Chinese E-Cigarettes Fueling Growth in Russia’s Vape Market
The Russian vape market has experienced significant growth in recent years, particularly due to the withdrawal of European and American tobacco manufacturers and the gradual reduction of foreign e-cigarette brands doing business in Russia as a result of its war with Ukraine. This situation has created a unique opportunity for Chinese e-cigarettes to expand their presence in Russia. In this article, we’ll discuss how China is fueling the growth of Russia’s vape market and the potential impact on the global e-cigarette industry.
The Impact of International Withdrawals on Russia’s Tobacco Market
Sharp Increase in Tobacco Product Prices
Russia’s tobacco industry relies heavily on the support and investment of foreign brands. With the withdrawal of international tobacco companies, a large shortage in the Russian tobacco market is expected. This shortage will likely lead to a sharp increase in the price of tobacco products sold in Russia, according to iGeekPhone.
E-Cigarettes: A Potential Alternative
E-cigarettes have great potential as alternatives to the traditional tobacco market in Russia, where e-cigarette consumers account for 6.8 percent of the total number of smokers. After the United States and Europe, Russia is the world’s third-largest importer of electronic nicotine delivery systems (ENDS).
The Rise of Chinese E-Cigarettes in Russia
China’s Dominance in the Global E-Cigarette Market
China accounts for 90 percent of the global e-cigarette market. In 2021, China’s exports to Russia reached 82.5 billion rubles. This year, it could increase by 35 percent to 111 billion rubles.
The Growth of E-Cigarette Retailers in Russia
By the end of 2021, there were more than 5,000 stores selling e-cigarettes in Russia, including more than 1,100 in the Moscow region. According to real estate platform DNA REALTY, the number of tobacco shops in Russia grew by at least 20 percent in 2022, with the bulk of their profits coming from e-cigarette sales.
Major Tobacco Companies Exiting the Russian Market
British American Tobacco (BAT)
BAT announced its withdrawal from the Russian and Belarusian tobacco markets in 2023.
Philip Morris International (PMI) and Fimo International
PMI and its subsidiary, Fimo International, are also considering retaining their business in Russia because Russia is the seventh-largest tobacco market for PMI.
Japan Tobacco and Imperial Brands
Japan Tobacco suspended investments in Russia, while Imperial Brands transferred its Russian operations to a successor in Russia.
Conclusion
The withdrawal of European and American tobacco manufacturers from the Russian market has paved the way for Chinese e-cigarette companies to fill the void. With the potential for continued growth in Russia’s vape market, it remains to be seen how this will impact the global e-cigarette industry in the long term. However, one thing is clear: China’s influence on Russia’s vape market is only expected to grow.
FAQs
- Why are European and American tobacco manufacturers withdrawing from Russia? They are withdrawing due to the ongoing war between Russia and Ukraine, which has led to economic sanctions and negative public opinion towards these companies.
- How is China benefiting from the withdrawal of international tobacco companies? China is benefiting by increasing its e-cigarette exports to Russia and filling the void left by the withdrawal of these companies.
- What is the current state of the e-cigarette market in Russia? The e-cigarette market in Russia is growing rapidly, with over 5,000 stores selling e-cigarettes and a 20 percent growth in the number of tobacco shops in 2022.
- What percentage of the global e-cigarette market does China account for? China accounts for 90 percent of the global e-cigarette market.
- How much are China’s e-cigarette exports to Russia expected to increase this year? China’s e-cigarette exports to Russia are expected to increase by 35 percent, reaching 111 billion rubles.
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