iiMedia Research, a world-renowned third-party data mining and analysis organization in the new economic industry, released the "2021-2022 Special Research Report on the Development Trend of the Global Electronic Cigarette Industry" (hereinafter referred to as the "Report"). The report shows that in the past three years, the global e-cigarette retail sales have maintained a rapid growth trend. Made in China leads global e-cigarette technology innovation and is sold in more than 200 countries and regions.
01. HNB has become the main development direction of developed countries in the United States and Japan
According to the report research, according to the general standards of the international market, e-cigarette products are generally divided into two main directions: atomized e-cigarettes and HNB (heat not burn). However, China`s definition of e-cigarettes only mainly includes two categories: atomized e-cigarettes and solid e-cigarettes. Tobacco products such as heated cigarettes that are directly processed and manufactured by tobacco are included in cigarette management and do not belong to e-cigarettes.
In terms of market size, the compound growth rate of the retail volume of the global atomized electronic cigarette industry from 2018 to 2021 will be 18.6%, and the retail volume will reach 42.44 billion US dollars in 2022. The retail scale of the global HNB industry has a compound growth rate of 58.4% from 2018 to 2021, and the retail scale is expected to reach US$31.37 billion in 2022.
The degree of support and development stage of HNB products vary from country to country. The country with the most mature development is Japan, where 30% of smokers have completed the conversion to HNB products. Tobacco giant Philip Morris International officially announced that it will stop selling cigarettes in Japan within 10 years. As of the end of 2020, the total number of IQOS (Philip Morris International HNB brand) users worldwide is about 17.6 million, of which 12.7 million users have completely switched to IQOS and successfully quit smoking.
02. Harm reduction is the core demand of tobacco evolution
According to the report`s survey on Chinese consumers, the highest smoking frequency among Chinese traditional tobacco consumers is one pack every two or three days (43.1%), and 49.7% have reduced their smoking frequency in the past year; over 90% of Chinese traditional tobacco consumers 77.9% of those who have thought about quitting smoking have tried it, and only 23.8% quit smoking successfully. The most important reason why consumers want to quit smoking is that they are worried about endangering the health of family and friends around them (77.1%), followed by worrying about affecting their own health (74.1%). Analysts believe that almost all Chinese traditional tobacco consumers have the idea or action to quit smoking. Unfortunately, only about 20% have successfully quit smoking. Quitting cigarettes is an urgent need for domestic traditional tobacco consumers.
Survey data show that over 70% of Chinese cigarette consumers know about and are interested in e-cigarettes. Consumers are most interested in the auxiliary effect of e-cigarettes on smoking cessation (74.6%), followed by the fact that e-cigarettes are fashionable and interesting (67.2%). 83.0% of Chinese e-cigarette consumers believe that e-cigarettes are helpful in reducing cigarette dependence, and 37.8% of solid e-cigarette consumers believe that they are obviously helpful for smoking cessation. 52.0% of consumers believe that e-cigarettes are healthier than cigarettes.
However, the research report also pointed out that consumers have a relatively unified understanding of e-cigarettes in terms of replacing cigarettes or reducing cigarette dependence, and most people recognize their positive effects, but there are still large differences in the dangers of e-cigarettes. Nearly half of consumers think that its harm is the same or higher than that of cigarettes. This is related to the irregular development of the domestic e-cigarette industry. With the release of national standards and the gradual strengthening of supervision, the standards and cognition of electronic cigarette products will be unified.
03. China's manufacturing technology leads the world and dominates
The data shows that the market size of China's e-cigarette industry continues to grow. In 2021, the domestic sales market will be 14.50 billion yuan, and the growth rate is expected to be 76.0% in 2022, with a market size of 25.52 billion yuan. The export market of China's e-cigarette industry is huge. In 2021, the export will reach 101.50 billion yuan. The growth rate is expected to be 63.4% in 2022, and the market size will reach 165.88 billion yuan. In 2021, China's e-cigarette industry will directly employ about 1.5 million people, and drive indirect employment of about 4 million people, for a total of about 5.5 million people. Statistics show that as of 2021, Chinese companies will manufacture more than 95% of the world's electronic atomization production capacity and sell them to more than 200 countries and regions.
According to the IMS model, the potential market size of China's e-cigarette segments is estimated. Under the condition that the policy gradually improves the supervision of the e-cigarette market, it is estimated that the penetration rate of solid e-cigarettes in China will reach 3% to 5% in 2025 (the penetration rate of HNB will reach 15%) to 25%, of which solid electronic cigarettes accounted for about 20%), the potential market size is about 53.1 billion to 88.5 billion yuan, the penetration rate of atomized electronic cigarettes is 4% to 8%, and the potential market size is about 39.6 billion to 79.2 billion yuan Yuan.
The research also shows that China has an advantage in the global e-cigarette industry, and Chinese manufacturing promotes the development of the industry through technological innovation. Domestic private e-cigarette brands such as RELX have been in the field of e-cigarettes for many years, and have achieved innovative results in product and material research and development, production technology, etc., which has driven the employment of personnel in the entire industry chain from research and development to sales. According to the survey data, 60.0% and 48.2% of Chinese e-cigarette consumers prefer RELX and Modi respectively.
04. The general trend of legalization and standardization of electronic cigarette industry
iiMedia Consulting analysts believe that in order to ensure the long-term and sustainable development of the domestic e-cigarette industry, the release and implementation of national e-cigarette standards is the general trend. Europe, the United States, Japan and South Korea have issued clear policy guidelines and regulatory measures for e-cigarettes, and the steady development of China's e-cigarette industry is speeding up the track of legalization and standardization.
Since 2021, my country has successively issued and improved e-cigarette-related national standards and management methods, clarified that e-cigarettes are under the management of the Tobacco Monopoly Bureau, and classified e-cigarettes as new tobacco products. Clarify the classification of atomized electronic cigarettes and solid electronic cigarettes, and promote the production and operation of the electronic cigarette industry to become more standardized.
iiMedia Consulting analysts believe that the new regulations mean that e-cigarettes, as a new type of tobacco product, have officially obtained legal status at the national legal level. The implementation of the license will strengthen the supervision of the qualifications of the main players in the e-cigarette market from the source in the production, wholesale and retail links, which will greatly improve the chaotic and disorderly situation of hundreds of brands in the domestic e-cigarette market, and promote the leading players with research and development capabilities and technological innovation. All enterprises have developed steadily and orderly.
The report pointed out that the current supervision of my country's e-cigarette industry is developing towards a standardized market with laws to follow and rules to follow. How to learn from the successful management experience of the world, through standardized management, and play the important role of the new economy and new formats in the national economy has become the main focus of all parties in the market.