E-cigarette Market Size, Share & Trends Analysis Report By Product Type (Completely Disposable Model, Rechargeable but Disposable Cartomizer, Personalized Vaporizer), By Battery Mode (Manual E-cigarette, Automatic E-cigarette), By Distribution Channel (Offline Retail, Online Retail) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global e-cigarette market size was valued at USD 26.71 billion in 2022. It is estimated to reach USD 81.46 billion by 2031, growing at a CAGR of 13.19% during the forecast period (2023–2031).

Currently, the market is experiencing a significant shift in preference from traditional cigarettes to e-cigarettes due to the lower levels of harmful substances and cost-effectiveness of e-cigarettes. This trend is a significant market growth driver. The availability of an extensive range of flavors in e-cigarettes is also expected to boost market growth.

An electronic cigarette, or e-cigarette, also called vape, is a device that imitates smoking tobacco. It includes an atomizer, a power source such as a battery, and a liquid-containing container such as a cartridge or tank. Rather than inhaling smoke, the user inhales vapor. Therefore, using an e-cigarette is commonly referred to as "vaping." E-liquid is heated by the atomizer, which turns it into vapor, which quickly cools into an aerosol of tiny droplets, vapor, and air.

Electronic cigarettes are activated by either inhaling or pressing a button. Some resemble conventional cigarettes, and most are reusable. In most cases, the vapor consists primarily of propylene glycol and glycerin, nicotine, and flavoring. Its precise composition varies based on several factors, including user behavior. E-cigarette use with prescribed nicotine replacement therapy (NRT) increases the quit rate among individuals attempting to quit smoking.

Market Dynamics

Market Drivers

Cost-effective Solution Compared to Traditional Tobacco

In European and North American countries, one of the reasons for switching to e-cigarettes or vapes is the perception that they are a healthier option than regular cigarettes; they are also cost-effective compared to traditional tobacco products. For instance, single-use, disposable e-cigarettes cost anywhere from USD 1 to USD 15 each or more. Rechargeable starter kits with multiple pods can cost anywhere from USD 25 to USD 150 or more, whereas liquid refill kits cost around USD 50 to USD 75 monthly. Likewise, liquid-nicotine cartridges are cheaper than tobacco cigarettes.

The affordable cost of e-cigarettes and the price-based marketing approaches used by vape shop vendors encourage customers to purchase. They highlight the potential of e-cigarettes as a less harmful and cheaper alternative to traditional smoking. Disposable models of e-cigarettes are reasonably affordable and considered beneficial in the long term compared to traditional cigarette smoking. Disposable e-cigarettes offer the same emanation as two packs of traditional tobacco cigarettes, making the former very economical. Concerns about costs and lower toxicity levels are propelling the e-cigarette market worldwide.

Introduction of Flavored E-cigarettes

The variety of flavors of e-cigarettes, including fruits, desserts, candies, and beverages, appeals to a wider array of consumers. Flavors mimic familiar and pleasurable tastes, making e-cigarette use more engaging and pleasurable. Flavors also attract non-smokers, such as young people, who are intrigued by the uniqueness of the flavors.

Furthermore, flavors contribute to smoking cessation efforts. Flavored e-cigarettes are more satisfying and appealing to smokers attempting to quit traditional cigarettes, easing the transition and accelerating the product adoption rate. With varying levels of sweetness and complexity, flavors can also be tailored to the preferences of particular regions or cultures. This modification increases consumer engagement and market share.

Market Restraint

Rising Awareness Regarding Health Issues Associated with E-cigarettes

The increasing global popularity of e-cigarettes has been accompanied by the recognition of many public health problems associated with their use. Moreover, e-cigarettes can put smokers at a higher risk of cardiopulmonary health risks, particularly respiratory health risks, especially those who smoke e-cigarettes alongside traditional tobacco cigar.

On the other hand, government bodies have also been supporting the spread of awareness regarding e-cigarette health risks among consumers. In 2018, the FDA increased the reach of "The Real Cost," a successful youth tobacco prevention campaign, to more than 10 million youth aged 12 to 17 who had used e-cigarettes or were interested in doing so. The campaign educated the youth about the potential risks of using e-cigarettes. Such campaigns are expected to hinder the market's growth over the forecast period.

Market Opportunities

Rising Product Launches

The rising number of e-cigarette and vape product launches is a key factor in expanding the e-cigarette market. Successful product launches are crucial to the growth of any market and its participants' product lines. Furthermore, it enhances the players' market share and confers a competitive edge. For instance, in August 2021, RELX Technology promoted the launch of its premium e-cigarette of the next generation in the United Arab Emirates and Kuwait.

Similarly, in May 2022, the partnership between market leaders Innokin Technology and Aquios Labs resulted in the introduction of the revolutionary water-based vaporizer Lota. Such product launches by several market players positively impact the electronic cigarette market growth. Thus, it is anticipated to create opportunities for market expansion over the forecast period.

Regional Analysis

Based on region, the global e-cigarette market is bifurcated into North America, Europe, and the Rest of the World.

North America Dominates the Gloabal Market

North American e-cigarette industry size is anticipated to exhibit a CAGR of 13.94% during the forecast period. North America was among the first regions to adopt electronic cigarettes and vaping devices. This region was crucial in developing and innovating e-cigarette technology and products, laying a solid foundation for market expansion. The US is the largest revenue generator for the global e-cigarette market in North America, with youth constituting the largest consumer segment. In 2021, the Centers for Disease Control and Prevention (CDC) estimated that 2.06 million middle and high school students in the United States, including 2.8% of middle school students and 11.3% of high school students, used electronic cigarettes for at least 30 days.

In addition, electronic cigarette manufacturers in the United States offer a vast selection of flavors, introducing new flavors frequently. Currently, more than 15,500 e-cigarette flavors are available in the US market. In 2021, the National Youth Tobacco Survey (NYTS) reported that about 85% of e-cigarette users use flavored products. There is also a growing perception that vaping and electronic cigarettes are fashionable. This is driving regional market growth during the forecast period.

Europe is estimated to exhibit a CAGR of 12.76% over the forecast period. The approval of e-cigarettes and vaping as superior alternatives to tobacco smoking by regional health organizations, such as British American Tobacco Plc's Vype and Imperial Brands Plc's Blu, is anticipated to stimulate market growth in Europe. Similarly, the e-cigarette market in the European region is primarily driven by the increasing number of people willing to quit smoking and favorable regulations set by the government. The Public Health England (PHE) states that vaping is 95% less harmful than smoking tobacco.

According to the Opinions and Lifestyle Survey published by the Office for National Statistics, in 2019, 5.7% of survey respondents stated that they currently use an e-cigarette (vaped); this equates to almost three million vapers in the population of Great Britain, with more than 50% of vapers using their e-cigarette as an aid to stop smoking. The increasing health issues related to smoking created caution among consumers, which helped the growth of e-cigarettes.

The Rest of the World consists of Asia-Pacific, South America, and the Middle East and Africa. Asia-Pacific is the leading revenue contributor in the region. Among the many countries in the region, China stands out as the preeminent market for electronic cigarettes. A high volume of smokers and an enthusiastic teenager base who vape as a fashion statement are the major factors driving the market in the country. In fact, according to the World Health Organization, there are more than 300 million cigarette smokers in China, accounting for one-third of the globe's total smokers as of 2021. Unlike other Asia-Pacific countries, South Korea has high safety standards regarding traditional smoking. South Korea is the second-largest country in Asia-Pacific in terms of per capita cigarette consumption (over 1,430 cigarettes per person every year), which possesses future growth potential for the market studied.

In most South American countries, vaping is illegal, and the laws are uncertain about e-cigarettes. For example, vaping is restricted in major countries like Brazil, Argentina, and Venezuela, while there are no definite laws in nations like Peru and Colombia. As the enforcement of e-cigarette laws is frequently left to the discretion of local authorities, vape shops are typically located in areas where they are technically illegal. These factors restrain market growth in the region.

In the Middle East and Africa, e-cigarettes have minimal penetration and are often banned by the local regulatory authorities. In the case of the Middle East, sales or promotion of nicotine-induced e-cigarettes is almost entirely excluded, while the regulations in the African region are highly uncertain. However, vaping is legal in South Africa, and major cities, such as Johannesburg and Cape Town, have many e-cigarette shops. Key players are also focusing on partnerships to offer an extensive range of products to consumers in the region. For instance, in 2020, Vuse South Africa joined forces with the leading vape brand Twisp in a partnership powered by progress to bring the best international quality vaping experiences to South African adult consumers.

Segmental Analysis

The global e-cigarette market is segmented by product type, battery mode, and distribution channel.

Based on product type, the global e-cigarette market is divided into completely disposable models, rechargeable but disposable cartomizers, and personalized vaporizers. 

The rechargeable but disposable cartomizer segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 11.72% throughout the forecast period. Rechargeable models of e-cigarettes are a favorite for most regular smokers who transitioned from tobacco smoking. The possibility of using the same device with another cartomizer and saving the cost of purchasing a whole new device altogether provides an effectively cheaper solution in the long run. These e-cigarettes can be used for an extended period as the batteries and e-liquid in the electronic cigarette can be changed. In addition, the increased knowledge about e-cigarettes being safer than traditional cigarettes, particularly among the millennial population, coupled with the ability of rechargeable e-cigarettes to deliver nicotine more effectively, is expected to benefit the segment's growth.

Personal vaporizers are becoming increasingly popular in the market, as they have the potential to increase quit rates significantly. However, their efficacy and safety in clinical smoking cessation and reduction trials are unreported. Higher-capacity lithium batteries are used in personal vaporizers, which makes these vaporizers quite effective. Liquid solutions, such as propylene glycol (PG), glycerol, distilled water, flavorings, and nicotine, can be replenished with cartridges (i.e., e-liquid).

Based on battery mode, the global e-cigarette market is bifurcated into manual e-cigarette and automatic e-cigarette. 

The automatic e-cigarette segment dominates the global market and is projected to exhibit a CAGR of 13.82% over the forecast period. In terms of operation, automatic e-cigarettes are very similar to traditional tobacco cigarettes. These e-cigarettes are more natural since they include an integrated system that monitors several aspects to provide the user with the optimum smoking experience possible. In addition, automatic e-cigarettes are often compact and closely resemble regular cigarettes. Moreover, these e-cigarettes consume less electricity, allowing for a comparatively longer vaping period between charges. These factors drive the sales of the automatic e-cigarette segment in the market studied during the forecast period.

Manual e-cigarettes are ideal for those users who prefer more control over vapor production without learning to operate or carry a hefty mod. These batteries are equipped with a little button that, when pressed, activates the heating element and begins heating the e-liquid without the need for a puff. Manual e-cigarettes have longer battery life, greater control, and a longer cutoff time than automatic batteries. Shortcomings of automatic e-cigarettes, primarily, are the drivers of manual e-cigarettes.

Based on distribution channels, the global e-cigarette market is divided into offline retail and online retail segments. 

The offline retail segment is the largest revenue contributor and is expected to exhibit a CAGR of 11.08% throughout the forecast period. Offline retail channels consist of traditional brick-and-mortar stores such as supermarkets/hypermarkets, specialty stores, or kiosks in shopping malls. Specialty stores offer greater visibility and a wide assortment of e-cigarettes. The high- and medium-level income groups have increased their frequency of visiting specialty stores, and impulsive behavior has further aided in the sales of e-cigarettes through these stores. Further, supermarkets/hypermarkets are also considered spots from which consumers can procure quality goods at economical prices and access an assortment of products.

The online shopping platform has successfully developed itself as a convenient marketplace, offering a diverse product range. The platform even offers cross-border deliveries across different locations. Online retailing platforms often offer hefty discounts, a wide assortment of products that are simple to compare, e-payments, the convenience of shopping from home, and free delivery. These factors have aided market growth and recently increased the sales of niche products, including e-cigarettes, through online retail.

Recent Developments

• September 2023- Aroma King, a renowned Polish vape brand, introduced its newest disposable product, the Cosmic Max, expanding its presence in Europe.
• March 2023- Altria announced a USD 2.75 billion investment in rival e-cigarette startup NJOY. The Virginia company announced that the Marlboro manufacturer acquires full possession of NJOY's e-vapor product portfolio, including its pod-based e-vapor product ACE.