Russia’s market is growing rapidly, driven by Chinese vaping products

Today’s news, April 11: According to foreign media reports today, the withdrawal of Western tobacco manufacturers and foreign e-cigarette brands that have gradually reduced their business in Russia due to the war in Ukraine has created an opportunity for the growth of Chinese e-cigarettes in Russia.

Because Russia’s tobacco industry relies heavily on the support and investment of foreign brands, the exit of international tobacco companies is expected to cause major shortages in the Russian tobacco market, which in turn will sharply increase the prices of tobacco products sold in Russia.

By the end of 2021, more than 5,000 stores in Russia were selling e-cigarettes, including over 1,100 in the Moscow region.

According to data from the platform DNA REALTY, by 2022 the number of tobacco shops in Russia had grown by at least 20%, with most profits coming from e-cigarette sales.

BAT has announced that it will exit the tobacco markets of Russia and Belarus in 2023. Philip Morris International (PMI) and its subsidiary Fimo International are also considering retaining their business in Russia, as Russia is PMI’s seventh-largest tobacco market.

Japan Tobacco has suspended investment in Russia, while Imperial Tobacco has transferred its Russian business to a local successor in Russia.

"In Russia, e-cigarettes have enormous potential as an alternative within the tobacco market, and e-cigarette users account for 6.8% of the total smoking population," the article said. "After the United States and Europe, Russia is the world’s third-largest importer of electronic nicotine delivery systems (ENDS)."

"China accounts for 90% of the global market. In 2021, China’s exports to Russia reached 82.5 billion rubles. This year, that figure may increase by 35% to 111 billion rubles."