Monday, 9 February 2015

How did the tobacco companies miss the rise in vaping?

At the start of the century vaping was something of a niche market and one which you did not readily hear of in the worldwide media. While many people recognised the potential at a very early stage it is worth noting that the first basic electronic cigarette appeared back in the 1960s. When you look at the industry today we hear of expectations that the US alone will turn over $2 billion in 2015 and the European market is showing significant growth. So, how did the tobacco companies miss the rise in vaping?


Dismissed as a niche market

There is no doubt that the vaping industry was dismissed in the very early stage as a new industry which would never hit the mass market. It is well-known that the tobacco companies and regulators looked at the industry at the turn-of-the-century decided it was not a threat. Indeed, there is evidence to show that the FDA (Food and Drug Administration) in the US attempted to ban electronic cigarettes out right only to have this move overturned by the High Court.

When you bear in mind the size of the tobacco industry, which is many times that of the vaping sector, the tobacco companies could very easily have taken over the sector and effectively closed it down.

Was this oversight an expensive error?

When you bear in mind the billions of dollars that the US tobacco companies are now ploughing into electronic cigarettes and vaping devices, this could turn out to be a massive oversight and very expensive. When the vaping industry moved from something of a niche market towards the main market and gained more exposure in the worldwide press, it did not take very long for the sector to show signs of significant growth. While the initial exponential growth will slow in the short to medium term many experts believe there is still significant potential in the medium to long term.

The tobacco companies are in a relatively difficult situation as they are effectively selling tobacco products as well as vaping devices. As many people see vaping devices as a "healthier version" of tobacco products it will certainly take some marketing genius to pull this one off.

What next for the industry?

There are many factors now coming into play with regards to the vaping industry in the short, medium and longer term. We will at some point see the introduction of various regulations within Europe and the US, tobacco companies will invest more money into the sector and some believe we will eventually see some form of additional taxation introduced. As we have mentioned in some of our earlier articles, not only have we moved beyond first generation products but we are now looking towards fourth-generation which integrate an array of different services and technologies. The industry is developing far quicker than the regulators can cope with and this is proving something of a problem for them.


Looking back at the turn-of-the-century the vaping industry was very much seen as a niche market although once it began to gain exposure, both online and off-line, it became apparent there was significant potential for growth. The tobacco companies and regulators around the world seemingly dismissed the industry some time ago and this is proving to be something of an expensive oversight both in terms of monetary value and regulatory power.

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