E-Cigarettes Enter a New Wave of Growth in the US

In recent years, total e-cigarette sales in the United States have increased year by year. Brands such as Blu and Njoy have dominated the US e-cigarette market, and their market shares have continued to grow.

　　The US e-cigarette industry has been achieving double-digit annual growth, while traditional cigarette consumption has performed poorly. This has prompted major traditional tobacco companies to turn more of their attention to e-cigarettes. They have entered the e-cigarette market through acquisitions or in-house development.

　　In April 2012, Lorillard acquired the Blu e-cigarette brand for $135 million, helping it lead the e-cigarette market in 2013 with a 47% market share. In July 2013, Reynolds American also launched its Vuse e-cigarette brand.

　　In August 2013, Altria, the largest tobacco manufacturer in the United States, began testing sales of its MarkTen e-cigarette in Indiana, and expanded it to Arizona in September of the same year.

　　With Reynolds American and Lorillard announcing their merger, the US tobacco market is set to enter a new phase, and competition in the e-cigarette market will become even more intense.

　　In moving into the e-cigarette market, major tobacco companies have three key advantages: vast distribution networks, millions of customers, and strong financial resources.

　　In just four months, Reynolds American sold Vuse e-cigarettes in 1,800 retail stores across Colorado. This was largely because most consumers trying e-cigarettes were already traditional cigarette smokers, and the company could market directly to its 12 million tobacco customers in the United States.

　　In 2013, US e-cigarette revenue exceeded $1 billion, with some estimates placing it as high as $1.7 billion. These e-cigarette manufacturers are gradually capturing share in the $100 billion US tobacco market. According to Bloomberg, e-cigarette sales are expected to surpass traditional cigarettes by 2047.

　　Although the health effects of e-cigarettes remain to be determined, and the US Food and Drug Administration is set to regulate them, there are still no restrictions on smokers purchasing e-cigarettes.

　　On September 17, 2013, Andrew Bevelacqua, chief marketing officer of Njoy e-cigarettes, claimed that Njoy currently controlled 40% of the US e-cigarette market and had received $75 million in funding from PayPal co-founder Peter Thiel and former Facebook president Sean Parker.

　　V2 e-cigarettes have also developed rapidly, expanding their business into the European Union, Africa, and the Middle East. In the US domestic market, V2 also planned to expand into 35,000 stores.

　　Although related regulatory policies were about to be introduced, analysts still believed that the market share of e-cigarettes would continue to grow. Fitch predicted that the e-cigarette consumer market would grow by 40% to 50% in 2014, while Citibank estimated that the e-cigarette market would reach $3 billion by 2015.