KT&G’s heated tobacco brand Lil continues to strengthen its leadership in South Korea while accelerating its international expansion through product innovation, technology development, and a diversified platform strategy. As competition in the smoke-free tobacco sector intensifies, the company is positioning Lil as a global brand capable of challenging established players beyond its home market.
According to figures cited by South Korean media outlet UpKorea, Lil captured 47.4% of South Korea’s heated tobacco market in the first quarter of 2026, an increase of 1.4 percentage points compared with the same period last year.
Lil Consolidates Its Leadership in South Korea
KT&G attributed Lil’s continued growth not only to the expansion of South Korea’s heated tobacco category but also to ongoing improvements in product performance, a broader product portfolio, and wider retail distribution.
The company first became the market leader in South Korea’s heated tobacco segment during the first quarter of 2022 and has maintained its leading position ever since.
South Korea remains one of the world’s most mature heated tobacco markets. Industry data shows that annual heated tobacco sales increased from 440 million packs in 2021 to 660 million packs in 2024, representing growth of approximately 50% over three years.
During the same period, overall tobacco sales declined, while heated tobacco products continued to gain popularity. By 2024, heated tobacco accounted for 18.4% of total tobacco sales in South Korea, highlighting the ongoing shift toward smoke-free alternatives.
Next Generation Products Become a Major Growth Driver
Lil’s success reflects the broader expansion of KT&G’s Next Generation Products (NGP) business.
According to company figures, NGP revenue reached KRW 890.1 billion (approximately US$650 million) in 2025, more than tripling from KRW 279.3 billion in 2020. Over the past five years, the segment has delivered an average annual growth rate of around 26%.
The importance of smoke-free products within KT&G’s business has also increased significantly. NGP products accounted for 20% of the company’s tobacco revenue in 2025, compared with 9% in 2020.
Revenue breakdown for the NGP business in 2025 included:
- Domestic sales: KRW 587.3 billion
- International sales: KRW 302.8 billion
KT&G said the NGP business has evolved from a complementary domestic business into one of the company’s primary long-term growth engines, supported by increasing international demand.
Multi-Platform Product Strategy
Rather than relying on a single device, KT&G has developed multiple product platforms designed to address different consumer preferences.
The current Lil portfolio includes:
- Lil Solid
- Lil Hybrid
- Lil Able
Each platform targets a different segment of the heated tobacco market, ranging from conventional heated tobacco systems to hybrid heating technologies and devices compatible with multiple consumable formats.
KT&G says it continues to refine device performance, charging speed, heating efficiency, and overall user experience to improve customer satisfaction and long-term retention.
The company’s latest device, Lil Able 3.0, launched in 2026 and has gradually expanded its availability through convenience stores across South Korea.
Technology and Intellectual Property Drive Competitiveness
KT&G views research and development as a key pillar of Lil’s long-term competitiveness.
Between 2022 and 2024, the company filed 4,694 patent applications related to next-generation tobacco products.
By the end of 2025, KT&G had accumulated 16,751 registered intellectual property rights, including 12,929 international patents, meaning overseas intellectual property accounts for approximately 77% of its total portfolio.
The company believes that as regulatory standards become increasingly complex across different markets, proprietary technology, product design, and intellectual property protection will become essential for expanding internationally.
Expanding Beyond South Korea
International expansion has become another major focus for the Lil brand.
KT&G reports that by 2026, Lil products had entered 34 international markets, reflecting the company’s growing global ambitions.
While South Korea represents one of the world’s most developed heated tobacco markets, KT&G believes many overseas markets remain at an earlier stage of adoption, creating significant long-term growth opportunities.
The company aims to leverage its domestic experience, technological capabilities, and international partnerships to strengthen its competitive position abroad.
Competing in a Market Led by IQOS
Despite its success in South Korea, KT&G faces strong competition internationally.
The global heated tobacco market continues to be led by IQOS, the flagship heated tobacco platform developed by Philip Morris International (PMI). Other major tobacco companies are also investing heavily in smoke-free product portfolios as consumer preferences evolve and regulatory environments continue to shift.
To differentiate itself, KT&G is focusing on continuous innovation across device technology, user experience, and platform diversification while expanding its international distribution network.
The Industry Is Shifting Toward Platform Competition
The heated tobacco industry is increasingly moving beyond competition based solely on individual devices.
Manufacturers are now competing across several strategic areas, including:
- Technology research and development
- Product ecosystem and platform diversity
- User experience
- Intellectual property
- Global distribution and market expansion
KT&G’s strategy reflects this broader industry transition, with Lil evolving from a successful domestic brand into a cornerstone of the company’s global smoke-free business.
Final Thoughts
Lil’s growing market share in South Korea and its accelerating international expansion illustrate KT&G’s broader ambition to become a significant global player in the heated tobacco sector. Backed by sustained investment in product development, intellectual property, and platform innovation, the company is positioning itself for long-term growth in an increasingly competitive smoke-free market.
As heated tobacco adoption continues to expand worldwide, future success is likely to depend not only on device sales but also on companies’ ability to build integrated product ecosystems, maintain technological leadership, navigate evolving regulatory frameworks, and establish strong global supply chains. These factors are expected to play an increasingly important role as competition in the next-generation tobacco industry continues to intensify.