Good prospects for the e-cigarette industry

Two-thirds of Irish e-cigarette retailers and manufacturers are optimistic. They rate the future chances for the e-cigarette as good (46 percent) or even very good (22 percent) despite recent difficult circumstances. This is one of the results of a survey in which around 60 industry representatives took part.

At the end of 2019, reports of illnesses and deaths in the USA caused a slump in retail sales. 83 percent of the companies affected indicated in the current survey that their sales have declined for this reason.

In January 2020, the CDC announced that the incidents were due to black market drugs and had nothing to do with regular e-cigarettes. This has boosted consumer confidence and, with it, retail sales.

The consequences of the corona lockdown

The e-cigarette trade was also affected by the closure of the retail trade. For 74 percent of the survey participants, sales during the lockdown had deteriorated compared to the first two months of 2020. But the development since the reopening gives reason to be optimistic: 45 percent of the industry participants state that business has improved again, almost a fifth (19 percent) have even recorded significant improvements.

Impact on total sales

The e-cigarette market in Ireland has seen continuous growth over the past few years. Due to the negative reports and the effects of the Corona crisis, sales in 2021 are expected to be lower than in 2020. The participants' assessment: In 2021, total sales of around 75 million euros will be achieved. The industry expects growth of around 20 percent for 2022.

After difficult times for the e-cigarette industry in late 2019 and spring 2020, it is not surprising that sales have declined. But the positive attitude of retailers and the regained consumer confidence in e-cigarettes make us optimistic.

Consequences of restrictive regulation

When asked which regulatory measures would have the greatest negative impact on business, more than half of the participants (57 percent) named a possible government restriction on the variety of flavors. Other mentions: e-cigarette tax (24 percent) and advertising ban (15 percent).

Direct imports put a strain on the industry

The Irish e-cigarette industry is suffering from the six month period and the resulting direct imports. More than three quarters (77 percent) of those questioned reported economic disadvantages due to directly imported goods. 39 percent rate the six-month period as bad and even 43 percent as very bad for their business.

Background: Manufacturers and importers have to register their products six months before they can be sold. New products come onto the market with a considerable delay. The problem: During this time, consumers can obtain the new devices via direct imports from third countries. Inconsistent regulation in the EU: In France, the products can be sold directly.

Stationary trade is growing

The number of purely online retailers fell to 11 percent within a year. In 2019, 15 percent of the participants stated that they only sell e-cigarettes and accessories via an online shop. 37 percent use both sales channels. The proportion of retailers who sell exclusively in stationary stores has grown by 14 percent to 52 percent within a year.

Our survey shows the current situation in the Irish e-cigarette market. The trend is still positive, even if the last quarter of 2020 and the effects of the Corona crisis hit the industry hard in some cases. We are already seeing clear indications that business has picked up again and that the alternative e-cigarette, which is far less harmful than tobacco, could make a significant contribution to lowering the smoking rate in Ireland in the future. Prerequisite: The market must not be slowed down by excessive political regulations. "