Global Vaping Market Development in 2023 Through the Lens of Logistics Deployment

According to a comprehensive research report released by the think tank MRFR, the global smokeless tobacco market is expected to reach $28.98 billion by 2030. Currently, the mainstream markets for e-cigarettes are the United States, the United Kingdom, Europe, and Russia.

However, as competition in the e-cigarette market intensifies, leading distributors in the U.S. have stated in interviews that product selection is primarily based on “price.” The internal competition in the mainstream market is becoming increasingly fierce, and the cost of market expansion is rising. Therefore, brands are gradually shifting their market strategies towards expansion into emerging regions. Logistics and freight forwarding companies, as the key channels for e-cigarette products from manufacturers to end consumers, may see their regional layouts and route procurement trends become indicators of the development potential in emerging markets.

Recently, reporters interviewed several e-cigarette logistics and freight forwarding companies at the Dubai e-cigarette exhibition to gather the latest dynamics and information in the industry and understand the insights and experiences of logistics providers regarding the e-cigarette market.

In 2023, the U.S. and Europe remain important markets, with logistics companies operating with differentiated depth.

As an emerging industry, the initial freight forwarding for e-cigarettes relied on the mature transportation models of other products in the mainstream market. Therefore, many logistics companies stated during interviews that their first batch of e-cigarette freight forwarding was destined for the U.S., after which they officially launched their e-cigarette freight forwarding business centered around the U.S. market.

At the Dubai e-cigarette exhibition, when logistics providers were asked about their market development strategies for 2023, representatives from Haosutong, Tianteng International, and a leading logistics company that wished to remain anonymous all stated that they would continue to focus on the U.S. and European markets in 2023, deepening their existing business advantages.

Qian Liqun, co-founder of Haosutong Logistics, stated that their advantage in the U.S. and European markets lies in the operation of dedicated lines. “The primary market for Haosutong Logistics in e-cigarette transportation is the U.S.,” Qian said. To address issues such as long-distance transportation and lack of local advantages, they gradually developed dedicated line forms, which not only provided more comprehensive services but also promoted the maturity of e-cigarette logistics transportation. For future development, Haosutong ultimately aims to provide professional services in advantageous markets, offering end-to-end, vertically integrated services.

Meanwhile, a representative from Tianteng International stated that their main business model is “designated freight forwarding.” Designated freight forwarding primarily serves the recipient, focusing on the buyer's requirements, with relatively higher prices, and most clients are distributors and brand owners. Tianteng International plans to participate in a wide range of exhibitions in 2023, expanding beyond the mainstream markets of the U.S. and Southeast Asia to other markets that are also “emerging.”

Mainstream market challenges increase, with the Middle East market becoming a key target.

As global regulations on e-cigarettes tighten, the frequency and intensity of customs enforcement in mainstream markets have increased, posing greater challenges for logistics and freight forwarding. Both Haosutong Logistics and Tianteng International indicated during interviews that the current difficulty lies in customs inspections in various countries.

In the world's largest e-cigarette market, the U.S., inspections focus on whether products are taxed. Qian Liqun stated that the uncertainty brought by inspections and the resulting storage costs have become the biggest challenges in passing through U.S. customs. In the UK market, the main inspections focus on the number of puffs and prohibited items, requiring prior confirmation of risks with clients before transportation.

When asked about the business plans of logistics companies for emerging markets in 2023, Tianteng International stated that they are expanding into the South African market. The Middle East, leveraging the Dubai exhibition, is the most frequently mentioned term in emerging market expansion plans. Interviewed logistics providers expressed optimism about the development of the Middle East market. An anonymous logistics provider indicated that they have already established routes to Dubai, Saudi Arabia, and other regions.

Map of the Middle East Region

Qian Liqun believes that although their business scale in the Middle East is average, the development of the Middle East market is relatively easy. Especially with Dubai as a hub in the Middle East, it can radiate to the entire region, providing vast development space for logistics businesses. Therefore, they see considerable demand in the Middle East market and believe it is an attractive growth opportunity.

Qian Liqun stated that the e-cigarette logistics market in Dubai is already quite mature, but 80% of the market is occupied by gray channels.

Similarly, Tianteng International holds a similar view on the Middle East market. They believe that Dubai is the best choice for entering the Middle East market, but at the same time, Dubai, as a blue ocean market, needs to consider the openness of surrounding areas to effectively radiate to the entire Middle East region. However, if surrounding areas are not open, the Dubai market will still require further investigation and research.

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