Summary: It is reported that the first clear battle among the three major tobacco giants for e-cigarette market share has centered on a nationwide convenience store chain as the key arena.
Introduction: It is reported that the three major tobacco giants are competing for market share in the e-cigarette market, with a national chain convenience store as the key battleground. Recently, Philip Morris USA's MarkTen e-cigarette brand has been sold at 7-11 convenience stores in North Carolina.
According to Chinese e-cigarette news, the three major tobacco giants are competing for market share in the e-cigarette market, with a national chain convenience store as the key battleground. Recently, Philip Morris USA's MarkTen e-cigarette brand has been sold at 7-11 convenience stores in North Carolina. Alongside it are products from Lorillard's blu, R.J. Reynolds' Vuse, and several smaller companies. Reynolds began a nationwide rollout of Vuse e-cigarettes in June, while blu has been sold in most convenience stores in the U.S. for over two years. Reynolds claims that Vuse has a leading market share in test markets in Colorado and Utah. Vuse is also sold at Triad's WilcoHess and Quality Mart stores, while MarkTen can be found at Circle K and Sheetz stores. Blu e-cigarettes are present in all these outlets. According to the National Association of Convenience Stores, the key to this competition is that convenience stores are the largest retail channel for e-cigarettes, accounting for 75% of all sales outlets in 2013, with sales of approximately $540 million. The total sales of e-cigarettes in 2013 amounted to $1.7 billion. Tobacco specialty stores, vending machines, and the internet also account for a significant portion of e-cigarette sales. According to the Smoke-Free Alternatives Trade Association, online stores accounted for 25% of e-cigarette sales in 2013. In contrast, 85% of traditional combustible cigarettes are purchased at convenience stores. Philip Morris USA spokesperson Brian May stated that MarkTen's expansion in the western U.S. began in June. "We will expand eastward in the summer and fall," May said. Reynolds American claims that Vuse is not only a game changer in the e-cigarette category but also in tobacco product consumption. The reason Reynolds officials are so confident in Vuse is due to technologies like digital microprocessors that provide "the perfect draw every time." The microprocessor, combined with memory chips, controls key elements from vapor delivery to battery management. Reynolds American is converting 70,000 square feet of its 1 million square foot Tobaccoville plant into a production area for Vuse products. Reynolds American also plans to create at least 200 new full-time jobs for Vuse products. The entire plan may take four years. Herzog predicts that Reynolds American will reach $4 billion in e-cigarette revenue by 2021, while traditional cigarette revenue will be $3.9 billion. E-cigarette revenue in 2013 was lower, with traditional cigarette revenue at $6.4 billion.
