ByAlex Kendell

Heated tobacco products crossed a major threshold in Japan in December 2025. Philip Morris International (PMI) reported in February that the overall heated tobacco categoryexceeded 50 percent of national nicotine offtake in December 2025. Heated tobacco had also passed the halfway mark in 19 of Japan’s 20 major cities and 16 prefectures.IQOSheld close to 70 percent of heated tobacco category volume, according to PMI.

The shift has been rapid. BAT saysheated products accounted for 44 percent of Japan’s tobacco market by 2023, while domestic cigarette sales fell by approximately one-third between 2018 and 2023. BAT introduced glo in 2016.

Japan Tobacco (JT) is gaining ground with Ploom. The company saysPloom’s share of Japan’s heated products category reached 15.7 percentin the fourth quarter of 2025, up from 12.5 percent a year earlier. Ploom sales volume in Japan increased 35 percent during 2025. JTlaunched its Ploom AURA device and EVO heated tobacco sticks nationallyin July 2025.

The numbers require some qualification.Tobacco Reporter reported on Oct. 5that heated tobacco and other noncombustible products had overtaken cigarettes in sales during 2025, citing Japanese business publication Toyo Keizai. ButTobacco Institute of Japan data published by Health-Netshow 73.4 billion heated tobacco sticks sold during fiscal 2025, compared with 78.2 billion cigarettes. Heated tobacco stick volume was therefore about 94 percent of cigarette volume, although those figures do not include other noncombustible nicotine products.

Whatever measure is used, the direction is unmistakable. JT reported thatreduced-risk products accounted for 52.1 percent of Japanese tobacco industry volumeon a shipment basis in the first quarter of 2026. PMI reported the heated tobacco category itself atabout 53 percent of national nicotine offtakeduring the same period.

Japan is alsochanging how heated tobacco is taxed. The Ministry of Finance began a two-stage revision on April 1 that changes how heated products are converted into cigarette equivalents for tax purposes. The second stage took effect on Oct. 1, with the stated goal of eliminating the tax-burden difference between heated tobacco and cigarettes. Further tobacco tax increases are scheduled for 2027, 2028, and 2029.

The competitive battle is already spreading beyond heated tobacco. PMI beganexpanding sales of ZYN oral tobacco pouches in Tokyoin May, while JT isselling Nordic Spirit pouches in Japan. For tobacco companies, Japan increasingly looks like a preview of a market in which cigarettes are no longer automatically the dominant nicotine product.