Demand for BAT’s smokeless tobacco ‘glo’ exceeds supply

Earlier this month, BAT had to more than double the supply of its tobacco device to quench local demand and still that wasn’t enough.

British American Tobacco (BAT) has stated that the demand for its “glo” tobacco heating device has surpassed supply in its test marketing in Japan.

BAT is strategically shifting its focus to this new product category midst a decline in smoking populations. In Japan, the “heat but not burn” tobacco is rapidly gaining popularity with Philip Morris International saying that the sales of its IQOS tobacco device has more than doubled.

Incidentally, Philip Morris and BAT were the first big tobacco companies to have invested in alternative cigarettes.

Both IQOS and glo use tobacco leaves shaped as cigarettes but instead of burning them the battery-powered devices heat up the sticks to generate steam. Both companies say their products emit far less smell than traditional cigarettes.

Tobacco companies perceive the Japanese market as a fertile test ground for their products since nicotine-laced e-cigarettes use are banned under the country’s pharmaceutical laws.

“We are seeing very strong sales. It’s much beyond our expectations,” said Nami Uehara, a brand marketing executive at BAT Japan.

BAT started the sale of glo in December 2016. Priced at $70.52 (8,000 yen), the device sold like iPhones with locals queueing up in front of Bat’s flagship store to purchase the device said Uehara.

According to BAT, the daily supply for the device at its flagship store is 100, which jumps to 250 on weekends. Demand exceeds supply for the device.

“We were giving purchase tickets at 7 a.m. but all of them were gone instantly,” said Uehara.

BAT will start selling the glo pan-Japan later this year.

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Categories: Creativity, Entrepreneurship, HR & Organization, Strategy

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