Hongtashan - A Leading Cigarette Brand Striving to Reach New High

2012-02-07

In many cigarette retail shops anywhere in China, Hongtashan is definite a master brand that is well deserved, and makes itself a leading cigarette brand for the many cigarette consumers. A cigarette retailer in the capital city of Beijing who would only give his surname of Liu said that the best-selling cigarette brand at his shop is just Hongtashan, and that as a time-honored cigarette brand, Hongtashan is of a high quality, is of stable supply and is always a favorite for customers.

THREE MILLION CASES - A DREAM BECOMES A REALITY

At the end of 1958, the first packet of Hongtashan was born. Hongtashan is actually named after an ancient red tower (pronounced "hongta" in Chinese) situated on a hill (pronounced "shan" in Chinese) in the eastern part of Yuxi (which literarily means "The Jade Stream" in Chinese) City in southwest China's Yunnan Province - home to Hongta Group, which is a leading Chinese tobacco manufacturer. Built in the Yuan Dynasty (1271-1368), Hongta was little known to the outside world. But merely several years later, Hongta became well known across China after the cigarette brand of Hongtashan virtually created a "Hongtashan phenomenon" in China. In the 1990s, the annual output of Hongtashan reached 896,000 cases (44.8 billion cigarettes) at a prime time - an extraordinarily high output which was virtually unmatchable by any other cigarette brand in China. However, in ensuing several years, as a result of various reasons, the annual output of Hongtashan dropped sharply. Recalling the painful experience, Hongta Group changed its business development strategy in a timely manner, embarking upon a path of reviving Hongtashan as a returning master brand. In a period of nine years from 2002 to 2011, Hongtashan rose in adversity and saw its annual output climbing year-on-year. In 2009, the annual output of Hongtashan topped 2 million cases (100 billion cigarettes). In 2010, Hongtashan became the biggest Chinese cigarette brand in terms of both the annual output and the annual sales volume.

Through development over the past more than half a century, Hongtashan has formed series of leading competitive cigarette products including the Classic Series and the International Series. Around the October 1 National Day in 2010, Hongta Group presented to the market the first member of the Celebration Series of Hongtashan - Hongtashan (Gonghexinxi). (Gonghexinxi literally means "A Happy New Year" in Chinese). As far as the structure of cigarette products of Hongtashan is concerned, the Hongtashan brand family has basically covered the markets of Grade One, Grade Two and Grade Three cigarettes, with Grade Three cigarettes playing a leading role. Presently, the prices of Grade Three cigarettes of Hongtashan range between 50 yuan to 500 yuan (11.1 U.S. dollars to 79.36 U.S. dollars) per carton, with the leading sales prices ranging between 70 yuan and 100 yuan (11.1 U.S. dollars and 15.87 U.S. dollars) per carton.

The year 2011 was the first year of the 2011-2015 five-year period. In this year, the annual output of Hongtashan topped 3 million cases (150 billion cigarettes) - a hard-earned great achievement that deserved to be congratulated.

FINE PERFORMANCE OF BOTH OLD AND NEW PRODUCTS

In early 2011, Hongta Group announced that it would further develop high-grade specifications of Hongtashan brand cigarettes priced at 100 yuan (16 U.S. dollars) per packet and higher, and would particularly step up efforts to develop markets of new Grade Two cigarette products, in striving to strengthen the leading status of Hongtashan in markets of medium- and high-grade cigarette products. In this endeavor, Hongta Group has adhered to the policy of attaching equal importance to the development of three series of Classic, International and Celebration, and has kept improving and enriching the structure of its two leading cigarette brand families, with priority given to developing reduced-harm cigarettes with a lower content of tar and also high-end cigarettes, and with efforts to support structural improvement and expansion of the scope. Under such a policy, Hongta Group in 2011 mainly focused its energy on developing new products and presenting them to the market through intensive and meticulous efforts, with development of Celebration and cigarettes with a lower content of tar being two highlights of business development by Hongta Group in the year.

In 2011, Hongta Group launched a drive to promote the sales of Hongtashan (Gonghexinxi). As a result, Hongtashan (Gonghexinxi) has emerged as a new favorite on celebrative occasions, which has in turn contributed to increasing the influence of Hongtashan brand cigarettes on celebrative events. Moreover, the successful retail of Hongtashan (Gonghexinxi) at a price of 135 yuan (21.4 U.S. dollars) per carton has enabled the influence of the Hongtashan brand family to further extend to the core price range of markets of Grade Two cigarettes from the leading price range of 70 yuan 70 yuan to 100 yuan (11.1 U.S. dollars to 16 U.S. dollars) per carton for mainstream consumption by the general public, contributing to increasing the value of the image of the Hongtashan brand family.

At the end of 2009, Hongta Group presented to the market Hongtashan (International 100), which is yet another new cigarette product of Hongtashan brand intended for markets of low-tar-level cigarettes. It is also one of the representative products of the International series of Hongtashan. With a retail price of 100 yuan (15.87 U.S. dollars) per carton, Hongtashan (International 100) has a tar level of 7mg/per cigarette. The individualized style of simplicity and persistent progressiveness of Hongtashan (International 100) is favored by young fashionistas. In 2010, the annual sales volume of Hongtashan (International 100) topped 10,000 cases (500 million cigarettes). In 2011, the market performance of Hongtashan (International 100) became even more robust: In the first four months, the sales volume of Hongtashan (International 100) outdid the annual sales volume in the whole of 2010, with its competitiveness turning increasingly obvious.

According to the business development planning of Hongta Group, the annual sales volume of Hongtashan will have topped 5 million cases (250 billion cigarettes) by the year 2015, with the annual amount of commercial sales income expected to reach 100 billion yuan (15.87 billion U.S. dollars). The annual output of 3 million cases (150 billion cigarettes) is but a footprint of Hongtashan on its path to greater success. On the basis of this new start point, Hongtashan will usher in a brand new stage of development. Enditem