Challenges Faced by the Vape Industry 2024: What’s stopping the rapid growth of the vape market?
What's stopping the rapid growth of the vape market? Challenges Faced by the Vape Industry
On September 15, Hou Yuhan, the Global Vice President and Editor of 2FIRSTS, presented the future of the global e-cigarette industry in 2024. They analyzed the current situation of the industry with a lot of data. They predicted the trends we expect to see in the global electronic cigarette market in the next few years.
The period of rapid growth in the vape industry has come to an end, and now the vape market is entering a new phase, similar to the stock market. This shift indicates that competition among companies will become even more intense.
However, Compared to the nicotine market, e-cig penetration is still low, with massive room for growth.
Challenges Faced by the Vape Industry 2024
According to 2FIRSTS, the growth of e-cigarettes is being held back by regulations and technology. Overcoming this barrier and enabling faster growth requires new and creative business models, technological advances, and regulatory changes.
In terms of business operations, there may be a need to establish new ways of distributing vaping products. On the regulatory front, a more organized and scientific approach is expected.
Good examples are Hong Kong and Southeast Asian countries, which adjusted their e-cigarette bans this year.
In 2024, according to 2FIRSTS, e-cigarettes will go from being a trendy product to a core part of the tobacco industry regarding regulations and what people want.
Pod vapes will gain popularity due to their positive environmental impact and user experience, especially those with higher capacity. International tobacco and e-cigarette companies will compete directly with each other.
While there will be challenges, 2FIRSTS believes that technology and regulations will drive the industry to grow even more, bringing new ways of doing business and expanding the market.
Critical points from Hou Yuhan’s full speech:
- The rapid growth of the e-cigarette market is slowing. E-cigarette sales are growing more slowly than before. This means that companies will have to compete harder for customers.
- Although the e-cigarette market is growing more slowly, there is still plenty of room for further growth. Not as many people use e-cigarettes compared to traditional cigarettes.
- Two main things keep e-cigs from growing faster – government regulation and lack of new technology. Tighter rules and bans make it harder for some companies to sell e-cigarettes. And e-cigarettes need more innovation to appeal to more users.
- For the e-cigarette industry to continue to grow, it needs better regulations that are fair and based on science. They must also develop new vaping products that are better than what’s out there. This would help them reach more potential customers.
- Currently, e-cig companies are competing for the same pool of customers. They keep lowering prices and hurting profits instead of working together to grow the overall market.
- Soon, the big tobacco companies will likely head to head with the e-cig companies. They’ll use their money and influence to grab market share.
- But in the long run, new regulations and technological improvements will help e-cigarettes continue to expand. The industry will develop new business ideas and products that appeal to more users.
2FIRSTS summarized three main features of the electronic cigarette market in terms of regulation in its supply chain research report for the first half of 2023.
Three main features of the vape market in terms of regulation
- 1. The systematization
An effective regulatory policy for electronic cigarettes should cover two important areas: market access and product quality standards.
Market access means setting requirements for those who sell e-cigarettes to ensure they meet specific qualifications. Product quality standards help regulate the safety and quality of e-cigarette products.
In addition to having good policies, it’s important to enforce them effectively to ensure everyone is playing by the rules.
- 2. The scientific formulation of regulatory policy
Governments are changing their approach because electronic cigarette products have a significant impact.
Instead of banning them outright, they are considering the interests of the various groups involved. Regulators need more research to make informed decisions.
This year, we have seen some good examples, such as Hong Kong and Southeast Asian countries adjusting their bans on e-cigarettes.
- 3. The global collaboration
The e-cigarette trade is global and has unique characteristics. Relying on China’s regulations alone is not enough for effective regulation. We need countries to cooperate and share information on licensing and product standards.
It’s also essential to have a system that tracks the safety of e-cigarette products from manufacturing to the consumer. International research collaboration is also crucial.
In 2024, the e-cigarette industry is expected to see some changes.
Three trends and changes in the vape industry in 2024
- E-cigarettes are changing. They used to be fashionable, but now they are becoming more like traditional tobacco products. This change is happening because of rules and what people want.
- From an environmental and consumer experience perspective, replacement pod vapes are strategically important in the market.
- Replacement pod vapes are essential for the environment and the consumer experience. By 2024, they will be popular again in Europe, and new markets will have low-cost vape pod systems with more e-juice capacity.
- The world’s leading tobacco companies and electronic cigarette companies are in confrontation.
- Electronic cigarette companies will face competitive pressures from tobacco companies, including channel challenges, intellectual property rights, and various means of suppression through political lobbying.
The vaping industry may face challenges in 2024, but technology and regulations will ultimately support its growth in the long run.
Even though there are challenges, new ideas for how companies operate, regulations and technological advancements will help e-cigarettes continue to grow.