Illicit e-vapour is a USD47 billion industry. In 2024, USD7 out of every USD10 spent globally on e-vapour will be for illicit products. The fast growth of the illicit market is using all the oxygen for growth, suffocating the legal market. This report provides an overview of the global e-vapour market, focusing on the illicit market's developments and current status. It highlights the challenges and opportunities for the legal e-vapour market while addressing key issues affecting the industry.
Delivery
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Key Findings
The true demand for e-vapour products
Groundbreaking new research in Passport 2025 indicates that the total e-vapour market accounts for 13% of the industry. The illicit segment dominates, comprising over 76% of global e-vapour volume, fuelled by regulatory gaps and consumer preferences for options such as flavours and high nicotine concentrations.
Product gaps, enforcement and affordability are key
The primary driver behind the growth of the illicit market is the combination of overly restrictive legal frameworks that create a significant disparity between legal and non-compliant products, inadequate enforcement and a value disparity amongst products, leading consumers to seek non-compliant products to meet their demand in a convenient yet affordable manner.
Using the right levers to fight the illicit market
The drivers behind the illicit market can also be leveraged to tackle major issues within it, for example, by clearly defining responsibilities for enforcement agencies, increasing consumer education around product compliance, the impacts of illicit trade and health risks. Ensuring that legal products are viable options for consumers will help combat the illegal market.
Innovation, regulation and illicit markets are in constant tension
Innovation is also a key consideration when exploring potential strategies to combat the illicit market. Connected devices, blockchain in the supply chain, synthetic nicotine and alternative nicotine compounds are all issues that will create a more complex matrix over the coming years. In addition, there is also the emergence of new illicit products in RRPs, such as nicotine pouches.
Why read this report?
Key findings
Illicit/Non-compliant e-vapour represents a significant challenge
Defining and creating illicit e- vapour estimates
Three categories of market within Passport coverage
Regulatory landscape by country
Illicit market penetration reveals a troubling reality
Legal market stalls while illicit market grows
Middle East leads in terms of penetration and actual volume
Consumer demand is still on the rise, with increasing prevalence and consumption
Illicit market thrives in the shade of complex regulations
The enforcement dilemma: Tackling complexity in a rapidly evolving market
Product gaps are a key element in understanding the illicit market
Price and affordability are also factors in the equation
US: Narrow list of approved products creates demand surplus
UK: Category switching ahead of disposable bans already happening
South Korea: Synthetic nicotine drives experimentation in the illicit market
EU: Disposable bans need to balance consumer demand and enforcement
Brazil: Legislative inactivity allows illicit products to thrive
Impact on the nicotine industry, relapse and consumer perception.
Sizing the economic loss and potential gain in converting to legal
Transitioning consumers to the legal market and meeting consumer demand
Regulatory pressure/advancements and alternatives
New generation products and innovation
Next wave of illicit products
Key findings
Our expert’s view
Evolution of illicit/non-compliant nicotine
Questions we are asking
Nicotine
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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