based on taste profiles (e.g., nicotine strength and flavours), convenience, price, and the local regulatory environment. Because of these factors, adoption rates for different types of nicotine products vary across markets, and fully switching is not guaranteed, in technology, IQOs, over a decade ago, and the category has been highly successful in the market, with heated tobacco penetration approaching almost 50%. We believe the in Japan, which is unlikely to be replicated to the same extent in another large market. 1. Japan has light/low tar cigarettes at around 3mg, which compares to the the ceiling in the EU of 10mg and cigarettes in the US at c17mg. As we illustrate in the nicotine yield), which is partly due to heated tobacco products' nicotine/flavour delivery being relatively less effective than traditional cigarettes, in our view. The main reason, selected by 53% of dual-users (that could select multiple reasons), experience of cigarettes', followed by almost 40% selecting 'it did not provide the 2. Nicotine containing vapour liquid/products are essentially banned in Japan, as nicotine is classified as a medicinal product. This means heated tobacco products were the only alternative nicotine option for smokers, in our view. 3. Smoking outdoors on public streets is generally prohibited. According to our survey, the key reason influencing use of heated tobacco products was consumers' "consideration of others"; selected by almost 60% of users (that paeay buisn asnenaq ueder ui suenalan s! sui (suoseal aldnu palas pino tobacco/smoking outdoors on public streets is generally prohibited, but was largely premitted in many indoor venues until the Health Promotion Act 2020. 4. Flavours have played a significant role, with our survey highlighting, for 56% of users, flavoured heated tobacco sticks account for at least half their consumption. Flavours (ranging from mint to banana) can enhance palatability/ taste; are relatively more appealing, and there is a cultural phenomenon due to an appreciation for seasonality in Japan, in our view. communicate on packages and include inserts; advertise devices without health warnings, and consumables can be advertised in places aimed at adults (aged