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Is the vaping market too fragmented?
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Mark Benson Offline
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Post: #1
Is the vaping market too fragmented?
While the vaping industry has been around in some shape or form for many years now, it is only really since the start of the century that it has moved into the mass market. This is an industry which is expected to be worth in excess of $2 billion during 2015 in the US alone with the European market also growing in size and stature. There is no doubt that development has been at lightning fast pace and new products and flavours seem to be announced on a daily basis. However, there is growing concern that the market is too fragmented and will need to go through a bout of consolidation to fight the challenges from critics and the tobacco sector.

The power of the Internet

It may be debatable as to whether the market is too fragmented but there is no doubt that the Internet has allowed companies which would probably have gone unnoticed prior to the online revolution to now rank for valuable keywords. The fact that there are so many small to medium-size companies fighting for an online presence, keeping their cost base to a minimum, has created enormous choice for the consumer.

Critics and supporters of the vaping industry recognise that while the growth and development of the sector has been extremely fast to date there will inevitably be a period of consolidation.

Is consolidation good for the industry?

There are literally thousands of electronic cigarette companies around the world from the very small niche market players to those who have their tentacles across the worldwide market. History shows us that new technology and new services tend to mushroom in their early days and then undergo a period of consolidation when competition gets too intense. We have to a certain extent seen the beginning of this consolidation with tobacco companies taking stakes and buying some electronic cigarette companies outright. This is something of a special situation because of the challenge to tobacco cigarettes but nonetheless it is a clear sign that consolidation will come in due course.

There will always be a wide array of products available across the vaping industry from the stack them high and sell them cheap products to the more discerning quality items at the higher end of the price spectrum. In simple terms, these companies at the farthest ends of the spectrum are giving customers what they need and those in the middle are also fulfilling demand. However, consolidating relatively small companies to make a larger more financially stable operation has benefits for all parties in the long-term.

Finance is the key

To date the majority of finance raised by electronic cigarette companies has been invested directly into their operations. A mixture of increased capacity and advertising spend has pushed many companies into the limelight. However, the situation is changing with regulatory challenges, competition on all fronts and the reality that it will cost cold hard cash to fight the critics and tobacco industry in the future.

The industry is now moving towards the mass market and this brings with it an array of new costs and exposure. It will be interesting to see which companies merge together, which are taken over and which fall by the wayside. At the end of the day it will come down to the quality of products on offer and the individual company’s ability to keep up with the latest developments and consumer trends. Those with a swift turn of foot will grow stronger but those perhaps struggling to keep pace could have their future taken out of their hands by the investment vultures.

For more information on OK Electronic Cigarettes and the various products available please visit the OKCigs website.
11-03-2015 05:51 PM
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Chuck-Drl (11-22-2019), Michael (03-11-2015), Robjenko (03-11-2015), Spasmod (03-11-2015)
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RE: Is the vaping market too fragmented?
Excellent, thought provoking article Mark!
11-03-2015 07:40 PM
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ecignut Offline
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RE: Is the vaping market too fragmented?
This thread was started before I joined the forum but even now nearly 5 years down the line it is very relevant. I think it is still rather fragmented  but of course it is so much bigger in spite of all the negativity. It is also still a relatively new industry and moving fast. Moving fast will keep it fragmented for a while yet I think.
18-11-2019 08:01 PM
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Don (11-18-2019)
Chuck-Drl Offline
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RE: Is the vaping market too fragmented?
The vast welth of small companies that have made the web their home market is in some respects a marvelous thing to see , on the other hand it is incredibly difficult for any online vendor to be 100% accurate with age verification .
The major battle at the moment is keeping vape products out of the hands of underage persons . With the recent rash of ' "vape " related illness casting a negative light on the whole of the vape infustry we are certainly facing a rocky patch even with the current US stand down on flavor bans .

I find it less than surprising that outsiders are so easily manipulated by trash media . Lets look at the facts , the vape world has grown from a world of little known cartomizers and cig-alikes to a massive industry sporting mechanical mods of various cell size , regulated mods that can produce in excess of 200w , dozens of coil designs capable of fogging out a room and amongst all of this ex-smoker/vapers wer not only able to claim but prove increased vitality .
Now comes all these pod devices , most prominant the Juul and along with these sudden vape illnesses . A bit of reserch that excludes mass media will actually show links between pod devices being indicated in vape related illness and major tobacco distribution ie R.J. Reynolds/ Philip Morris sho are specificaly targeted in legal suit . It all makes me wonder if big tobacco is trying to sabotage the vape industry .
The industry being fragmented could be a good thing in ideal circumstances ,leave room for growth . unfortunately under current scrutiny many small companies may not endure .
We are in for a fight yet , lay down and be run over or stand an fight . In the end we may be pissing in the wind ,but when our story is told the smell of our piss will be to strong to deny we were there .

Dogs have owners , Cats have staff .
21-11-2019 01:09 AM
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RE: Is the vaping market too fragmented?
I have wondered sabotage for a while now, but then I polish my tin foil hat on the regular.
21-11-2019 02:54 AM
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TinWhisker Offline
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RE: Is the vaping market too fragmented?
(21-11-2019 01:09 AM)Chuck-Drl Wrote:  The major battle at the moment is keeping vape products out of the hands of underage persons .

The actual major battle is keeping the government from succeeding in destroying the vaping industry. The focus on minors and vaping is simply one of the tactics being employed. Sure, vaping by people under the legal age is an undesirable situation, but to use that as an argument to eradicate vaping? Horse shit. The tainted THC cartridge scandal was unable to kill vaping, especially since the illnesses and deaths can no longer be linked to nicotine vaping and instead shown to be the realm of the street vendor and THC pods. So, it is back to banning "for the kids' sake". If they actually meant that and had public interests in mind, then they would also be aggressively pursuing a ban on all tobacco. So the hypocrisy is clearly laid bare.

But the money generated by tobacco sales is too lucrative and even relied on for state budgets, so smoking is still encouraged. Since vaping cuts into that tax revenue stream, it must die.

JUUL is not our friend and I would like to see it fade away. It contributed to underage vaping more than any single element and frankly, it is because of them and the pods that we are facing this issue today. Pods were well-intentioned at first, but quickly became the justified symbol for youth vaping. Shame. It's even come out that JUUL intentionally targeted the youth market, which made things obviously only worse. "Traditional" vaping was doing just fine before the government and JUUL came along.
21-11-2019 04:00 PM
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