TOKYO (Reuters) - British American Tobacco will expand sales of its "glo" tobacco-heating device to Tokyo and Osaka from July and roll it out nationwide by year-end, intensifying a battle with Philip Morris International for a share of Japan's vaping market.
Big tobacco firms are investing in alternative products as more people give up traditional cigarettes amid health concerns. Japan has emerged as a popular testing ground, mainly for "heat not burn" tobacco devices, given e-cigarettes using nicotine-laced liquid are not permitted under the country's regulations.
In fact, both glo and Philip Morris' vaping device "iQOS" were launched in Japan and have limited sales outside.
Glo has been on sale in the northeastern city of Sendai since December and iQOS was rolled out across the country in April 2016. According to their manufacturers, the products have been so popular in Japan that supply has fallen short.
British American Tobacco, known for Kent and Lucky Strike cigarettes, will start selling glo in the western Japanese city of Osaka, Miyagi in the country's northeast and Tokyo from July 3, its Japan President Roberta Palazzetti said.
"Our ambition is to be a leader in next generation-products in Japan," Palazzetti said at a news conference on Tuesday.
Glo, like iQOS, uses tobacco packed in replaceable sticks. Instead of burning, the battery-powered devices heat the sticks to generate vapour, which their makers say emit less harmful chemicals than conventional cigarettes.
Marlboro-maker Philip Morris estimates that HeatSticks, used in iQOS, had already cornered a 10 percent share of the Japanese market as of April, up from 7.6 percent in January.
Apart from Japan, iQOS is available in at least 19 other markets. Glo went on sale in Switzerland and Canada earlier this year.
The latest version of iQOS is priced at 10,980 yen (77 pounds), while glo is priced at 8,000 yen. Japan Tobacco Inc's vaping product "Ploom TECH", which is set to be sold in Tokyo from June 29, costs 4,000 yen.
The former state monopoly, which commands 60 percent of Japan's cigarette market, has been lagging in the new product category, but says it is aiming to grab the top share of the country's vaping market in three years.
Japan Tobacco plans to spend 10 billion yen in marketing as it expands the sale of Ploom Tech to the rest of Japan in the first half of 2018, CEO Mitsuomi Koizumi told Reuters on Monday.
Reporting by Taiga Uranaka; Editing by Himani Sarkar