As far back as November 2012, Euromonitor International was the first company to estimate a realistic market size for e-cigarettes. The figure of USD2 billion was three to four times higher than the nearest estimates of USD500 million, and caused shockwaves in the industry, galvanising players to sit up and take note of this emerging category. Nearly five years later, in 2017 Euromonitor now produces data on the legal market for vapour products in 60 markets globally.

Growth in vapour products set to slow, but remain significant

The period 2016-2021 is set to see significantly moderated (although still eyewateringly high) growth rates – from 818% over 2011-2016 to 176% over 2016-2021. This moderation is partly due to increasing maturity, alongside the impact of increased regulation and the challenge of reaching beyond the early adopter/“low-hanging fruit” consumer cohort.

A key shift in vapour products will occur during the forecast period, as consumption moves away from open vaping systems. The share of open systems of total vapour products peaked at 71% in 2014. By 2021, it is projected to account for 32% of value sales, as other ecigarette products, closed systems and heated tobacco gain share. From a standing start in 2014, sales of heated tobacco constituted 17% of the vapour products category in 2016, and this is forecast to reach 45% by 2021, as some newer consumers prefer it to the e-cigarette segments, and higher unit prices exert an influence.

Visual of Vaper Growth

numbers of vapers by millions

Source: Euromonitor International

Vapour products poised to overtake other tobacco product categories

By 2020, vapour products is forecast to be the single largest category outside cigarettes, eclipsing both cigars and smoking tobacco. Given the current pricing parity between heated tobacco and cigarettes, increased penetration of heated tobacco products will very quickly drive value sales in vapour products.

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