E-Cigarette Market is expected to grow at a CAGR of 11.32% during the forecasting period 2021-2028.

Global e-cigarettes market is expected to reach USD  36,097.69 million in 2028, from its recorded value of USD   YY million in 2020, growing with a CAGR of 11.32% during the forecast period.

E-cigarettes are devices that operate by heating a liquid solution to a high enough temperature so that it produces an aerosol that is inhaled. Solutions, sometimes called e-liquids, almost always include nicotine, flavoring and a humectant, such as propylene glycol, to retain moisture and create the aerosol when heated.

The growing emphasis on adopting safer alternatives to smoking is anticipated to drive the adoption of e-cigarettes and vape devices over the forecast period. 

E-cigarettes use is highest in China, the US, and Europe, with China having the most e-cigarette users. The rise was thought to be due to advertising to young people; their low cost compared to tobacco; and the perception that e-cigarettes are safer than tobacco. 

The rising awareness about e-cigarettes being safer than traditional cigarettes, especially among the younger population, owing to various studies carried out by medical institutions and associations, is anticipated to further drive the market growth. Use of disposable e-cigarettes increased about 1,000% (from 2.4% to 26.5%) among high school e-cigarette users and more than 400% (from 3% to 15.2%) among middle school e-cigarette users during 2019-2020. 

In recent years, market players have emphasized increasing the awareness about e-cigarettes and vape devices, particularly among adult smokers. For instance, JUUL Labs, Inc. embarked upon a marketing campaign in January 2019 to educate adult smokers about the ill effects associated with traditional combustible cigarettes and encouraged them to avoid the same and switch to e-cigarettes and vape devices. Such marketing initiatives are anticipated to drive market growth over the forecast period.

Market Dynamics

Drivers

• Increased desire among consumers to quit smoking tobacco
• Heavy expenditure on advertising and promotion
• Low cost of e-cigarettes

Restraints

• Ban of e-cigarettes across various countries
• Unknown effects on health
• Increasing cases on vaping related illness 

Low cost of e-cigarettes

The low cost of e-cigarettes is another major factor driving their growth. E-cigarettes are cheaper than traditional cigarettes because they are not subject to tobacco taxes. The cost of tobacco products has been going up for years, and it’s still continuing to grow. Between 2000 and 2020, the average price for a pack of 20 cigarettes went from £3.67 up to £11.45. That’s a 212% increase, with the last 5 years alone accounting for 26% of that. 

Hence, it’s safe to say that vaping is much cheaper than smoking. It is around 93% cheaper than smoking 20 cigarettes a day, 88% cheaper than smoking 10 cigarettes a day, and 76% cheaper than smoking 5 cigarettes a day.

The wholesale price of a disposable e-cigarette is between $2.50 and $4, whereas a rechargeable e-cigarette costs between $6 and $15. In addition, according to Tobacco Vapor Electronic Cigarette Association (TVECA), the starter kit for e-cigarettes costs between $30 and $100, and the estimated cost of replacement cartridges is approximately $600, which is far less costly than the $1,000 that an average end-user spends on a pack-a-day tobacco-cigarette habit. 

Aside from the initial $40-$60 approximate setup cost, vaping costs much less than smoking. Twenty cigarettes per day can add up to $9,000 a year. Vaping can cost $900 a year. According to a survey, twenty-five per cent of Europeans reported using ECs because they were cheaper than regular cigarettes.

Geographical Analysis

South America e-cigarettes market valued USD 154.49 million in 2020 and is estimated to reach USD YY million by 2028, growing at a CAGR of 6.68% during the forecast period. In South America, vaping is either illegal or the laws are uncertain about e-cigarettes. For example, vaping is banned in major countries, like Argentina, Brazil and while there are no definite laws in countries, like Peru and Colombia. 

As enforcement of e-cigarette laws are often open to local authorities, vape shops are often found in places where they are technically illegal in the region. In the entire region only five regions where the sale of E cigarette is legal and allowed are Chile, Ecuador, Honduras, Paraguay, and Costa Rica.

The sale, importation and advertising of any kind of e-cigarette is forbidden in Brazil. The commercialization, importation and advertising of electronic cigarettes was prohibited by the Brazilian Health Regulatory Agency (ANVISA) in 2009, thus banning, at least legally, access to the devices inside the country. Despite this prohibition, the trade in vaporizers and their fluids, which contains nicotine, is easily achieved on the internet, informally.

Importation, distribution, sales and marketing of e-cigarettes are banned in Argentina since 2011, which should limit access to e-cigarettes for early adolescents.

Since the sales of e-cigarette is limited to just five Latin American countries, the distribution of these products are also limited by Chinese private companies such as Innokin Technology, and KangerTech. Therefore, considering this factor, this also creates an opportunity for major players to venture into these five Latin American countries, where its legal to sell e cigarettes.

Vaping is legal and treated much the same as smoking in Chile. In 2019, six percent of respondents in a Chilean survey declared consuming electronic cigarettes regularly.

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