The vaping industry has seen a huge boom in business in the last few years, especially since Juul hit the market back in summer 2017. With an increasing shift away from conventional cigarettes towards tobacco alternatives, the vaping industry is projected to have a compound annual growth rate of 19.6% between 2018 and 2023. The result will mean a global projected market value of $45bn USD. But where is the growth coming from?
High Street vs. Online:
With an increasing focus on online sales for many industries, the same cannot be said for vaping. Due to the nature of vaping itself, high street stores are key in driving revenue. Conventional cigarettes limit users to tobacco or menthol. E-cigarettes on the other hand have different models, a wide range of e-liquid flavours and strengths. What this means is that consumers engage more directly with the product. When they’re looking at their first kit, there’s more to consider. While online sales are unarguably hugely profitable, bricks and mortar stores on the high street are massive opportunity for those invested in the e-cigarette industry. Many consumers perceive more of a personal benefit when it comes to an in-person consultation. The option to buy online is always there, but the high street holds a lot of value for this sector.
Areas of Growth:
Innovation is a huge part of the vaping industry’s success. With the amount of ongoing research, new product variations and advancements in technology, e-cigarettes have changed significantly since their inception back in 2003. Juul alone is worth an estimated $16bn and currently carries just one device with the corresponding pods. There are thousands of manufacturers the world over catering to the increased demand for device type and e-liquid flavours.
While growth is anticipated across the board of all device types, advanced mods are predicted to see the biggest growth of 22% compound annual growth rate. Advanced mods, both regulated and mechanical, carry more options for customisation. As such, vaping hobbyists looking to enhance their experience are more likely to spend money on-going than those buying starter kits for the sake of smoking cessation.
Consumers:
With increased awareness and concern over the ill effects of smoking, consumption of tobacco has decreased and safer alternatives have gained traction and popularity very rapidly. The success rate of quitting with more conventional methods like patches or gum is significantly lower than that of vaping. A quit attempt with vaping has a 30% success rate, significantly higher than the 4-5% success rate when utilising other methods.
The reason many consumers enjoy vaping is it offers a similar experience of inhaling and exhaling to get a nicotine fix. They’re also more aware of the ingredients and chemicals in both vaping and smoking. With e-liquids containing only four ingredients, including nicotine, there are significantly less than the 4000+ in cigarettes, many of which are carcinogenic. They’re also more receptive to the options vaping carries including different devices and flavours.
The USA vs. the UK:
With regulations in the US coming from local governing bodies and the FDA, there are some limitations on the industry that aren’t an issue in the UK. The likes of the Florida flavour ban, effective January 2019, concerns over teen “Juuling” and vaping being classified as smoking has meant e-cig users in America face more limitations.
The UK have taken to vaping at an incredibly rapid rate. With the likes of the NHS (National Health Service) and PHE (Public Health England) both supporting vaping as a means of quitting smoking, there are now more vapers than smokers in the UK. Despite TPD regulations limiting things like tank size and nicotine strength, the UK vaping market both online and in the high street is booming.
