The Vaporizer and Convenience Store industry are currently experiencing one of the fastest growth rates in e-commerce history. Vaporizers, also known as modems, are a tool to help an individual who wants to quit smoking without the use of nicotine. This new product has created a whole new market for electronics including laptops, cell phones, electric toothbrushes, smokers’ pipes, and other electronic goods. Here’s a look at how the Vaporizer and Convenience Store industry are growing, as well as the trends contributing to this growth.
The Vaporizer vs. Cigarette Trend. Currently, two out of three vapor products sold on the international market come from the United States. The United States is a large tobacco manufacturer and consumer of tobacco products, and it’s no surprise that they’re the largest consumers of vapor products. In fact, there are approximately four times more cigarettes sold in the U.S. than cigarettes sold in Japan, and twice as many cigarettes per person smoked in the U.S. than in Japan. Because of this trend, and the fact that the U.S. tobacco industry continues to decline while Japan and other countries continue to grow, the American consumer is “hooked” on vapor products. The Vaporizer and Convenience Store industry, therefore, can benefit from a significant increase in sales as more American citizens become addicted to vapor products.
Growth Drivers and Trends. One of the biggest trends contributing to Vaporizers and Convenience Store growth is the shift from tobacco to alternative tobacco products. While there have been some large-scale mergers and acquisitions in the tobacco industry over the last few years, many smaller companies have grown rapidly by offering less expensive, less harmful brands to younger, more health-conscious consumers. For example, Blu-ray and digital camera companies have started marketing to the youth, which are typically more health conscious and “tobacco savvy,” and this has caused an increase in younger consumers who are turning to less traditional tobacco products for their tobacco addictions.
Imperial Brands And Their New Product Line. A new subsidiary has been established by Altria Group, Inc. This company will focus on developing “aicous products” that mirror the core products offered by cigarettes like cigarettes, pipes, cigar, roaches, lighters, etc. By creating an “aicous product line,” Altria Group is looking to create a competitive landscape against Vape America and vaporizer manufacturers such as Craftsman, Firefly, and Smokestoo. The new company is also working to improve its manufacturing processes so that it may be able to lower prices more effectively and quickly than its competitors.
Global E-Cigarette Market Segmentation. According to industry experts, there are two main trends occurring in the global e-cigs and tobacco industry. First, there is a tremendous rise in the number of adult users of electronic cigarettes in developed countries like the U.S. As these users continue to rise, more developed countries such as the U.K., France, Italy, and the U.S. could see a large increase in cigarette sales.
Second, there is a rapid decline in global e-cigarette sales in emerging countries due to lower pricing and better delivery systems. While there is no concrete evidence indicating the decline in overall demand, the steep price cut by two major vendors is concerning. In May, Craftsman reduced prices on its starter kit and extended its free shipping program to an additional 20 countries. Vapesthat, a leading manufacturer of vaporizers, has also reduced prices and shipped to several new markets.
These two events by Altria Group, Inc. and other major vendors reflect a troubling trend in the global e-cigarette market growth rate. While tobacco companies report increases in cigarette sales, they have not provided proof that these increases will continue. Therefore, the lack of solid evidence to support their forecasts is troubling as well.
Lastly, there are no clear signals that prices on vaporizers will continue to decrease. Despite the current discounting trend, some vendors like Craftsman still charge more than $50. While prices may come down further in the coming months, they have not yet reached the prices we saw in late 2021 and early 2021. The lack of evidence supporting price decreases and a negative outlook for the market place continue to cast doubt on the viability of this product in the near future. As such, the current stock prices are not a good indicator of the overall strength of the industry. If you would like to receive our stock report, subscribe to our free newsletter.