The e-cigarette market is expected to grow at a 19.41% CAGR during the forecast period, with North America dominating in 2022 owing to rising awareness about e-cigarettes being safer than traditional cigarettes, especially among the younger population.

E-cigarettes usually include electronic circuitry and a power source supplying energy to the heating mechanism. They produce vapour by heating, which sets them apart from regular tobacco-based cigarettes that involve burning. Non-tobacco nicotine-containing liquid is most commonly used to produce vapour. The rising awareness about e-cigarettes being safer than traditional cigarettes, especially among the younger population, is anticipated to further drive the market growth due to various studies carried out by medical institutions and associations. The array of customization features such as temperature control and nicotine concentrations offered by the vendors is expected to aid the product demand. Moreover, developing e-cigarette technologies such as pod systems and squonk mods have increased popularity in recent years and user adoption.

According to the report titled, “Global E-Cigarette Market Outlook, 2027”, published by Actual Market research, the market was valued at more than USD 24.82 in 2022 and it is anticipated to grow with a CAGR of more than 19.26% from 2023 to 2028, reaching USD 69.6 Billion. The willingness of people to quit traditional tobacco-based cigarettes and their perception of the e-cigarettes as a safer way than tobacco-based cigarettes is leading to the increase in the demand for e-cigarettes in the whole world. In the product segment, the e-cigarette market has been divided into Modular E-Cigarette, Rechargeable E-Cigarette, Next-Generation E-Cigarette, Disposable E-Cigarette and Others. The Modular E-cigarette looks the same as a traditional cigarette, which has the largest share in the e-cigarette market, i.e. at more than 45%. As this e-cigarette, can be refilled and it also allows the user to regulate the power which is delivered from the system’s battery to an atomizer.
The flavor types which are considered in the e-cigarette market are Tobacco, Botanical, Fruit, Sweet, Beverage and Others. Tobacco flavor is dominating the market of e-cigarettes with more than 25% market share currently. Tobacco flavor enhances the taste and also lowers the effects of tobacco products, which makes the flavor more popular and accessible to the new customers of e-cigarettes. Tobacco flavor gives the same tobacco essence as it gets when burnt and smoke from a traditional tobacco-based cigarettes.

The regions which are considered in the e-cigarette market are North America, Europe, Asia Pacific, South America and Middle East & Africa. North America is the region which is dominating the e-cigarette market with a market share of more than half of the market. As the number of youth is growing the demand of the product is also increasing, as the youth are the major consumer group of e-cigarette. The Asia Pacific region is the fastest growing region in the e-cigarette market in the forecasted period.

The penetration of e-cigarettes in North America is incredibly high owing to rising popularity of e-cigarettes among the youth population, rapid expansion of vape shops and the prevalence of online retail. The usage of e-cigarettes among youth and young adults in the region is rising at an alarming rate owing to the availability of a vast selection of brands and flavours on online stores. They find e-cigarettes trendy and are attracted by the various aspects such as, compact designs which offer concealability, availability of a large assortment of flavours, and the flavoured/odorless aerosol exhaled which make it hard to detect. One of the popular brands among the demographic is JUUL, a brand of e-cigarette that is shaped like a USB flash drive.

On the other hand, the e-cigarettes market in Europe is on the rise due to the increased use by consumers driven by health concerns and has observed desired results in their attempts to quit/decrease their usage of conventional/combustible cigarettes. Despite concerns being voiced by a few medical professionals over the long-term usage of e-cigarettes, the low-risk factor associated with the use of e-cigarettes in comparison to conventional/combustible cigarettes is driving the growth of the market in the region. Aiming to reduce their use of conventional/combustible cigarettes, consumers in the region are increasingly using use e-cigarettes concurrently. Also, as e-cigarettes mimic the experience of smoking conventional/combustible cigarettes, consumers are increasingly using them to satisfy their nicotine dependency. E-cigarettes do not produce tar that is produced by traditional cigarettes, which is the main reason for lung cancer.

The growing awareness among individuals about the harmful effects of tobacco and the increasing willingness to quit smoking are increasing the demand for e-cigarettes in the Asia Pacific region. Apart from this, several manufacturers are introducing new-generation products that allow users to refill the cartridge. They are also offering innovative flavours such as mint, menthol, chocolate, bubble gum, coffee, tea, cinnamon and clove, which are assisting in increasing the overall sales. Additionally, leading players are focusing on mergers and acquisitions to expand their consumer base. For instance, Japan Tobacco International (JTI) acquired E-Lites, a UK-based e-cigarette brand, to launch new products and commercialize vaporizers. Furthermore, the easy availability of e-cigarettes through online retail channels is anticipated to drive the market in the coming years.

As for South America, the easy availability of a wide range of product flavours via online distribution channels is catalyzing the market growth across the South America region. Furthermore, leading players in the industry are relying on social media platforms to implement innovative promotional strategies and expand their consumer base in the region. Besides this, they are also introducing next-generation product variants that involve refillable, pre-filled pod systems, which is anticipated to fuel the market growth in the upcoming years. In Middle East & Africa market, the major drivers of the market are the increasing sales of these cigarettes via online platforms and growing awareness about health in the country. The introduction of new and intriguing flavours is the trend in the Middle East e-cigarette market. Let alone in South Africa, about 20% of the population uses e-cigarettes after the age of 15. Attractive flavours, such as bubble-gum, menthol, cola, coffee, mint, and fruits, have been introduced in the market to attract customers. The demand for new flavours by users is motivating manufacturers to launch many more of these. For instance, a new ‘Rebel Ice’ flavour was launched in 2019 by Twisp (Proprietary) Limited, a South African e-cigarette brand.

Historically, the e-cigarette market was highly fragmented and largely dominated by small start-up companies.

• NJOY—a company independent of the tobacco industry—was the unrivalled market leader in 2012, but had filed for bankruptcy by the end of 2016.
• In the US, British American Tobacco sales surged in 2014 and led into 2017. However, by the end of 2017, JUUL (a sleek, portable e-cigarette that resembles a USB flash drive made by JUUL Labs) rapidly became the largest retail e-cigarette brand in the US and substantially increased sales of the entire e-cigarette category.
• In 2018, JUUL accounted for more than two-thirds of the US e-cigarette market and is reportedly valued at $15 billion. JUUL Labs has begun to expand sales to other countries, such as the UK and Canada, where currently some of the top brands such as Logic, Vype, and Blu, are subsidiaries of major tobacco companies.
Due to the Covid 19 pandemic the whole supply chain of all the products were disturbed due the restrictions laid by various countries. And so, due to it the e-cigarette was also not available in some regions. Also due to the restrictions supermarkets/hypermarkets were closed, due to which the customers shifted from the traditional mode of sales to the online mode. And so the online distribution channel is forecasted to grow.

Recent Developments

• Philip Morris International Inc. introduced IQOS 3 DUO, to broaden its smoke-free portfolio. The most recent update, IQOS 3 DUO, is equipped with new functions to assist adult smokers in making a smooth transition away from cigarettes, in 2019.
• Philip Morris International Inc. announced the launch of IQOS ILUMA in Japan. The new IQOS ILUMA became the brand’s first tobacco-heating system to introduce induction-heating technology, which utilizes no blade and requires no cleaning, in 2021.
• Japan Tobacco Inc. launched Ploom X, its next-generation heated tobacco device. Ploom X is made available across Japan, including convenience stores and select tobacco retail stores, in 2021. In March 2019, two new tobacco capsule flavours, Pianissimo Aria Menthol and Pianissimo Pineapple Peach Yellow Cooler, were launched by Japan Tobacco Inc. for the Ploom TECH brand. Now, the company offers 10 unique flavours for its Ploom TECH brand.