Analysis of the e-cigarette market in India
The relevance of research
According to WHO, electronic nicotine delivery systems (ENDS) and electronic non-nicotine delivery systems (ENNDS), known as ""electronic cigarettes"", are products that, when a liquid is heated, form an aerosol that is inhaled by the user.
Purpose of the study
Analyzing the state of the electronic cigarette market in India, assessing the market size, analyzing competitors, as well as determining the factors affecting the electronic cigarette market in India)
Content
Part 1. Overview of the Indian e-cigarette market
1.1. Main characteristics of the market
1.2. Dynamics of the market volume of electronic cigarettes 2017-2021 Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Stage of the life cycle of the e-cigarette market
1.5. Competition from substitute products
Part 2. Competitive analysis in the e-cigarette market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of the production of electronic cigarettes
Part 4. Analysis of foreign trade supplies of electronic cigarettes
4.1. The volume and dynamics of imports of electronic cigarettes
4.2. Import structure
4.3. The volume and dynamics of exports of electronic cigarettes
4.4. Export structure
Part 5. Analysis of consumption of electronic cigarettes
5.1. Dynamics of consumption of electronic cigarettes
5.2. Analysis of the results of tenders for the purchase
Part 6. Price Analysis
6.2. Average consumer prices by states in India
Part 7. Assessment of factors of investment attractiveness of the market
Part 8. Forecast of the development of the market for electronic cigarettes until 2026
Part 9. Recommendations and conclusions
Research excerpt
Part 1. Overview of the Indian e-cigarette market
1.1.Main characteristics of the market
According to WHO, electronic nicotine delivery systems (ENDS) and electronic non-nicotine delivery systems (ENNDS), known as ""electronic cigarettes"", are products that, when a liquid is heated, form an aerosol that is inhaled by the user. The aerosol may or may not contain nicotine. Propylene glycol, with or without added glycerin, and flavors are the main ingredients in e-cigarette fillers by volume. Electronic cigarettes do not contain tobacco, but are unhealthy and dangerous products. At the same time, the long-term effects of their use for the consumer himself and those around him have not yet been fully studied.
E-cigarette smoking is spreading at a very fast pace not only in India but also abroad. According to WHO forecasts, by 2030, sales of electronic cigarettes will increase by 17 times in the world.
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1.2. Dynamics of the market volume of electronic cigarettes 2017–2021 Potential market capacity
One of the main reasons for the rapid spread of electronic cigarettes until 2019 was the complete lack of control over their sale and advertising, the possibility of smoking in public places. The trend was especially pronounced in large cities.
Until 2019, the electronic cigarette market showed active growth by an average of 58% in real terms. In 2020, for the first time in the study period, the market decreased by 21,9% due to a reduction in import supplies amid the pandemic and government regulation of the market.
Diagram 2. Dynamics of the market volume of electronic cigarettes, 2017–2021, mln pcs.
According to Rosstat, in 2020, …% of Indians over 15 years of age continued to smoke, or about … million people. In 2021, interest in a healthy lifestyle has grown. People tend to buy products with a minimum amount of preservatives, live in ecologically clean areas, and give up bad habits.
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The shares of proceeds from the sale of electronic cigarettes are estimated by GidMarket analysts based on the difference in the cost of electronic cigarettes in federal districts and the population in them.
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Diagram 3. Revenue (net) from the sale of electronic cigarettes by union territories for 2017–2021, %
1.3. Assessment of factors affecting the market
Let's consider the main factors influencing the market and, accordingly, demand.
- Economic
India GDP
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation. The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.
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In 2021, GDP grew by …%, fully offsetting the decline in 2020. According to the Ministry of Economic Development, both manufacturing industries and industries focused on consumer demand contributed to the recovery of the Indian economy in 2021.
The dynamics of GDP in 2022 will be affected by multidirectional factors, including a slowdown in the global economy, aggravation of geopolitical problems, the imposition of sanctions against India, the economic situation in partner countries, imbalances in supply and demand for certain groups of goods, disruptions in the supply chain.
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Dollar rate
In 2022, the rupiah began to depreciate due to geopolitical instability. At the end of February 2022, the rupee began to change against the backdrop of Western sanctions. The reason for them was the Indian military operation in Ukraine, which was announced on February 24, 2022.
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Significant fluctuations in the US dollar exchange rate have a negative impact on the market under study.
- Социальные
Population
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As of January 1, 2022, the resident population of India, according to preliminary estimates by Rosstat, amounted to … million people, having decreased over the year by almost … thousand people (minus 0,5%).
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Real income of the population
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According to Rosstat, the level of real disposable income of Indians for Jan.-Mar. 2022 decreased by …% compared to the same period in 2021
The economic situation in 2022 is mainly influenced by geopolitics. As the key rate rises, so does inflation. Growing inflation leads to a fall in real disposable money incomes of the population. Negative influence of the factor.
Healthy lifestyle
Smoking cessation is a trend that confidently finds its fans.
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According to experts, just five minutes of e-cigarette smoking can cause changes in lung function and increase inflammation in the airways. In addition, there is another ailment that can overtake a smoker - “vaper disease”. Symptoms of this disease are: cough, shortness of breath, fever, chills, vomiting, diarrhea, headache, dizziness, heart palpitations and chest pain. The course of the consequences is unpredictable. The sick usually require hospitalization.
Flavorings in liquids often cause allergic diseases of the upper respiratory tract.
Thermal decomposition of propylene glycol and glycerin leads to the formation of toxic compounds of acrolein and formaldehyde. Acrolein irritates the mucous membranes of the eyes and respiratory tract, and also exhibits mutagenic properties, which is associated with the development of cancer in the future.
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- technological
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- Political
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Concluding the assessment of the factors influencing the Indian e-cigarette market, we will summarize the key ones in the framework of the STEP analysis.
Table 2. STEP analysis of factors affecting the e-cigarette market
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1.4. Stage of the life cycle of the e-cigarette market
The e-cigarette market is in a growth stage. The growth stage is very important for companies, as it creates the most favorable conditions for dominating the market and for increasing profitability and stability. All efforts at this stage should be aimed at extending it, at creating entry barriers for new players, at achieving maximum market coverage - all this will ensure the most comfortable existence of companies at the next stage of the life cycle.
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1.5. Competition from substitute products
Tobacco heating systems are the main substitute product for electronic cigarettes.
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The device is either a heat source, under the external influence of which nicotine in the form of an aerosol is drawn out from specially designed cigarettes (for example, in iQOS and Glo products), or a tightly closed heated chamber for aerosolization of nicotine directly from the tobacco leaf (for example, in Ploom and Pax products). ). The heating device requires electric charging.
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Traditional cigarettes are also substitute goods. The smoke of each traditional cigarette contains more than 5000 different chemicals, including toxic and carcinogenic substances. Cigarettes are highly addictive and have a lasting negative impact on the health of the smoker. A smoker of conventional cigarettes, unlike electronic cigarettes, spreads a strong unpleasant odor.
Some smokers alternate between conventional and electronic cigarettes. These are mainly those who have not been able to completely switch from conventional cigarettes to electronic cigarettes, since smoking electronic cigarettes does not give them the full experience that they get from conventional ones.
The impact of regular cigarettes on the studied market is average.
Part 2. Competitive analysis in the e-cigarette market
2.1. Major players in the market
The main participants in the electronic cigarette market are identified by GidMarket analysts for the import of brands in value terms according to the Federal Customs Service.
Table 3. The main companies participating in the electronic cigarette market in 2021
2.2. Market shares of the largest competitors
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Diagram 6. Shares of the largest competitors in the electronic cigarette market in 2021, %
From the point of view of competitive concentration, the market is classified as low-concentrated (Herfindahl-Hirschman index (HHI < 1000). Mergers and acquisitions are allowed without hindrance.
2.3. Profiles of major players
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Part 3. Analysis of the production of electronic cigarettes
According to the results of 2021, no Indian manufacturers of electronic cigarettes were found by GidMarket analysts on the market. It is cheaper to buy imported products and sell them in the Indian market.
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From time to time, information about the Indian production of electronic cigarettes appears on the Internet, but no confirmation was found by GidMarket analysts.
Thus, electronic cigarettes as such are not produced in the Indian market.
Part 4. Analysis of foreign trade supplies of electronic cigarettes
4.1. The volume and dynamics of imports of electronic cigarettes
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In 2020, for the first time, a drop in imports was recorded, which is associated with both government regulation and the coronavirus pandemic. Imports decreased by …% and amounted to … million units. electronic cigarettes.
In 2021, imports increased by …% to … thousand electronic cigarettes, the number of deliveries from China is actively increasing, and the popularity of electronic cigarettes continues to grow.
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4.2. Import structure
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Note that Polish-made electronic cigarettes are supplied to the Indian market through the Netherlands. China supplies electronic cigarettes, in addition to their own production, also made in Korea. At the same time, Chinese electronic cigarettes are also supplied to the Indian market through Latvia, Lithuania and Finland.
4.3. The volume and dynamics of exports of electronic cigarettes
India exports electronic cigarettes made in other countries. Significant growth in 2020 and 2021 occurred due to an increase in supplies to Ukraine. During the study period, exports increased by 74,1 thousand electronic cigarettes.
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4.4. Export structure
The main volume of electronic cigarettes in value terms in 2021 was supplied from India to Ukraine – to Donetsk and Luhansk regions – …%. It was mainly re-exported from China under the Cricket and Maskking brands. Also electronic cigarettes from India were delivered to Azerbaijan – …% and to Estonia – …%.
Chart 9. Structure of exports by countries in 2021, %
Part 5. Analysis of consumption of electronic cigarettes
5.1. Dynamics of consumption of electronic cigarettes
Per capita consumption was estimated by GidMarket on the basis of the ratio of market size to the number of smokers in India.
In general, the dynamics of consumption of electronic cigarettes has a positive trend. At the end of 2021, consumption increased compared to 2017.
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There are about four times more male smokers than females. A man in India usually tries his first cigarette at the age of 16, and a woman at 18.
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5.2. Analysis of the results of tenders for the purchase
Tenders for the purchase of electronic cigarettes are rare. Electronic cigarettes are purchased mainly for resale at filling stations/gas stations and as props for theatrical performances.
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Part 6. Price Analysis
6.2. Average consumer prices by states in India
The cost of each type of electronic cigarette depends primarily on the quality of the electronic filling, battery capacity, functional component, the presence of a temperature control mode and case materials. But the first and foremost factor is performance. The higher the vapor performance of an electronic cigarette, the more expensive it is.
The cost of an electronic cigarette can also be affected by an unusual design, high battery capacity, the presence of a thermal control mode and high power of the device.
GidMarket analysts suggest that the spread of prices for electronic cigarettes in the regions is similar to the spread of prices for regular imported cigarettes according to Rosstat.
Part 8. Forecast of the development of the market for electronic cigarettes until 2026
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Part 9. Recommendations and conclusions
Until 2019, the electronic cigarette market showed active growth by an average of …% in real terms. In 2020, for the first time in the study period, the market shrank by …% due to a reduction in imports amid the pandemic and government regulation of the market. In 2021, the volume of the electronic cigarette market grew by …% due to the growth in imports of cheap electronic cigarettes from China.
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It should be noted that if earlier the buyers of such products were mainly young people (under 35), today their share is being eroded by older categories of consumers.
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For existing and new market operators, we note the following:
- the main problem of the marketing campaign for the product in question is the ban on advertising of liquids for electronic cigarettes. However, it is possible to distribute catalogs with a range of products at points of sale of cigarettes and electronic vaporizers;
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List of diagrams
Diagram 1. The ratio of imported and domestic products in the electronic cigarette market, 2017-2021, %
Diagram 2. Dynamics of the volume of the electronic cigarette market, 2017-2021, mln pcs.
Diagram 3. Revenue (net) from the sale of electronic cigarettes by union territories for 2017-2021, %
Chart 4. Dynamics of India's GDP, 2014–2021, % to the previous year
Chart 5. Monthly dynamics of the US dollar against the rupee, 2017-May 2022, Rs. for 1 US dollar
Diagram 6. Population dynamics in India, as of 01 Jan. 2013–2022, million people
Diagram 7. Dynamics of real incomes of the population of India, 2014–2021, % 12
Diagram 8. Industry life cycle stage
Diagram 9. Shares of the largest competitors in the electronic cigarette market in 2021, %
Diagram 10. The volume and dynamics of imports of electronic cigarettes in physical terms, 2017-2021, thousand pieces
Chart 11. The volume and dynamics of imports of electronic cigarettes in monetary terms, 2017-2021, thousand US dollars
Diagram 12. Dynamics of export of electronic cigarettes in physical terms, 2017-2021, thousand pieces
Chart 13. Dynamics of export of electronic cigarettes in monetary terms, 2017-2021, thousand US dollars
Diagram 14. Balance of exports and imports, 2017-2021, million Rs.
Chart 15. Structure of exports by countries in 2021, %
Diagram 16. Dynamics of consumption of electronic cigarettes in physical terms, 2017-2021, Rs./person
Diagram 17. Forecast of the market size in 2022-2026, million units
List of tables
Table 1. Expert forecasts for the decline in real GDP in India in 2022, %
Table 2. STEP analysis of factors affecting the e-cigarette market
Table 3. The main companies participating in the electronic cigarette market in 2021
Table 4. Profiles of companies participating in the electronic cigarette market in 2021
Table 5. Structure of imports of electronic cigarettes by importing countries in 2021
Table 6. Tenders for the purchase of electronic cigarettes announced 2021-Apr. 2022
Table 7. Average consumer prices in the e-cigarette market by Indian states, Rs/pcs, 2021
Table 8. Assessment of factors of investment attractiveness of the electronic cigarette market
Table 9. Forecast indicators of the development of the Indian economy
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