GCC Tobacco Market

Market Overview: 

The GCC tobacco market size reached USD 6.9 Billion in 2024. The market is projected to reach USD 10.3 Billion by 2033, exhibiting a growth rate (CAGR) of 4.1% during 2025-2033. The widespread prevalence of shisha or hookah smoking across social gatherings and recreational spots, continuous advances in product innovation, and the introduction of novel tobacco and nicotine products across the region represents some of the key factors driving the market.

Tobacco refers to an agricultural product that is derived from the leaves of plants in the Nicotiana genus, a member of the Solanaceae family. Traditionally, the leaves are dried and fermented to be used for smoking, chewing, or as snuff. It contains nicotine, a powerful stimulant, and has been used as a recreational substance worldwide for centuries. In addition to this, it serves as a significant cash crop and a lucrative trade commodity. Its primary forms include cigarettes, cigars, pipe tobacco, and smokeless products like snuff and chewing tobacco. Moreover, it is also employed in several industries to manufacture products, such as nicotine replacement therapy (NRT) aids and e-cigarettes. Over the years, the transformation of tobacco usage from traditional smoking methods to alternative smoking accessories, including hookah and vaping devices, has expanded the scope of the tobacco industry. Now, it is a highly regulated and taxed sector, offering significant economic contributions worldwide, and the Gulf Cooperation Council (GCC) region is no exception.

GCC Tobacco Market Trends:

Expanding Premium Tobacco Segment

As disposable income continues to rise in the GCC region, there is a significant increase in the demand for premium tobacco products. Affluent consumers, having greater purchasing power, are seeking high-end cigars, premium pipe tobacco, and luxury cigarette brands, which are now more available in the market. This shift is encouraging retailers and manufacturers to expand the premium tobacco segment to attract a wealthier and more discerning user demographic. Premium tobacco products offer a distinct and luxurious experience for individuals willing to invest in quality, creating a profitable market for both established and emerging tobacco brands. This pattern is further supported by the ongoing economic expansion in the area, leading to increased wealth while fostering a cultural admiration for tobacco as a representation of status and sophistication.

Influence of Tourism and Expat Communities

The tobacco market is significantly influenced by tourism and the substantial expatriate communities in the GCC, shaping both its demand and product choices. The area draws in millions of visitors each year, with each individual contributing their own smoking habits and preferences, leading to varied local tobacco usage patterns. Tourists from diverse nations with distinct smoking traditions frequently influence the demand for particular tobacco items. Expat communities, frequently originating from countries with deep-rooted smoking habits, further influence the market by upholding their favored methods of tobacco use. As per the data released by the Public Authority for Civil Information (PACI), in 2024, Kuwait's population reached 4,987,826, with expatriates making up 68.6% of the total. Kuwaiti citizens numbered 1,567,983, while non-Kuwaitis totaled 3,419,843, mirroring the varied backgrounds of its inhabitants. Moreover, the tourism sector enhances the market with duty-free sales and tobacco products available at airports and hotel lounges, thereby propelling the market growth.

Growth of Duty-Free Market

The duty-free market in the GCC region plays a pivotal role in driving the demand for tobacco products, particularly in airports and major international travel hubs. Each year, millions of tourists pass through the region’s airports, contributing to the high demand for tobacco products due to their tax-free status and competitive pricing. Duty-free tobacco sales provide travelers with the opportunity to purchase items at significantly lower prices compared to retail outlets, making them an attractive option for both regional and international buyers. As the GCC continues to serve as a key travel destination and a major global transit hub, the duty-free market is becoming an integral component of the region's tobacco industry. This expansion in travel and the growing popularity of duty-free shopping are directly contributing to an increase in tobacco consumption. As a result, both local retailers and international tobacco companies are benefitting, as the duty-free market is driving the tobacco product sales.

GCC Tobacco Market Growth Drivers:

Changing User Preferences and Demographics

The tobacco market in the GCC is greatly impacted by changing user behaviors and the demographics of the region. A major factor behind this shift is the younger demographic, which is catalyzing the demand for a variety of tobacco products, including e-cigarettes and smokeless tobacco. These options are viewed as less damaging than conventional smoking and correspond with the increasing health-aware perspectives in the area. Moreover, in 2024, the Statistics Centre – Abu Dhabi (SCAD ) reported that 84% of the population is aged 15-64, with 3.4 million in the workforce. Over half (54%) are between 25-44 years old, and the median age is 33, indicating a youthful, productive demographic. This changing demographic is changing the market demand from traditional cigarette smoking to modern, more subtle methods of tobacco use, such as vaping.

Technological Innovations in Product Development

Tobacco companies are investing considerable resources into research activities to develop new alternatives that attract individuals and are viewed as less harmful than conventional smoking practices. Products like heated tobacco devices, e-cigarettes, and nicotine pouches are becoming more popular among people looking for substitutes to traditional cigarettes. These advancements provide a more subtle, cleaner, and frequently healthier alternative to conventional tobacco items, responding to increasing worries regarding health and well-being. Moreover, the emphasis on improving product efficiency, diversifying flavor options, and lessening harmful emissions are expanding the market by providing new consumption methods that address the growing demand for convenience and more subtle tobacco experiences. As these technological advancements become more accessible and widespread, they are bolstering the GCC tobacco market growth by attracting a larger user base seeking modern alternatives.

Increasing Role of Retail and Distribution Channels

Convenience stores, supermarkets, and dedicated tobacco shops are evolving into vital access points for tobacco items, improving availability for buyers throughout the region. In addition to conventional physical stores, digital platforms are becoming more popular, providing a diverse selection of tobacco and nicotine items with the extra ease of home delivery. The rise number of e-commerce channels are enabling buyers to access a wide variety of tobacco substitutes and high-end brands while experiencing convenient and private shopping opportunities. The transition to digital shopping is strengthening the market growth, with people progressively opting for online platforms to buy their tobacco. Additionally, the GCC e-commerce market is projected to hit USD 2,020.6 Billion by 2033, with a CAGR of 15.3% from 2025 to 2033, as reported by IMARC Group. This increase in digital sales is enhanced by strategic alliances between tobacco firms and retail chains, further broadening market access and boosting sales volume.

GCC Tobacco Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the GCC tobacco market report, along with forecasts at the regional and country levels for 2025-2033. Our report has categorized the market based on type.

Type Insights:

• Cigarettes
• Roll Your Own
• Cigars
• Cigarillos
• Smokeless Tobacco
• Others

The report has provided a detailed breakup and analysis of the market based on the type. This includes cigarettes, roll your own, cigars, cigarillos, smokeless tobacco, and others.

Country Insights:

• Saudi Arabia
• UAE
• Qatar
• Bahrain
• Kuwait
• Oman

The report has also provided a comprehensive analysis of all the major regional markets, which include Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, and Oman.

Competitive Landscape:

The report has also provided a comprehensive analysis of the competitive landscape in the GCC tobacco market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Latest News and Developments:

• In February 2025, Oliva Cigars celebrated its expansion into Saudi Arabia with the grand opening of Casa Cubana Cigar Lounge in Riyadh. The event featured a selection of Oliva cigars, including the award-winning Oliva Serie V Melanio. The company began selling its cigars in Saudi Arabia in November 2024, following strict packaging regulations.
• In October 2024, Gebr. Heinemann, alongside Jordanian duty-free Shops and Astra, obtained a duty-free agreement for 11,500 sq m of retail area at King Abdulaziz International Airport (KAIA) in Jeddah. The area concentrated on fragrances, beauty products, sweets, tobacco, and regional items. The expansion sought to improve retail options and address the increasing need for travel retail services in Saudi Arabia.
• In May 2024, Saudi Arabia’s Zakat, Tax, and Customs Authority (ZATCA) introduced new duty-free regulations for arrival lounges, allowing travelers to spend up to SAR 3,000 (approx. $800) on duty-free items. These purchases must be for personal use, with a 200-cigarette limit per passenger. This move was a part of the Kingdom’s broader efforts to enhance the travel retail sector and support its Vision 2030 goals.
• In April 2024, Oman implemented plain packaging for tobacco products, following Saudi Arabia as the second Arab country to do so. The regulation required only the brand and product name in standard color and font, in line with WHO guidelines.

GCC Tobacco Market Report Coverage:

Key Questions Answered in This Report:

• How has the GCC tobacco market performed so far and how will it perform in the coming years?
• What has been the impact of COVID-19 on the GCC tobacco market?
• What is the breakup of the GCC tobacco market on the basis of type?
• What are the various stages in the value chain of the GCC tobacco market?
• What are the key driving factors and challenges in the GCC tobacco market?
• What is the structure of the GCC tobacco market and who are the key players?
• What is the degree of competition in the GCC tobacco market?

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the GCC tobacco market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the GCC tobacco market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the GCC tobacco industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.