E-cigarettes and vaping is one of the fastest growing global sectors, with a recent Research and Markets report estimating that by 2021, the global vaping market will be worth 32.11 billion USD. This level of growth is all the more impressive when we consider the fact that seven years ago, vaping and e-cigarettes were a fledgling industry, seen by many as a niche product that would quickly fade into obscurity.
Now, though, we’re living in a very different reality. Sales of e-cigarettes, both in America and abroad, have gone through the roof. In light of these enormous developments for the sector, there’s reason to believe that e-cigarettes and vaping are highly likely to remain one of the fastest and largest-growing business sectors in 2018. Here’s a closer look at how e-cigarettes look set to become a household name over the next 12 months.
Growth into the American Market
One of the key factors that has driven the growth of the vaping industry is its expansion into the American market. The growth rate of e-cigarettes and vaping products is largely due to its increasing popularity across the North American market and especially in the USA, according to a new report by Beige Market Intelligence.
This growth builds on e-cigarettes’ already established position in the British business market. In Britain, approximately 12 million adults currently smoke cigarettes and 2.6 million use vaping products. Of those 2.6 million, 700,000 have completely switched from traditional cigarettes to vaping, while 1.3 million regularly use both tobacco and vapour products.
Although the value of the traditional tobacco cigarette market remains much larger than that of the e-cigarette and vaping industry (weighing in at about 20 times larger), the e-cigarette market in the UK is still currently valued at $1.16bn (£913m) in 2015 but predicted its growth would reach $5.67bn (£4.46bn) by 2021. Additionally, the UK Vaping Industry Association (UKVIA) has stated that retail sales are worth around £600m, with the positive influence of public health bodies providing an important boost.
This trend has been replicated in the US. In June 2016, an in-depth report by Bloomberg found that the US e-cigarette market is now the largest in the world, with Americans buying more electronic cigarettes and other vaping products than anyone else on the planet. Plus, as more traditional Big Tobacco companies, which are predominantly American, make the move into the e-cigarette business, we can expect this trend to continue.
Driven largely young entrepreneurs
One of the most remarkable features of this notable growth of the e-cigarette sector is that it has been driven primarily by younger entrepreneurs, who have been able to predict and respond to the needs of customers.
Smart businessmen and women on either side of the Atlantic have quickly established themselves as experts in this trend. Whether it’s the owners of successful e-cigarette manufacturers, developers of a flourishing online business such as Electric Tobacconist, or managers of brick-and-mortar vape shops, many have not just capitalised on the vaping boom, but have contributed positively to it, too.
According to the 2015 Vape Shop Index, released by ECigIntelligence, Roebling Research, E-Cigarette Forum and the Smoke-Free Alternatives Trade Association (SFATA), U.S. brick-and-mortar vape shops generated annual non-online sales of more than $300,000 per store. The index also found that 69% of the vape shop business owners were independent single-store owners, while 16% owned two shops and 15% had three or more stores.
These findings overwhelmingly indicated that the trend that has already been observed in the UK: that the majority of these highly successful vape shops are owned by small, hard-working businesses that make enormous contributions to the economies of both countries.
Although it is impossible to know for certain the direction that the e-cigarette and vaping industry is going to go in 2018, we could hazard a guess that the combination of hard-working small businesses and demonstrated consumer interest in the sector are going to make for a powerful, successful combination.
Pascal Culverhouse is the Founder and Managing Director of The Electric Tobacconist USA, where vapers will find all the major American vaping and e-liquid brands with a price-match guarantee. Pascal started Electric Tobacconist Ltd in July 2013 to compliment his seasonal family business, and after proving so popular and successful, he left the family business and has found himself with a growing number of staff and seven-figure turnover.