Currently, chinese people pay RMB2.2bn for 370 million cigars every year, among which the low-end market accounts for 200 million, with the price per cigar at RMB0.3 or below; while 170 million real-sense cigars are sold, delivering a sales total of RMB2.1bn. As for market shares, top-end cigars account for 25%, mid-priced 30%, and low-end 45%, which are different from those in European and American countries, where the proportion of mid- to top-end cigars is close to 50%:50%, almost excluding low-end cigars.

Figure: Structure of Cigar Consumption in china

Cigars sold in China mainly fall into two categories, handmade and machine-made. The former are the traditional cigars totally made by hand. They are more expensive and are true cigars. The latter, on the other hand, are the result of mass production with machines. They look more like common cigarettes, and have lowered barriers for industry.

In the current market situation, China’s mid- and top-end cigar markets are mainly dominated by foreign cigars that have entered China through illegal channels. Incomplete data show that in shenzhen, GuangZhou and zhuhai these foreign cigars account for 90% of the local cigar markets. As for China’s homegrown cigar makers, they focus on the low-end market, targeting consumers of middle and lower income brackets, mainly because the tobacco for China’s local producers is from China itself, and the taste is not considered favorable. As a result, the finished products are not considered as superior. Currently China’s homegrown cigar makers mainly include Chuanyu Tobacco Corporation, Wuhan Tobacco, Anhui Tobacco, and Shandong Tobacco, with Great Wall, Lion, Maoda, and Three Gorges as the major brands.