The E Cigarette industry looks doomed

[Bobsbeer]

It looks like the anti brigade may be winning the war.  Just read this article on Yahoo Finance, which is not good if true.

"Fervor over e-cigarettes continues to wane."



So says a new report today from RBC Capital Markets on the tobacco industry. It's a bit of cold water on a segment that just a few years ago appeared to be exploding. When e-cigs gained sudden popularity, it appeared the segment could threaten traditional cigarettes; it no longer looks that way. (It also won't help sales if e-cigs keep exploding inside pockets.) Last year saw the end of five consecutive years of triple-digit sales growth.



The category of e-cigarettes and vaporizers, RBC says, "continues to struggle and retailers are struggling with too much inventory on hand (which is hurting retailer ability to take on new innovation). We believe this is largely the function of too many brands in the category and brand velocity being too low."



One chart in the RBC report makes the drop glaringly clear.



Convenience stores that sell e-cigs and vaporizers were asked if they plan to expand their offerings. One year ago, 29% said yes. By June, only 23% said yes. In September, it dropped to 11% and now 0% say yes.




Outlook isn't much better for the vaporizer category. Stores that sell vaporizers (known in the industry as "open systems" as opposed to e-cigs) were asked "how trends are progressing." Just under half say interest is slowing down, while just under half say the category "never really got started," and 5% say sales are "booming." Among retailers that do not sell vaporizers, 0% are interested in entering the category, down from 12% as recently as September.



The news is sunnier for traditional cigarettes, nearly one year after Reynolds American (RAI), the second-largest tobacco company behind Altria Group (MO) completed a $25 billion acquisition of Lorillard last June. Cigarette sales were down 3% to 4% in the first quarter, but that was less of a decline than expected. RBC believes it was due to rising consumer confidence and lower gas prices. Consumer confidence in e-cigarettes, on the other hand, doesn't look pretty. 

finance.yahoo.com/news/is-e-cigarettes-business-doomed-e-cig-retailers-sales-are-down-202904071.html

[izan]

Ummm.. come on Bob...

Out of context and NOT directed at the general public.
This data is from an "industry" (convience stores/petrol stations) publication.
Petrol Station sales are not a valid indicator of the market.
Cheers
I

[nanotm]

yeah its worse than that, they restricted the results to a single state where from 1st of April store owners had to pay the sin tax on e-cigs up front (in order to stock the products) and used previous years based on multi state responses.....

like all "this is doomed" type efforts the figures have been manipulated to fit the narrative, and manipulated even harder given the study was funded by a tobacco company via a market research agency to help them stifle investor potential in competitor products ....

[Bobsbeer]

That may be true izan, but that sector of the market is probably the biggest sector in terms of volume and sales. Especially in the USA where this data is from. What it is saying in my view is that appetite for vaping products by the general public is on the wane. Demand fuels supply, so if demand drops so will the supply. Comparative tobacco sales figures while down, are better than expected. This means the appetite by current smokers to swap to vaping is also reduced. Possibly due to more expendable income as suggested, but it may also be due in part to the constant barrage of negative reports about vaping. Something is driving the demand down if outlets are reducing shelf space. If demand was higher they would stock more.

While the report is not aimed at the general public, it is of interest from a vaping perspective. So hardly out of context on a vaping forum.

[digicig]

Didn't realise that RAI (Reynolds American) had bought Lorlliard - and thereby Blu ecigs as well

As consumers - it's pretty tricky keeping track of the 'next big thing' - and forums tend to nudge members towards certain products in this regard.
As a retailer - it must be a relative nightmare - with certain exceptions, who have deals in place with certain manufacturers - as no sooner have you ordered the latest device or miser, and it's selling like the proverbial 'Hot Cakes' - pop in a 3nd or 3rd order and it's no longer required as the newest, latest shiney 'promise of the Vaping Nirvanna' has been installed and the new stocks resale value has plummeted

Bless the resellers - because without them our vaping would have been nigh on impossible - and it's a high risk and stressful business

[izan]

Apr 21, 2016 14:33:56 GMT Bobsbeer said:

That may be true izan, but that sector of the market is probably the biggest sector in terms of volume and sales. Especially in the USA where this data is from. What it is saying in my view is that appetite for vaping products by the general public is on the wane. Demand fuels supply, so if demand drops so will the supply. Comparative tobacco sales figures while down, are better than expected. This means the appetite by current smokers to swap to vaping is also reduced. Possibly due to more expendable income as suggested, but it may also be due in part to the constant barrage of negative reports about vaping. Something is driving the demand down if outlets are reducing shelf space. If demand was higher they would stock more.

While the report is not aimed at the general public, it is of interest from a vaping perspective. So hardly out of context on a vaping forum.

I can appreciate that perspective, however, having worked in that industry for a few years in a variety of roles, I can state that it is wholly unrepresentative of "real" markets.

I would say it is equal to judging condom use based on sales from vending machines in bars/pubs/discos.

Cheers
I

[Get Off My Cloud]

[DiscoDes]

"Convenience stores that sell e-cigs and vaporizers were asked if they plan to expand their offerings. One year ago, 29% said yes. By June, only 23% said yes. In September, it dropped to 11% and now 0% say yes."


EXPAND is the key word here.

They do not say that E-Cig sales are dropping, these sites only have limited space in which to put their products. It just means they don't not plan to take on any new lines.

It also does not answer the obvious question in how many retailers now stock these products who did not a year ago or vice versa.

Nothing to worry about IMO.

[yahoo2u2]

Looking at the data and the trends it is showing a decline in a particular market area and we may also see a decline as the number of smokers gain more information and advice from existing vapers ensuring that the ecig a like are avoided like the plague.

Of course, they wont expand this range as the expansion market wont be present from a POS perspective. They are usually overpriced for what they are and if we look at local petrol stations here in the UK the liquids they sell are not the best and usually well over the top price wise, so again are avoided by many.

I also think that in the RBA market we are being flooded with so many different tanks and tank variations that it is making the market difficult to settle on setup. How many of us have more than a couple of tanks that when we purchased them were told they are the best thing since sliced bread and a must have, yet they are no different in the main with a few pushing forward.

It is also an issue when we are now moving towards the battery mods without the full awareness on how different the batteries are to use and carry about. This I think is one of the areas that is hurting the ecig message. Millions are used without issues, its the few that are not that causes the issues for everyone else.

If the TPD and the regulations that are implemented across the world are not based on science nor fact, but the drive to recoup the massive loss of tax income to governments, then the market will decline as if a smoker spends say £50 on fags and when taxed to the hilt £45 on ecig juice, they will stay on the cigs.

If China stops manufacturing ecigs then this would be a clear indicator of the decline.

[Greg]

I sometimes wonder if vapers are their own worst enemies

[Bobsbeer]

Nobody is saying vaping is about to end tomorrow. All I did was post to create a discussion based on an article. We may not like the news or agree with it. It's just an article aimed at retailers not us the vapers. However it does show a decline in interest by retailers in the sector. That is the real concern here. It doesn't give any real reason for that decline, and it could be a number of factors, or combination. It may be that more people are purchasing from dedicated ecig shops, or moving over to better equipment faster. The trend here is what is important, and appears to be contrary to popular thought. E Cigs are generally reported to be on an upward trajectory as people learn of the benefits, so to see a decline in the interest by retailers is not good whichever way you look at it.

We on here are the enlightened ones. I have never purchased any vaping kit/juice from a convenience store or chemist. It has all been online or dedicated vaping shop. Yet the market for convenience store type outlets is big and important, regardless of our views of the cig a likes they sell on the whole.

[erik514]

Could it be that general retailers are showing less interest because a better and cheaper product is for sale in he vape shop that's opened around the corner, or that they are unable to compete with online prices?

[DiscoDes]

Apr 21, 2016 20:04:08 GMT erik514 said:

Could it be that general retailers are showing less interest because a better and cheaper product is for sale in he vape shop that's opened around the corner, or that they are unable to compete with online prices?

YES to both.

[djs]

All the retailers I know are in fact reducing their offering.

It's because nobody wants to buy Blu, Vivid and E-Lites, and let's face it.... who can blame them.

Truth is, normal run-of-mill stores can't get into selling mods and even posh eGo kits are a bit 'out there' for many.

However, Vaping remains on the increase and people are shopping by the £1,000s at the online e-cig shops. This means UKecigstore are probably all ready to retire to the Bahamas, which would be a good thing too.

I know one retailer who is almost giving up selling e-cigs as it happens. The only thing he can make decent money on is selling Chinese liquid for £4 a bottle... and people don't buy that for long either, not when they find out you can buy £1 e-liquid.

[uksteve]

Seriously , why would you buy £1 eliquid


I make my own and it just comes in under a pound for 10 ml


If you wanna vape that shit crack on