KT&G, South Korea's largest tobacco company, said on June 8 that it is seeking to gain more ground in the US by relocating its U.S. headquarters from Oklahoma City to Dallas in Texas and expanding distribution channels as sales of KT&G cigarettes have been growing steeply.
The state of Texas is where nearly 20 global cigarette makers are fiercely competing against one another. KT&G is the third-largest cigarette brand in Texas. KT&G is poised to leverage its strong presence in Texas in expanding its business across the US.
KT&G’s US sales hit an all-time high last year: the company sold a total of 2.82 billion cigarettes in the US, up 1,200 percent from its first-year US sales of 220 million cigarettes in 1999. Currently, KT&G is the sixth-largest in terms of sales in the US market, an arena of competition among 100 cigarette manufacturers.
KT&G’s best-selling brand is ‘Time’ in the US. Since KT&G set up its American subsidiary in 2010, the company has been introducing cigarette products tailored to American consumers. Time has taken the lead in driving up US sales. Time, which had accounted for a meager 17 percent of total sales in the first year of its launch, now takes up 80 percent of shipments to the US. Last year, the company sold 2.33 billion Time cigarettes in the US.
KT&G plans to increase sales though duty-free shops at airports and large supermarket chains, as well as existing retail distribution channels. Making efforts to increase its presence at duty-free shops located in airports in major cities such as Chicago, Seattle and Las Vegas, KT&G is pushing to make its cigarettes available at Costco, the largest warehouse retailer in the US. As of now, KT&G is selling its cigarettes at six duty-free shops located in airports in New York and L.A. etc. and at warehouse club retailer Sam’s Club.
Yoo wan-kyun, CEO of KT&G USA, said: “Our strong product portfolio and thorough market research have helped us establish ourselves in the US, the world’s third-largest tobacco market. We are currently supplying to 45 states in the country.”
