E-Liquid Market Report

To increase their consumer base, e-cigarette manufacturers are introducing new device configurations and products at low pricing. Modular e-cigarettes are becoming more popular due to the customization options available, which allow users to interchange parts such as atomizers, coils and battery mods to get the desired flavour and enhance the vaping experience. The growing Do-it-Yourself (DIY) trend in the industry, in which users may develop their own e-liquid by combining various flavors, is driving market expansion over the forecast period. The availability of e-liquids with multiple nicotine strengths, such as 3 mg, 6 mg, 12 mg and 24 mg, allowing users to choose their e-liquids according to their requirements, is also gaining a large market consumer base. Expanding supermarket chains are fuelling the segment's rise in the global e-liquid market. Supermarkets have established consumer trust through convenient services and attractive offers. Furthermore, the majority of consumers prefer one brand over another, which is often available in supermarkets.

Additionally, the booming e-commerce and direct-to-consumer (DTC) channels are reshaping the e-liquid market by eliminating traditional retail barriers. Brands such as Naked 100 and Ruthless Vapor are leveraging online platforms to bypass physical store limitations, reaching global audiences directly. This digital shift allows for streamlined purchasing, personalized marketing, and real-time customer engagement. By harnessing DTC strategies and robust online presence, e-liquid companies can offer tailored experiences, build dedicated customer bases, and adapt swiftly to market trends, thus capitalizing on the expanding digital marketplace and driving growth beyond conventional retail constraints.

Around the world, governments are enforcing stricter regulations on nicotine levels in e-liquids, with the European Union's Tobacco Products Directive (TPD) taking the lead by setting a limit of 20 mg/ml for nicotine concentrations. This rule is changing the e-liquid industry, requiring companies to adjust their product formulations. For instance, well-known e-liquid companies such as Dinner Lady and Black Note need to modify their high-nicotine products to comply with this limit. This change forces brands to strike a balance between keeping their attractiveness in the market and following strict regulations, which affects product development and choices for consumers. Governments' strict regulations on the use of e-liquids, are projected to limit market growth.

Furthermore, the FDA has increased its regulatory oversight by implementing stricter labelling and packaging rules for e-liquids. This involves providing detailed ingredient information, clear health alerts, and required child-proof packaging. For instance, companies such as Juul Labs and Vuse are had strict compliance challenges in June 2024 that entail revamping their product labels and investing in tamper-resistant packaging. These rules intend to enhance consumer protection and clarity, encouraging e-liquid producers to quickly adjust or potentially encounter legal and market obstacles.

Innovative advancements and partnerships in the e-liquid industry are essential for fostering creativity, improving product range, and addressing regulatory hurdles. Collaborating with tech companies can result in innovative formulas, and forming partnerships with distributors can broaden market coverage. These partnerships assist e-liquid companies in remaining competitive, satisfying changing consumer needs, and abiding by strict regulations. For instance, in June 2024, Vaping trendsetter URBAN TALE lands the US with nicotine salt e-liquid in 12 flavours. In a co-brand partnership with LOST MARY, the e-liquid collection is tailored for American adult vapers, offering a curated selection sourced from the bestselling flavors under the world-renowned LOST MARY brand. In addition, in march 2023, Britain-based company Aquios Labs, a leader in the field, has developed a water-based technology and launched a commercial product in cooperation with INNOKIN Technology, to offer smokers a better smoking experience. It is something the world has been waiting for. Unlike traditional vapes, the e-liquid in AQ30 water-based vapes is 30% water. The high-water content was made possible through a specialised formulation process developed by Aquios Labs and a new hardware design developed by Innokin.

North America dominated the e-liquid market, accounting for the highest revenue share. This is owing to the presence of key vendors in the region, including JUUL Laboratories, Inc., Philip Morris International Inc., Turning Point Brands, Inc. and Nicquid. The Centres for Disease Control and Prevention (CDC) reported in 2023 that over 2.06 million middle and high school students in the United States smoked e-cigarettes over a 30-day period, including 2.8% of middle school students and 11.3% of high school students. E-cigarettes account for a sizable portion of the tobacco products market. Presently, over 3,000 e-cigarette flavours are available in the US market. Additionally, these vendors are focusing on expanding their revenue footprint in the region through mergers and acquisitions. This trend is projected to continue to fuel market expansion in North America.

The Asia Pacific regional market is anticipated to grow significantly throughout the forecast period. This is owing to the rising number of lung cancer cases caused by tobacco smoking, as well as the general assumption that e-cigarettes and e-liquids are safer than regular cigarettes. Additionally, the high taxes levied on tobacco cigarettes in Japan are expected to encourage smokers to shift to e-cigarettes, boosting industry development.