In 2024, the global novel nicotine product market is projected to reach $65 billion with 120 million users worldwide. This growth, while substantial, is distributed unevenly across regions. Data from the ECigIntelligence Global Database, released in September 2024, reveals that vapes dominate the North American market. However, nicotine pouches are the fastest-growing product with an annual growth rate of 80%. The vape market share in North America increased by 14%, while heated tobacco products (HT) saw a 38% growth rate.
In contrast, South America shows little to no activity in the novel nicotine market due to stringent regulations and widespread bans on tobacco and nicotine products. In Europe, the Middle East, Africa, and Asia Pacific (EMEA), there are a mix of vapes, heated tobacco, and nicotine pouches. Nicotine pouches lead in annual growth within the EMEA region at 50%, followed by heated tobacco at 31% and vapes at 15%.
Despite the significant growth in novel nicotine products in terms of market share and annual growth rate, illicit nicotine products, particularly vapes, pose a major obstacle to progress.
“The illicit market is huge in many countries, particularly in the vape sector. We’re also seeing illicit activity in nicotine pouches and heated tobacco. Illicit trade is an existential problem for the vape industry,” said Tim Phillips, Founder and Managing Director of ECigIntelligence, during the recently concluded 2024 E-Cigarette Summit in the United Kingdom.
Phillips noted that illicit vapes are creating widespread concern among consumers and parents, contributing to a perception of the industry being out of control.
“In the U.K., we see this all the time — many shops appear to be selling illicit products due to a lack of regulatory control,” he said.
He further highlighted the difficulty in regulating the illicit vape market.
“We’ve attempted various methods to measure the size of the illicit vape market. Our findings show that, on average, 60% of the vape market is illicit. This was determined by analysing the tax revenues collected from the vape market in Europe in 2022, which accounted for only 40% of the expected amount,” added Phillips.
The online marketplace has also emerged as a hotspot for illicit nicotine trade, primarily due to lax restrictions in some countries.
“In several European countries, bans on online sales are in place. However, in markets where online vape sales are permitted, consumers tend to purchase products directly from websites within their own countries. In countries with online sales bans, consumers often turn to websites based in countries without restrictions, thereby fueling the illicit market,” he explained.
Tom Freeman, the Director of the Addiction and Mental Health Group Department of Psychology at the University of Bath, said that vaping could help replace smoking but poor regulation has opened the floodgates to illicit vape products.
Phillips warned that failure to regulate the illicit vape market could lead to blanket bans on all vape products, including safer, legal options, thus undermining efforts to reduce the harm caused by smoking combustible tobacco products.
“To understand why the illicit vape market exists, we must recognise that vaping is still relatively new, and many regulatory authorities struggle to comprehend it fully. The sector is highly fragmented with thousands of rapidly evolving products making regulation and tracking difficult,” Phillips said.
However, he noted that some progress is being made. Measures such as increased enforcement, taxation of illicit vapes to improve tracking, and retail licensing are already being implemented in the U.K. to monitor the market and its products.
