E-cigarette and Vaping Market Size, Share & Trends Analysis Report By Product (Rechargeable, Modular, Disposable), By Distribution Channel (Retail, Online), By Component, And Segment Forecasts, 2018 - 2025

Industry Insights

The global e-cigarette and vaping market size was valued at USD 7.19 billion in 2016. It is anticipated to register a CAGR of 23.8% over the forecast period. The market is expected to gain traction over the forecast period, owing to growing popularity of these products among millennials. Moreover, availability of a variety of e-cigarette options is another factor projected to provide a tremendous push to the market over the forecast period.

E-cigarette is a battery-operated device that is considered as a safe alternative to smoking cigarettes. The industry is non-uniformly regulated as effects of the devices are under review. Large tobacco companies have flourished by introducing these devices through various brands that cater to different requirements, thereby enhancing quality and level of customization of the products.

The market has evolved since 2014 as e-cigarettes and vaping devices are becoming more efficient in terms of battery life and range of flavors in the market. Flavor is an important selling proposition in these devices. As a result, manufacturers are trying to come up with flavors that also emit pleasant smell when a device is lit. In addition, cost-effectiveness of these devices is further promoting sales of these devices.

Several medical associations worldwide have verified e-cigarettes as being safer than traditional cigarettes. Rising awareness regarding results of such studies is boosting the adoption of e-cigarettes and vaping devices among younger generation. Moreover, customization options offered by vendors and continuous improvements in designs and flavors are paving way for new and improved products. This trend, in turn, is likely to work in favor of the market during the forecast period.

On the other hand, strict regulations enforced by local authorities across various countries such as the U.S. and Germany are estimated to hamper the growth of the market. Multiple countries are banning distribution and sales of vapor products, which in turn, is deterring the global sales of these products. Furthermore, stringent trading laws have made it difficult to import vaping devices for personal consumption. Participants of the vaping industry have formed various associations to combat these policies against their products and to regularize the industry.

Product Insights

The rechargeable segment generated the highest revenue in 2016. The segment is poised to maintain its position until 2025. E-cigarette devices have evolved over the years, becoming smaller and safer. Rechargeable devices can be used for a longer duration by switching cartridges containing e-liquid. Moreover, these devices cost fairly less, which is anticipated to rev up the adoption rate over the forecast period.

Modular devices form the most promising product segment in the market, registering a CAGR of 24.9% during the same period. These devices offer customization options that help users to combine different parts to alter flavor and amount of vapor generated from the device. Technologies such as pod devices have increased the sales of vaping devices over the past few years.

Distribution Channel Insights

The retail segment dominated the e-cigarette and vaping market and was valued at USD 6.31 billion in 2016. E-cigarettes were initially sold in retail outlets such as gas stations and vape shops. These stores helped users to choose from a wide variety of devices and e-liquid. Moreover, vape shops enabled users to test the device and e-liquid before making the purchase decision.

Companies started selling e-cigarettes online in late 2015. The online platform is the fastest growing platform for sales of these products and is likely to exhibit a CAGR of 29.9% during the forecast period. Websites offer a larger variety of products as compared to retail stores. Moreover, sellers have their own websites from where users can purchase products at a low price.

Component Insights

The method of delivery (MOD) segment generated the highest revenue in 2016 and was valued at USD 3.48 billion in 2016. Availability of MODs in various designs has led to an increase in the purchase of e-cigarettes. MODs are available in multiple types, such as regulated and unregulated (box). Introduction of vaping competitions is encouraging sales of MODs, especially box ones. Regulated type is mostly meant for general usage.

E-liquid is expected to post the highest CAGR of 26.7% over the forecast period. Introduction of various types of flavors such as fruit, tobacco, dessert, and mixed is stimulating the growth of the segment. Furthermore, the segment is projected to significantly drive the market owing to burgeoning Do-it-Yourself (DIY) trend, where users develop their own e-liquid by combining flavors.

Regional Insights

Asia Pacific is the fastest growing region, progressing at a CAGR of 28.3% during the forecast period. Growing popularity of vaping devices in the region is one of the primary growth stimulants for the market. On the other hand, North America will remain the leading region in the market throughout the forecast period. Domicile of some of the leading market players such as Philip Morris International Inc. and R.J. Reynolds Vapor Company gives an edge to North America over other regions. Furthermore, growing acceptance of e-cigarettes and vaping devices as a safe alternative to tobacco is augmenting the regional market.

E-cigarette and Vaping Market Share Insights

Key players in the industry include Altria Group, Inc.; British American Tobacco; Imperial Brands; International Vapor Group; Japan Tobacco; International; NicQuid; Philip Morris International Inc.; R.J. Reynolds Vapor Company; Shenzhen IVPS Technology Co., Ltd.; and Shenzhen KangerTech Technology Co.; Ltd.

The industry is characterized by low entry barriers for new players since they can establish their business with minimal of products and development of new products. investments. Competition among players is high and large companies acquire smaller companies to increase customer base and geographical reach. Companies invest actively for continuous improvement

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global e-cigarette and vaping market report based on product, component, distribution channel, and region.

• Product Outlook (Revenue, USD Million; 2014 - 2025)

  • Disposable

  • Rechargeable

  • Modular Devices

• Component Outlook (Revenue, USD Million; 2014 - 2025)

  • Atomizer

  • Method of Delivery (MOD)

  • Cartomizer

  • E-liquid

• Distribution Channel Outlook (Revenue, USD Million; 2014 - 2025)

  • Online

  • Retail

• Regional Outlook (Revenue, USD Million; 2014 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • Japan

    • India

  • Latin America

    • Brazil

  • MEA