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The Economics of Vaping: Market Growth and Consumer Spending Habits

by Abrar Ahmed 10 May 2024

The vaping industry is progressively growing in the UK. As the number of consumers increases, so does the number of vaping products. According to a report published by the UKVIA, over the past year alone, the UK vape industry has grown by 23.4%, reaching £1.325bn, seeing a massive increase of £251m.

The vaping sector is now multi-billion-pound, with thousands of workers in retail shops, manufacturing departments, and warehouses. In 2021, an estimated 17,700 workers were employed in the vaping industry, moving to 18,900 in 2024.

According to Owen Good, the Head of the Economy Advisor, the findings and the economic report show that the e-cigarette industry is a fast-growing disruptive sector. This sector's success lies in the growth of both in-store and online shops. Even the COVID-19 pandemic hasn’t affected this industry much.

Let’s dig deep into the economy and explore consumer spending habits in vaping!

Exploring the Economic Landscape of Vaping:

Vape market growth

With impressive growth in sales of vaping products, the vaping industry contributes to the global economy. In a survey conducted by the UK government in July 2023:

  • 1 in 8 (12%) UK adults reported that they were vapers at a very young age. 54% of consumers used reusable vape products
  • 43% were disposable vape users. 
  • Also, the sales report shows that 61% of products are sold through a local shop, while 39% of people prefer online retailers. 

Another report by the UK government indicates that disposable kits are trending vapes rather than reusable kits, considering their cost, availability, and familiarity. Reusable products, on the other hand, are popular among seasoned vapers, considering the variety of e-liquids, coils, and other vape accessories.

According to this report, disposable vape users' purchasing behaviour differed from that of reusable vape users. Most users reported purchasing disposable vapes in local shops (61%), while most preferred buying reusable products online (39%). 67% of disposable product users cited the convenience of buying disposable products at a specific location. Users of reusable products were likelier to buy from places that stocked the types of vapes or e-liquids they like to use (58%).

Navigating the Growth of the Vaping Market:

Vape market growth

The Centre for Economics and Business Research has shown some indicators for the vaping sector, such as GVA and employment statistics. A report by Cebr shows an impressive 61% growth in the number of best vapes in the UK, and the number of shops has grown significantly. 

The growing demand for e-cigarettes, e-liquids, and other vape accessories is the main reason behind the vaping sector's continuous growth. According to a report by Grand View Research, the booming business was estimated at USD 28.17 billion in 2023 and is expected to grow 30.6% from 2023 to 2030.

Vaping is rapidly growing as the number of smokers decreases. Many people find smoking as a less harmful and the most perfect alternative to smoking. By 2023, 57% of the vapers had quit smoking, with the number likely to increase to 59% in 2024. Furthermore, 59% of smokers reduced their tobacco use, which is one of the key reasons they stopped smoking traditional cigarettes.

A 2018 National Academies of Sciences, Engineering, and Medicine report showed strong evidence that vapes expose users to hazardous compounds at a much lower rate than traditional cigarettes do; new research indicates that the health effects may not end there. Considering how recently the products have been on the market, there’s still a debate on vaping vs smoking. Which one is better? Further investigation is required to assess the short and long-term health effects of e-cigarettes.

According to the Tobacco Reporter, the country had 3573 vape shops in January 2023. This is indicative of the growing demand for vaping products in the UK. It is also a sign of the huge potential of the vaping market, which could lead to even more growth in the future.

Exploring the Financial Flow of Consumer Vaping Choices:

Vape market growth

As rates of use increase, the frequency of more users indicates that people are using vapes habitually. According to the 2020 NYT survey, 38.9% of high school vapers are using vapes for more than 20 days a month, and the projection has risen to 42% in 2024. Thus, middle and high school students are using e-cigarettes more frequently.

The Telegraph reported that people under age 26 spend up to £2,700 a year on disposable vapes to satisfy their cravings. They usually buy it daily and spend £5 and £10 each. It affects much after Rishi Sunak’s (member of the Conservative Party) statement of banning the use of vapes on 14 or lower age children.

Vape market growth

"We must act before it becomes endemic, so we will also bring forward measures to restrict the availability of vapes to our children, looking at flavours, packaging, and disposable vapes," the Prime Minister said, reiterating that combating the rise in youth vaping is a top government priority.

The UK vaping industry is evolving. It seems worth about £1.2bn and is expected to reach £1.4bn in the next three years. According to the Office for National Statistics Data, the average cost of a pack of cigarettes has increased by 26.6% in the UK in the past two years. Juul Labs conducted a study recently that indicates an average smoker who smokes nine cigarettes a day might save over £1,400 a year if they switch to vapes. Smoking is an extremely costly habit.

Wrapping Up!

Based on the statistics, the UK vaping industry is developing more every year. One of the main reasons behind this is the addition of more products, such as e-liquids, flavours, and other vape accessories. Another reason may be a huge increase in the number of online vape shops and physical stores in the UK. This creates a huge demand for vaping products, leading to the industry's growth. Additionally, the health benefits of vaping are becoming more and more apparent, making it an attractive option for many.

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