KT&G’s flagship cigarette brand is key in driving its global expansion. Photo credit: KT&G
While Korea’s beauty and food sectors continue to make strides abroad, KT&G is quietly turning cigarettes into one of the country’s most successful exports.
In the first quarter, KT&G’s overseas cigarette sales hit KRW449.1 billion (US$327 million), overtaking domestic sales of KRW373.6 billion (US$272 million) for the first time. Analysts expect international growth to continue driving the company’s performance this year. Global sales volume rose 23% year-over-year, while revenue surged 54%. Meanwhile, domestic sales dipped by KRW9.3 billion (US$6.8 million), reinforcing the company’s international pivot.
According to The Korea Herald, a Kyobo Securities analyst said this highlights a clear shift toward an overseas-centered business model, pointing to a jump in KT&G’s global tobacco sales share—from 39.5% last year to 47.5% this quarter.
KT&G’s international cigarette revenue has steadily climbed: KRW1.01 trillion (US$736 million) in 2022, KRW1.13 trillion (US$823 million) in 2023, and a 28% increase to KRW1.45 trillion (US$1.06 billion) in 2024.
Projections from FN Guide suggest full-year sales will reach KRW6.34 trillion (US$4.62 billion), up 7.3% year-over-year, with operating profit expected to grow nearly 10% to KRW1.31 trillion (US$954 million).
The company’s achievement is a manifest of c.e.o. Bang Kyung-man’s drive for a “fully localized global value chain.”
“With a spirit of challenge, KT&G will continue to expand its global direct business to enhance both profitability and corporate value,” Bang said.
Now active in 135 markets, KT&G has used targeted regional strategies and expanded direct sales networks to put its flagship brand Esse at the center of its export push.
Esse has seen major success in Asia-Pacific markets. In Indonesia—which accounts for over 20% of KT&G’s global tobacco sales—the company tailored products like Esse Berry Pop to local preferences for clove cigarettes. In Mongolia, KT&G’s market share surpassed 50% in 2023. Annual sales there rose from 300 million sticks in 2011 to 2.35 billion in 2024.
June marked KT&G’s official entry into India’s tobacco market through a distribution partnership with Kedara Trading LLP. The deal introduces KT&G’s premium products to cities such as New Delhi and Mumbai. The company expects India to become a major growth market as demand for premium international cigarettes rises alongside the expanding middle class.
KT&G’s reach now extends well beyond Asia. In the first quarter, the UAE became its top export destination, with shipments more than doubling to over 3,000 metric tons. Products exported to the UAE are redistributed across the Middle East.
KT&G officially kicked off its European expansion by bringing ESSE to Germany. On July 3, the company began selling ESSE in major German cities—Berlin, Dortmund, and Munich—through its distribution partner, Hauser. KT&G plans to steadily widen its reach across the country, which represents one of Europe’s largest and most competitive tobacco markets, where leading global brands compete for consumer attention. This launch marks the first step in the company’s broader strategy to boost brand recognition and grow market share across Europe.
KT&G’s entry into Europe goes beyond widening its geographic reach; it’s a strategic effort to tap into the growing demand for premium tobacco products. With Esse capturing a third of the global ultra-slim market, the brand resonates with smokers who prioritize sophistication and quality. Germany, where 28% of smokers favor slim formats, offers KT&G a prime opportunity to grow in a high-margin segment.
To support this growth, KT&G is scaling up manufacturing abroad. In April, it opened a new plant in Kazakhstan with capacity to produce 4.5 billion sticks per year. Another facility is currently under construction in Indonesia. Its global production network now includes plants in Korea, Indonesia, Russia, Turkey, and Kazakhstan.