The electronic cigarette market in Italy

The electronic cigarette is an electronic device created with the aim of providing an alternative tothe consumption of tobacco products (cigarettes, cigars and pipes) that replicates the mimicry andsensory perceptions of the latter. Also known as e-cigarettes, these devices have made up one of thefastest growing segments of tobacco products in the last decade.

The global e-eigarette market was estimated at 14 billion USD in 2019 and is expected to reach 45billion USD by 2026 growing at a CAGR of 17% over the same period.

Italy is one of the five countries with the most e-cigarettes users in Europe, together with France,Germany and Poland. In the Italian case, the e-cig market is one of the most dynamic and developedin Europe, with an incidence of users equal to 2.6% of the adult population.

The main driver of demand for this product is the increasing number of smokers who try to quittheir habit though the substitution of cigarettes with e-cigarettes. The availability of flavors andnicotine levels is indeed so varied now that potentially any smoker can find an alternative. As aresult, many large tobacco companies over the last decade have not only developed their ownelectronic cigarette brands, but also acquired existing companies.

The increased awareness of thepotential of electronic cigarettes and these large amounts of money, poured in by investors, haveresulted in large marketing budgets for companies in this sector which have contributed to furtherenlarge the potential user base for these devices. The e-cigarettes sector in Italy seems to have reacted positively even to the taxation suddenly increased by the State about two and a half years ago. The growing number of users of thesedevices continues indeed to be such as to make investments in this market still very interesting.