Key points:
- KT&G has relocated its production of the “lil Hybrid 3.0” heated tobacco device from Vietnam to Malaysia due to sudden regulatory changes in Vietnam.
- The supply of the device, which had been disrupted, has now been normalized in South Korea as of early May 2025.
- KT&G’s lil series currently holds approximately 46% of South Korea’s heated tobacco market, maintaining a lead over Philip Morris International’s iQOS.
South Korean tobacco company KT&G has relocated the production of its “lil Hybrid 3.0” heat-not-burn (HnB) device from Vietnam to Malaysia, restoring its supply in the domestic market. The move comes after sudden regulatory changes in Vietnam disrupted production and sales earlier this year.
Background
KT&G’s subsidiary, Elentec, had been manufacturing the “lil Hybrid 3.0” in Hanoi, Vietnam. However, in December 2024, the Vietnamese government abruptly ordered the cessation of operations at the facility due to new regulations targeting e-cigarettes and heated tobacco products. The unexpected policy shift led to a halt in production and a subsequent suspension of sales in South Korea by February 2025.
Swift Relocation and Supply Restoration
Initially anticipating supply issues to persist until June, KT&G expedited the relocation process to Malaysia. By early May 2025, the company had resumed normal distribution of the “lil Hybrid 3.0” in South Korea. A KT&G representative stated, “Due to supply issues caused by changes in Vietnamese policies, the problem is being quickly resolved, and products have been restored to supply since the beginning of this month.”
Market Position and Outlook
With the supply chain stabilized, KT&G is poised to reinforce its leadership in South Korea’s heated tobacco market. The company’s “lil” series currently holds approximately 46% market share, maintaining a lead over Philip Morris International’s “iQOS”, which holds about 44%.
KT&G’s swift response to the regulatory challenges in Vietnam and the subsequent relocation of its production facility underscore its commitment to maintaining a stable supply chain and market leadership. The company’s proactive measures are expected to further solidify its position in the competitive heated tobacco market.
