The continuously shrinking tobacco market, stringent anti-tobacco regulations, increased taxation, ban on advertisements and branding, and increasing restrictions on public smoking have contributed to driving leading cigarette manufacturers to develop Next Generation Products like the e-cigarette.
An e-cigarette is a battery-operated device that emits a vaporized solution to inhale. The e-cigarette is usually comprised of four parts a heating element (atomizer), a power source (battery), a mouthpiece (inhaler), and a cartridge that holds the e-liquid (commonly referred to as vape juice) containing varying strengths of nicotine flavorings and base solutions like glycerin and glycol. During the vaping process, the e-liquid s usually heated and converted into vapor which is then inhaled, delivering nicotine to the user’s respiratory system. Since the introduction of the e-cigarette, the industry has evolved throughout the years, creating more efficient products attracting a large number of consumers.
By 2019, the global e-cigarette and vape market size was valued at USD 12.41 billion and s expected to reach USD 67.31 billion by 2027 expanding at a revenue-based compound annual growth rate (CAGR) of 23.8%. The increasing popularity and growth of its market are fueled by the fact it provides a similar experience to tobacco smoking without all the toxic components found in tobacco smoke. Furthermore, the availability of a wide array of e-cigarette options s contributing to the surge in demand, especially among millennials, and contributing to the global growth of the e-cigarette and vape market.
The industry’s Dynamics
Market Drivers
Declining Consumption of Cigarettes
Traditional cigarettes are terrifyingly hazardous to our health. On average each year smoking tobacco kills about 8 million people worldwide making it the second-largest reason for mortality after high blood pressure. Furthermore, it can be attributed to the significant increase of respiratory disorder cases worldwide. This knowledge is driving old and new smokers to consider e-cigarettes as a healthier alternative to the traditional cigarette. The fact that more people are concerned about the adverse effect smoking has on their health is driving the increasing demand for e-cigarettes worldwide.
Moreover, the perception that e-cigarettes are a therapeutic instrument to help those wishing to quit smoking s motivating the surge in demand.
The wide array of e-cigarette Options
There are thousands of e-cigarette devices of various sizes and shapes and e-juices available in the market currently. Not forgetting that companies are always introducing new flavors and additives that are easily customizable to suit the consumers’ needs. These factors are key n accelerating the growth of the e-cigarette industry.
Adoption of Mergers and Acquisitions industries
Leading manufacturers are acquiring or entering into mergers with domestic vendors, and working together to develop better more innovative products to target a wider customer base. These mergers and acquisitions are expected to introduce a large range of flavors and additives that will accelerate the market growth.
Challenges
Increasing government rules and regulations in countries like the USA, India, and Germany is one of the main hurdles the industry is facing when it comes to its growth. This coupled with the tough trading laws e-cigarettes are facing is contributing to a drop in sales. This is restraining the market growth f the industry.
Market Segmentation
Currently, the global e-cigarette market is segmented based on product type, flavor distribution channel, and region.
Insight based on Product Type
Based on product type, the industry is broken up into:
- Modular E-Cigarette
- Rechargeable E-Cigarette
- Disposable E-cigarette
In 2020 the rechargeable e-cigarette held the largest market size because they have a long lifespan at affordable prices. However, it seems things may change in the future with modular devices projected to grow at a faster CAGR likely due to the various customization options the devices offer their users.
Insight based on Flavor
Based on flavor, the industry is broken down into the following categories:
- Tobacco
- Botanical
- Fruit
- Sweet
- Beverage
The tobacco flavor held the largest market share in 2020, likely because the flavor offers a similar taste to that of traditional cigarettes. However as more of the younger generation picks up vaping, the fruit flavor is forecasted to grow at a faster CAGR. The fruit flavor has hundreds of variety that is appealing to the younger generation. This will drive the increase in demand for this flavor.
Based on Distribution Channels
When it comes to distribution channels, the industry is categorized into:
- Online
- Supermarkets/hypermarkets
- Specialist E-Cigarette Shops/vape shops
- Tobacconist
- Others
While traditionally, e-cigarettes were mainly distributed through specialist e-cigarette shops/vape shops, as it offered users an opportunity to try out new flavors and consult the vendors easily. The onset of the pandemic and easy availability of a wide range of products online stores has driven consumers towards e-shops. This trend is likely to go on in the coming years.
Insight Based on Region
Based on region, the industry is broken up into the following categories:
- Asia Pacific
- Europe
- North America
- Middle East and Africa
- Latin America
Currently, North America dominates the market largely due to the continuous product innovation, and adoption by the younger population. The Europe market also shows a great number of promise and is establishing itself as one of the most prominent e-cigarette markets globally.
Key Market Players
The e-cigarette industry is a highly competitive marketplace with the key players constantly competing trying to one-up each other in terms of price and quality. The key players include:
- Philip Morris International Inc.
- Altria Group Inc.
- British American Tobacco PLC
- Japan Tobacco, Inc.
- Imperial Brands
- International Vapor Group
- NJOY LLC.
- JUUL Labs, Inc.
With its current performance globally and the changing trends as outlined in the current vape news, the e-cigarette is a stable market that shows a lot of promise for the future.
