Cigars in China: A Growing Market

The Chinese economy is booming, and the Financial Times is reporting that the Chinese manufacturing industry will be the world’s largest as of 2011. The U.S. led global manufacturing for 110 years, but next year we’ll be in second place.

As you might imagine, luxury is a noticeable side effect of the newborn economic giant, and when it comes to cigars, the Chinese are all puffed up.

Cigar manufacturers from Davidoff to Gurkha and beyond are beginning to see a good market for premiums building in Beijing, Shanghai, Hong Kong and other metropolitan areas. The majority of Chinese cigar smokers aren’t exactly aficionados, smoking low-quality “gas station” stogies. But an emerging market for “real” cigars has cultivated a dozen or so smoking lounges. The proprietors fear that the trend is not sustainable because so many new cigar smokers are taking it up for stylistic reasons. They’re worried that when the style wears off, so will the interest. Still, it is a rapidly growing market, ripe for profit.

According to a 2001 study: “The smoking of imported foreign cigars once was described as a ‘symbol of repugnant bourgeois decadence” during the cultural revolution, although smoking cigarettes was permissible and openly advocated by the party leadership including both Chairman Mao and Deng Xiaoping who were both heavy smokers.”

Heavy smokers indeed! This great infographic illustrates cigarette smoking around the world, and China is the leader by orders of magnitude, with 2,163,000,000,000 cigarettes consumed annually (the U.S. is at 331,000,000,000).

Hopefully now that cigars are fashionable, we’ll see the Chinese people wean themselves off the skinny nicotine sticks and get into some nice handmade premiums. Then again, the Chinese government will probably just come up with a massive tobacco tax and ban public smoking. But for the time being, on the subject of freedom to smoke it’s another area where China leads the U.S.