Compatible with IQOS ILUMA cartridges, will Fasoul become an alternative to IQOS?

Compatible with IQOS ILUMA cartridges, will Fasoul become an alternative to IQOS?

Fasoul, a brand of heat-not-burn tobacco, has released a new device in Japan, Fasoul Q1, which can directly heat the cartridges in 360 degrees and is equipped with a display screen. What is the relationship between Fasoul and Geekvape? Where are its technical advantages reflected? Why are the products only sold in Japan?

Special statement:

 

This article is only for internal research and communication in the industry, and does not recommend any brands or products; minors are prohibited from accessing.

 

Recently, on the Japanese e-commerce platform Amazon, two people found a newly established heated tobacco brand claiming to be GEEK VAPE, which launched a heated tobacco device Fasoul Q1.

 

Based on information from multiple parties, Fasoul Q1 claims that it uses 3D hot air flow heating technology, which can "directly heat the cartridges in 360 degrees in all directions". The side of the device is equipped with a display screen. Its design is quite similar to that of GEEK BAR PULSE, with a square and rounded appearance and a display screen on the side.

Fasoul Q1 appearance | Source: prtimes

 

Compatible with IQOS ILUMA cartridges, featuring "one cigarette, two inhalations"

 

According to Amazon's product information, "This is the first product equipped with a full-screen LCD. Due to the difference between the internal heating used by IQOS ILUMA and the external heating of Fasoul, one cartridge can be used for two inhalations."

Product promotional materials | Source: Amazon Japan

 

Special note in the introduction: Fasoul Q1 is compatible with IQOS ILUMA's dedicated cartridges Terea Stick and Sentia Stick. But it also adds that the product has not been approved by Philip Morris Products SA, which developed the brand, and the product as a separate device does not include nicotine-containing cigarette sticks. In the purchase package recommended by Amazon Japan, it is sold together with the IQOS ILUMA device.

 

It is worth noting that Fasoul Q1 adopts a similar design concept as the GEEK BAR PULSE sold in the US market, with a square and rounded appearance and a side display. When comparing the two devices with screens, it can be found that the display screen and the arrangement of displayed information are very similar.

Product comparison chart | Source: Product official website

 

This product, which looks like GEEK BAR PULSE, is already the brand's second heated tobacco device product.

 

In September 2023, the brand released its first product, Fasoul C1, in Japan. In the press release, it stated that "Fasoul C1 will be a compatible product of IQOS ILUMA. It is not an IQOS brand product and may feel different from the original."

 

The two products have different appearance designs, but both have the same selling point: "You can use the cartridge twice."

Fasoul C1｜Image source: prtimes

 

From the product reviews on the Amazon platform, Fasoul has become a "shadow" or "substitute" for the IQOS ILUMA device. Users can heat the cartridges inside the IQOS ILUMA and reuse them through the external heating of Fasoul, thereby saving costs and extending the use time of the cartridges. Of course, this also means that users can also directly use Fasoul to heat the cartridges without having to buy the more expensive IQOS device.

Product evaluation (translated by Google)｜Source: prtimes

Judging from the current market situation, Fasoul still has many direct competitors. On Amazon Japan, similar IQOS-derived auxiliary devices are included in the scope of small home appliances. If you search with the keyword "イルマInterchangeable Products", you will find similar The products are all marketed as "compatible with IQOS cigarette cartridges", and the prices of these products are cheaper than the official equipment of Philip Morris International.

 

Taking IQOS ILUMA as a comparison, Fasoul Q1 is priced at 2,860 yen (approximately $18.58), while the former is priced at 6,980 yen (approximately $45.36). Looking purely at price, the price of Fasoul Q1 is less than half. In Japan, where heated tobacco products are popular, there are always consumers willing to pay for related substitutes in the market.

IQOS ILUMA price information | Source: prtimes

 

It is worth noting that the Fasoul brand uses "GEEK VAPE's newly developed heated tobacco" as a promotional point in the relevant introduction. What is the relationship between Fasoul and GEEK VAPE?

 

In response to this issue, the two supremes contacted an insider of Qisi Intelligent, a subsidiary of GEEK VAPE, who told the two supremes,

"In fact, Fasoul is not a brand of GEEK VAPE, and the two are in a cooperative relationship."

 

According to the insider, Qisi Intelligent is only involved in the OEM of the heated tobacco business, and does not directly participate in the brand's operations and other matters in the Japanese market.

 

"The advantage of bypassing the technical barriers of IQOS"

 

Geekna, which provides OEM services for Fasoul, has always released less information about its heated tobacco business.

 

Prior to this, the two supremes had a conversation with the head of overseas sales of the HC division of GIKENER at the Moscow e-cigarette exhibition. He divided GIKENER's overall business segments. His department is the third business department different from GEEK VAPE and GEEK BAR, and mainly studies the field of heat-not-burn products.

 

According to him, GIKENER's technical advantage in the field of heat-not-burn products is the use of "3D heating technology", which has the advantage of more uniform heating of the cartridges, resulting in a better burning taste. This technical advantage has enabled GIKENER to stand out in the fiercely competitive heat-not-burn product market and form a certain differentiated competition with IQOS, its main competitor in the market.

 

The person in charge said:

 

"IQOS has basically monopolized, and GIKENER is one of the few companies that can bypass barriers to produce equipment."

 

Regarding the specific technical details of the Fasoul Q1 product, the two supremes communicated with Yang Yangbin, the head of Fasoul's heating element.

 

He said that the main reason why Fasoul Q1 is similar to GEEK BAR PULSE in appearance is not design considerations, but to reduce costs. Using the same components as GEEK BAR PULSE, Fasoul Q1 can save a lot of costs during the production process, making the product more competitive in the market.

 

During the production process, as the output increases, the fixed costs are spread over more units of products, thereby reducing the average cost per unit of product. Therefore, with the increase in sales, the price of the product can be reduced and ultimately provided to customers at a lower price.

"GEEK BAR PULSE is a better product. We develop it on this basis. In the case of high demand, the supply chain will have lower procurement costs and can offer customers lower prices."

 

In addition, he also explained that Fasoul's technical line is also different from that of Philip Morris International. Yang Yangbin introduced that Philip Morris International's heated tobacco equipment uses electromagnetic induction heating, while Fasoul uses a circumferential heating technology solution, which has lower temperatures and more precise temperature control than electromagnetic induction heating in the Japanese market.

"Because the low temperature can reduce harmful substances, it can also improve the utilization rate of tobacco and user experience."

 

A more friendly market for heated tobacco products

 

Currently, Fasoul has opened accounts on social media platforms such as Instagram and Facebook, and has been updating them since June this year. Most of the content released is the product details and features of Fasoul C1 and Fasoul Q1.

Instagram | Source: Instagram

 

From the published content, Fasoul's marketing information is mainly aimed at the Japanese market, showing its attention to this market. This also reflects the particularity of the Japanese market.

 

Although disposable e-cigarette products are already of various types in the European and American markets, and new products continue to appear. However, in Japan, atomized e-cigarettes are not the mainstream of the market. Japan's "Pharmaceutical Affairs Law" stipulates that all e-cigarette liquids containing nicotine are classified as "drugs", and nicotine-containing inhalation devices (atomizers) are classified as "medical devices". Therefore, any atomized products sold over the counter must be completely nicotine-free.

 

Even large companies such as British American Tobacco sell atomized e-cigarettes in Japan that are 0 nicotine products. For example, in December last year, British American Tobacco Japan launched the zero-nicotine atomizer Vuse Go 700 in Tokyo (Source: BAT). This type of product attracts users through rich flavors. Even if nicotine addiction cannot be generated, specific flavors have a certain addictive effect.

Vuse Go 700, nicotine-free version | Source: BAT

 

In contrast, the Japanese government has shown greater tolerance for heated tobacco products.

 

According to the article "Smoking Regulation in Japan: From Etiquette to Rules" published by Cambridge University Press, Philip Morris International's lobbying led officials to formulate different regulations for heated tobacco products, arguing that these products are "harm-reducing" and "smoke-free" and more socially acceptable.

 

An official from Japan's Ministry of Health, Labor and Welfare defended the different regulations for traditional cigarettes and heated tobacco products, saying that "for heated tobacco products, ... there is still no clear scientific evidence that they are harmful to health."

 

In addition, heated tobacco products enjoy lower tax rates in Japan. Although tax rates have risen in recent years, the tax burden on heated tobacco products is still lower than that on traditional cigarettes. Currently, taxes on heated tobacco products are about 30% lower than those on combustible cigarettes.

 

Policies have paved the way for the development of heated tobacco. A report by market research firm imarcgroup predicts that the market size of heated tobacco products in Japan will reach US$18.6 billion in 2023. The market size is expected to reach US$46.2 billion by 2032, with a CAGR of 10.7% during 2024-2032.

 

IQOS products account for 70% of the market share

 

When checking the products on Amazon Japan, IQOS, the best-selling heated tobacco device, almost topped the list. The driving force for purchase came from Philip Morris International's investment in the Japanese market over the years.

 

IQOS products have entered the Japanese market for 10 years. The initial market user cultivation started with Philip Morris International's products. In November 2014, Philip Morris International launched IQOS heated tobacco products for the first time in Nagoya, Japan.

Philip Morris International launched its first IQOS heated tobacco product IQOS 2.2 in Nagoya, Japan | Source: IQOS

 

According to a report released by Philip Morris International, the number of IQOS users in Japan has now reached 8.5 million, accounting for about 30% of the 28.5 million users worldwide. Heated tobacco devices including IQOS, Ploom, and Glo have completely changed the tobacco market in Japan.

 

According to data released by Philip Morris International at the CAGNY conference in February 2024, heated tobacco products accounted for 37.9% of all tobacco sales in Japan in 2023. In January 2023, sales of heated tobacco products exceeded cigarette sales in Tokyo for the first time, accounting for 50.4% of consumer sales.

This year, Philip Morris International first launched the latest heated tobacco device IQOS ILUMA i in Japan｜Source: PMI

 

PMI said that by 2023, IQOS will continue to dominate the Japanese heat-not-burn product (HTP) market, with a 70.5% share. A survey commissioned by research firm Statista showed that:

 

IQOS ILUMA was the most popular HTP in Japan from July to August 2023, with more than 21.1% of respondents using the product;

 

IQOS ILUMA One was the second most popular heated product, with a 20.7% share of respondents;

 

Followed by JT's Ploom X, with a 19.4% share, and British American Tobacco's Glo Hyper+, with a 12.9% share.

 

Although Fasoul is naturally unable to compete with these international tobacco companies at present, it can gradually erode part of the market, and its relatively low price and unique technology can also attract some consumers, especially those who focus on cost-effectiveness and reuse.

 

It will take time to test how the heated tobacco market will develop in the future and whether Fasoul can gain a foothold in the competition with strong rivals such as IQOS.