMA i' range of heated tobacco products in Japan, marking a decade since the company first introduced its IQOS portfolio in the country. Similar to other devices in this range, the new products emit 95% fewer harmful chemicals on average when compared to conventional cigarettes. Devices in this line include the IQOS ILUMA i PRIME, IQOS ILUMA i, and IQOS ILUMA i ONE, all of which use PMI's bladeless SMARTCORE INDUCTION SYSTEM.
• In 2023, KT&G entered a fifteen-year partnership agreement with PMI to expand its lil HTP line in the global market. PMI is also licensed to market lil SOLID 1.0 and lil SOLID 2.0.
• In October 2023, similarly to PMI, BAT announced that it had launched a new non-tobacco stick for glo, called veo, made with Rooibos tea leaves, and infused with nicotine and flavours.
• In September 2023, PMI announced that it had developed a product for IQOS devices called LEVIA containing “non-tobacco substrate infused with nicotine and tobacco, menthol and fruit flavorings.4960 It appeared that this was developed to circumvent regulations that apply to heat sticks containing tobacco, specifically bans on flavors.