From 2016 to 2022, the Global Vaping Market Will Grow at 25% (Illustrated)

Due to changes in lifestyles and consumer preferences, the vaping market is growing at a compound annual growth rate of 25%. In addition, the continued shift from smoking to vaping is also driving growth in the global vaping market. It is estimated that by the end of 2016, global e-cigarette sales will generate approximately $2.95 billion in revenue.

With growing attention on controlling smoking habits and seeking healthier alternatives, the vaping market is expanding rapidly. Rising consumer interest in quitting tobacco has increased demand for e-cigarettes. North America held the largest global market share in 2015, at about 30%. Growth in the North American market was driven mainly by the United States. In the U.S., about 2,750,000 people used e-cigarettes, with sales of approximately $520 million in 2015.

Transitioning from smoking to vaping: a key market driver

Changes in people’s lifestyles and the shift by smokers from smoking to vaping are among the main factors driving growth in the vaping market. In 2015, about 1.4 billion people smoked tobacco cigarettes, accounting for around 20% of the world’s total population. Meanwhile, about 12% of the world’s population used e-cigarettes in 2015, and that figure is expected to rise to 18% by 2025.

Healthier tobacco alternatives, freedom from various chronic diseases, and the absence of secondhand smoke have all helped drive global e-cigarette consumption. Vaping has grown rapidly because e-cigarettes do not produce smoke; instead, they produce harmless vapor. In order to protect the public from tobacco-related threats,

in 2016, the FDA announced an expansion of its regulatory scope to cover all tobacco products, including e-cigarettes and other electronic nicotine delivery systems. Due to the rapid rise in e-cigarette use, about 12% of students in the United States were using e-cigarettes. With so many students using e-cigarettes, the FDA has prohibited the sale of e-cigarettes to students.

R&D investment: a growth accelerator

Various e-cigarette manufacturers are investing heavily in research and development to create new vaping technologies and flavors. British American Tobacco (BAT) has invested more than $580 million over the past three years to develop innovative nicotine and tobacco products. In addition, Philip Morris has developed the IQOS product line and has invested about $2 billion over the past 10 years. Continued increases in R&D spending by major players in the vaping market to innovate new smoke-free products and healthier technologies have also promoted growth in the global vaping market.