A few months ago our editorial staff participated in a study led by Euromonitor International concerning vaping products and tobacco heated in Belgium. Today, we are unveiling to you the report that was made on this subject.
VAPOTAGE PRODUCTS AND MARKET DEVELOPMENT IN BELGIUM
Regarding 2016 in Belgium, vaping products recorded a growth of 19% to reach a turnover of 49 million euros. It is in large part thanks to innovations and “open” vaping systems that this figure has been reached. The e-liquid market remains the most dynamic with growth of 25%.TRENDS
- Vaping products arrived in Belgium around 2009. This new market grew rapidly during the period studied but remains of lesser importance compared to that of tobacco. In 2016, sales amounted to approximately 49 million euros.
- Thanks to important innovations and the arrival of new consumers, vaping products recorded strong growth of around 19% in 2016. The prevalence of vaping in the adult population is around 9%.
- So-called “open” vaping systems accounted for the largest share of sales in 2016 and posted growth of 20%. The main driver of this performance is innovation, with new products launched every month. “Open” vaping systems represent the third generation, with other products such as cig-a-likes gradually disappearing in Belgium.
- Most vapers in Belgium use nicotine e-liquids, this proportion being estimated at 70%. It should be noted that the sale of nicotine e-liquids was prohibited in all stores except in pharmacies until May 2016.
- Although most of the vaping products available in Belgium are imported from China, the importance of innovations drove prices up in 2016.
- The demand for fruit flavored and “organic” e-liquids increased in 2015 and 2016. In this sense, we can consider that users will probably continue to vape even if they stop consuming e-liquids containing nicotine.
- Although vaping products remain a very small category in Belgium, forecasts show that sales are expected to increase due to the growing awareness among smokers of electronic cigarettes as an alternative. The continued rise in the average price of cigarettes is also a point that confirms the forecasts.
- In Belgium, most vapers use e-cigarettes to quit smoking. According to commercial sources, some are able to completely quit all nicotine consumption in just a few months, while others continue to use vaping products for pleasure because they find they like them or for the sake of reducing consumption. risks.
- Belgium transposed the European directive on tobacco products (TPD2) into its national legislation in March 2016. The Council of State then suspended it in April 2016. The new legislation finally entered into force in January 2017. The expected negative effects of this new law did not ultimately have an impact in 2016 but should have some in 2017.
- The so-called “closed” systems were not available in Belgium in 2016. However, the evolution of the legislation, which will mainly affect the so-called “open” systems, will probably encourage manufacturers to launch closed systems in Belgium. According to trade sources, some "closed systems" would perfectly meet the requirements imposed by the new legislation on vaping products.
-After the implementation of the new legislation, several “open” vaping products will be withdrawn from the market. Such uncertainty, coupled with the ban on online advertising and sales, is likely to be a barrier to entry for new consumers.
- Manufacturers and sellers, however, are likely to react quickly to environmental developments and launch products adapted to new regulations. In the short term, the category should experience a slowdown. In 2017, vaping products are expected to register weak growth which will nonetheless resume in 2018.
COMPETITIVE LANDSCAPE
- In Belgium, vaping products are part of a very fragmented category with an ever growing number of manufacturers and sellers offering many brands at different prices. There is no clear leader in the category and this high level of fragmentation has also had a negative impact on profit margins.
There are currently no companies belonging to the tobacco industry offering electronic cigarettes in Belgium because tobacco companies are waiting for a clarification of the legal framework before entering the market. Also, the current size of the category does not justify heavy spending on research and development or new product launches. Companies such as Japan Tobacco and Philip Morris are developing their own versions of vaping products which they are testing in key markets, although no commercial launches are expected in Belgium in the near future. According to these major players, sales of vaping products are still too low in Belgium to arouse their interest. On the other hand, these companies could launch heated tobacco products in the country.
- While most “open” vaping systems are made in China, e-liquids mainly come from France or other European countries. The production of e-liquids remains very limited in Belgium.
- The new legislation on vaping products that came into force in January 2017 should favor the big players to the detriment of the small ones. Thus, the category is expected to see the demise of some companies and become less fragmented during the forecast period.
DISTRIBUTION
- The distribution of nicotine vaping products has been officially authorized in pharmacies until May 2016. Since May 2016, it is legal to sell nicotine e-liquids in any type of point of sale.
- In recent years, many small entrepreneurs have created e-commerce sites in Belgium, online sales representing 15% of sales of vaping products in 2016. However, sales of vaping products have been banned on the internet since early 2017. This change is likely to create uncertainty and force e-merchants to cease their activities or redirect them to their physical stores.
- Retailers such as New Smoke, with seven dealers in Brussels, are already setting up a franchise concept in order to establish themselves even more quickly in Belgium. The Vapor Shop for example already has more than 20 points of sale in Belgium.
CATEGORY INDICATORS
CONSULT THE ORIGINAL EUROMONITOR INTERNATIONAL REPORT
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