Every smoke cloud has a silver lining

Chinese connoisseurs are sparking a boom in imported Cuban cigars with trendy lounges and bars springing up in major cities here

Man making cigars at Cuba Tobacco Cigar Co on a Friday afternoon in Little Havana, Miami, Florida, Apr 10, 2015. [Photo/IC]

The first thing you notice when you enter the Cigar Ambassador Club in the trendy The Place mall in central Beijing is the strong tobacco aroma that impregnates the room.

Amid a cloud of light smoke, Vincent Chen, a diamond trader in his 30s from Beijing, is holding a chunky Partagas cigar between his fingers.

Chen, who looks younger than the traditional image of a cigar smoker, sits with two of his friends, relaxing and having a good time.

"I like smoking imported cigars because I enjoy the taste and it is a good way to socialize with friends," he said. "It also relaxes me and keeps my mind from drifting to other mundane things."

When he talks about cigars, Chen's face lights up and he is obviously an aficionado. He has his own favorite brands, such as Partagas and Bolivar, and appreciates the craftsmanship that goes into making one of Cuba's finest.

But then, he is the perfect example of China's new imported cigar consumer. He is young, well-off and regards his pastime as a pleasure not as a luxury event.

In the past, cigars used to be a niche product, popular among older smokers with higher purchasing power. But as the country undergoes a transformation, cigars are starting to appeal to a wider range of consumers, including young businessmen.

The number of cigar bars opening in China's most affluent cities, such as Beijing and Shanghai, is rapidly increasing. This reflects the growing taste for imported, exotic Cuban brands among China's burgeoning middle class.

Even the new crack down on smoking is unlikely to affect the upmarket cigar lounges. "I do not expect the indoor smoking ban to have a negative impact on these bars," Mo Dike, store manager at the Cigar Ambassador Club, said. "It could even benefit us."

Foreign cigars dominate the high-end market, with Cuban brands being the No 1 choice.

The Caribbean island's tobacco group Habanos SA, which controls the country's cigar industry, started selling its products in China in 2000. But since its first incursion here, the market has experienced rapid growth, fueled by younger customers.

Last year, Habanos exported 300,000 units of cigars to China, which excluded duty free numbers. This was a 9 percent rise on 2013.

China represents the company's third-largest market after Spain and France, and there is still enormous growth potential here. Overall, Habanos generated global sales of $439 million in 2014.

According to the London-based intelligence market firm Euromonitor InternationaI Ltd, the global cigar market was estimated at $24.8 billion last year. Euromonitor expects that figure to increase by 5.76 percent to $26.31 billion this year.