Tobacco giant Philip Morris, makers of Marlboro and Parliament cigarettes, is betting on heated tobacco products, particularly its IQOS, as the better alternative of cigarettes of the world's billion smokers.
The company believes that the population of the world's smokers will not shrink any time soon and is working on increasing its IQOS's market share from the current 2.3 per cent.
Philip Morris has already launched IQOS in Asia and its four markets in the region are Japan, Malaysia, New Zealand and South Korea.
Paul Riley, Philip Morris's president for East Asia and Australia, said he is planning to convert at least half of the tobacco giant's market share in each country to IQOS.
With the industry expected to grow to $1.1 trillion in the next five years, the company is readying itself for its counter measure of disrupting the cigarette industry.
Riley says they are putting themselves "in a position to move out of the mainstream cigarette business" and likewise is taking on the challenge of disrupting and transforming the company.
He also added that the switch to heated tobacco is "what the consumer wants and it is just common sense because it's a less harmful alternative."
On average, ninety-five per cent of harmful chemicals get lowered by heating tobacco at 350 degrees Celsius (662 degrees Fahrenheit).
Tobacco in a cigarette burns at temperatures above 600 degrees and thus, chemicals like arsenic, benzene and formaldehyde, all linked to cardiovascular disease and lung cancer, among other diseases and illnesses, aren't released full-blown.
The 2015 IQOS launch in the Japanese market helped Philip Morris's market share by 10 percentage points to 34.
Riley points out to Japan's friendly regulation as one of the factors that contributed to the company's IQOS success.
E-cigarettes with nicotine have been banned in Japan since 2000 and this made Japanese smokers turn to heated tobacco products.
Heated tobacco products are not the same as e-cigarettes, the one linked to more than a thousand illnesses and 34 deaths in the US.
In e-cigarettes, a cartridge full of chemicals gets heated up while in heated tobacco products like IQOS, only a tobacco stick is used.
When it comes to its US success, Riley also said regulation was key with the new tobacco product review process.
Just this April, IQOS was the first electrically heated tobacco product to qualify for US sale.
Philip Morris has 27 per cent of the global market share with an operating income of $8 billion for the first nine months of 2019.
The company's net revenue is at $22.1 billion this year.
