According to Euromonitor, the global HNB market expanded from USD 16.2 billion in 2019 to nearly USD 40 billion in 2024, with early-stage explosive growth in 2020–2021 as core markets like Japan and South Korea achieved mass adoption.
2020–2021: Growth exceeded 30% annually, driven by technology upgrades and pandemic-induced demand.
2022 onward: Growth stabilized between 8–13%, signaling entry into a mature phase.
The HNB category now represents a stable transformation driver for the global tobacco industry, serving as both a harm-reduction product and a profitability anchor amid declining cigarette volumes.
The HNB market operates under a consumable-driven business model, similar to the “razor-and-blade” system.
Cartridges (heat sticks) maintained over 92% of total revenue from 2019–2024, rising to 93.8% in 2024.
Devices accounted for only 6.2%, serving as the entry point for user acquisition.
With user bases expanding in mature regions, cartridge volume and margin have become the core profit engines. Global leaders such as Philip Morris (IQOS), BAT (Glo), and KT&G (Lil) continue to focus on cartridge innovation, material optimization, and supply chain integration to enhance retention and lifetime value.
HNB hardware and cartridge sales both grew robustly but began decelerating after 2021:
Device shipments rose from 18 million units (2019) to 44 million (2024) — a CAGR of 16.5%.
The slowdown below 10% in 2024 was mainly due to market saturation, longer device life cycles, and macroeconomic pressure.
Cartridge sales increased from 72.7 billion sticks to 178.6 billion, with a CAGR of 16.3%.
Growth exceeded 29% in 2020–2021, then slowed to 10.4% in 2024 as consumption stabilized.
Despite moderating growth, the high-frequency nature of cartridge consumption continues to underpin recurring revenue and brand loyalty.
From 2019 to 2024, global HNB users expanded from 15.4 million to 36.7 million, more than doubling in size. However, annual user growth slowed from 30% to below 10%, marking a transition from explosive expansion to steady optimization.
This indicates that:
Core markets (Japan, South Korea, Italy, Russia) are approaching saturation.
Future growth will rely on emerging regions (e.g., Eastern Europe, MENA, Latin America) and continuous product innovation.
The heated tobacco industry has completed its transition from early innovation to structural maturity. With its unique blend of technological sophistication and reduced-risk positioning, HNB now anchors the future of the global tobacco transformation.
The next chapter will depend on regional diversification, flavor and format evolution, and evidence-based regulation — shaping a sustainable balance between innovation, compliance, and consumer well-being.
