2019 Vape Market Analysis: How Was China's Vape Market in 2019?

2019 Vape Market Analysis: How Was China's Vape Market in 2019?

As e-cigarette practitioners, what concerns us most is probably the development of the e-cigarette industry in 2019. For a long time, we have always categorized e-cigarette products by device type. With the rise of CBD e-liquids and IQOS devices abroad, there has been a significant change in the development trend of e-cigarette devices. In the past, cool big cloud boxes and finely crafted pens could attract fans; the flavor of traditional e-liquids seemed less important. However, with IQOS's strong impact on traditional tobacco and the extensive research on CBD e-liquids, hardware devices are undergoing tremendous changes. Therefore, we will mainly analyze the future development of the industry based on e-cigarettes as consumables.

1. IQOS Series Products
The first recommendation for heated non-combustion products is Philip Morris International's IQOS tobacco stick products, which aim to simulate the taste of traditional tobacco products to capture the market. PMI hopes to convert traditional tobacco consumers into IQOS enthusiasts; according to the latest industry analysis, 70% of IQOS users are not traditional tobacco users. The IQOS series devices possess strong consumer electronics attributes, with the heated non-combustion "iPhone" having a strong fashion and technological appeal. As a new type of tobacco product, PMI is seeking recognition from the FDA in the United States.

IQOS can be legally sold in the United States.

IQOS is a smoking method that is potentially lower risk than traditional smoking.

Currently, two applications have been submitted to the FDA in the United States, which is a huge market. According to Wells Fargo analyst Bonnie Herzog's forecast, the sales of e-cigarette products in the U.S. were $6.6 billion in 2018, and this is only 4% of the traditional tobacco market; IQOS presents a huge temptation for the remaining 84% of the conventional tobacco market.

Domestically, there are significant advantages in the supply chain. Although PMI has set up related patent barriers, domestic tobacco companies are gradually innovating in technology to attempt breakthroughs. The IQOS brand is expanding rapidly, available in 43 countries in Southeast Asia and Europe.

2. CBD E-Cigarette Related Market

So far, Uruguay and Canada have opened relevant markets; the export of related hardware devices is booming; currently, the shipment volume of accessory products and empty cartridges is enormous. Related hardware products have a certain level of technical content and entry difficulty, but with the current improvement of the e-cigarette supply chain in terms of hardware and plastic solutions, prices will gradually decrease and competition will intensify.
3. E-Cigarette Market

The e-cigarette market continues to renew its vitality; in fact, many brands have yet to effectively overcome the pain point of atomizer leakage. Currently, domestic traditional e-liquid manufacturers are thriving; compared to the competition and low profits of hardware products, the profits from e-liquids are evidently more attractive. The emergence of nicotine salt products provides many old smokers with a more authentic smoking experience. The small flat e-cigarettes with separated cartridges have achieved success in this round.

In the context of significant differences in financial calculations and profit ratios, the development of the e-cigarette industry is gradually shifting from functional development to focusing on consumables; e-cigarettes are at a turning point, and 2019 has opened the door for e-cigarette entrepreneurship and capital financing, leading to a new round of industry reshuffling and supply chain integration.