Challenges and Potential for success on the Latin American e-cigarette market
The 2016 global e-cigarette market is estimated at $9 billion and is expected to grow at a compound annual growth rate (CAGR) of about 21.9% over the 2016-2025 period to reach a value of $53.8 billion by 2025. However, the Latin American market accounted for less than $0.12 billion or approximately 1.23% of the worldwide e-cigarette market in 2014 and is projected to reach $0.19 billion by 2019, thereby undergoing a CAGR increase of about 10.8% over the forecast period. Both the volume and the growth rate of the Latin American market are far below respective figures for other major regional markets. These facts demonstrate both challenges and potential for success in Latin America.
The consumer base (number of smokers) in Latin America is estimated to be higher among all regions across the globe due to the presence of a relatively large youth population, which is estimated by UNICEF as 106 million individuals between the ages of 15 and 24 living in Latin America and the Caribbean—20% of the total population. It is the largest proportion of young people ever in the region’s history.
Increasing health concerns among this consumer base and entry of Big Tobacco into this particular domain are major factors that are going to change the market dynamics for the e-cigarette market in the coming years.
Irrespective of the absence of definite industry policies and product-related market restrictions in some of the major regions across the globe, the demand is bound to show a positive trend over the next 5 years. The other factors contributing to the growth of this market are the ease of use and multiple benefits associated with the e-cigarette market over traditional tobacco products.
As elsewhere, growth of the e-cig market in Latin America is inhibited by disagreement in the scientific community over the impact of e-cigarettes, lack of industry standards, and lack of definitive government policy. Health concerns led a number of Latin American countries (Brazil, Argentina, Colombia, Uruguay, Mexico, Venezuela, Panama) to completely ban e-cigarettes.
Another significant factor impeding regional market development is abundance of counterfeit products, estimated in 2014 at 2.83% of the total market and growing.
However, a significant number of countries (including Aruba, Dominican Republic, Chile, Costa Rica, Cuba, Ecuador, Paraguay, Peru, Puerto Rico, Uruguay) allow sales of e-cigarettes with various restrictions discussed in detail in this report. Even the countries that ban e-cigarettes today could lift the ban in the future as debates on their utility in fighting smoking continue (in Mexico, for example). The 2015 combined population of countries that allow e-cig sales is about 110 million, or about one-third of the US population.
Each of these countries is discussed in detail in this report. It includes assessment of demographic data and population growth trends; overall economy and business climate; smoke prevalence and tobacco industry; trade agreements; tobacco regulations; e-cig market, tax, regulations; and market landscape. Each section ends with conclusions that include descriptions of promising ways for market penetration.
The estimated consumption of e-cigarette products is expected to grow for disposable e-cigarette models, and rechargeable and disposable cartomizers. Today, raw materials for e-cig production are procured mostly from China. Assembly is done based on the specific local requirements, with packaging playing an important role. Reselling is done under Chinese brands or rebranded as per the company name. Sales are achieved through internet or local vape shops.
Data in this report is based on extensive market intelligence, interviews with industry and regional experts, as well as exhaustive study and analysis of data from multiple open sources.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook