E-cigarette sales have taken a precipitous fall over the past few months, suggesting that the boom times of the industry’s early days are coming to an end. Data collected by Neilsen shows that sales of some types of e-cigs have fallen by nearly a quarter since early August of this year. Whether it’s a sign of long term trouble for the vaping industry remains to be seen, but it’s certainly worrisome for some industry insiders. Revenues have grown annually by 114% per year over the past five years, according to data from research firm Euromonitor International. Although slowing is to be expected as the industry matures, this could be a sign of larger problems.
Sales of cig-a-like devices have fallen 21% over the past few months, with sales of refillable vaporizers apparently falling by an even greater rate, according to a Wall Street Journal story. Even with the slowdowns, vaporizers should grow by about 51% year over year in 2016, Euromonitor says.
There’s Still BIG GROWTH
This seems like bad news, but the confusing part is that the WSJ story seems to tell two different stories: one, that electronic cigarettes are doomed, but another with growth numbers that most industries would kill to attain. Few industries see growth rates like those in the vaping industry, and with 57% revenue growth expected in 2016, that’s still an explosive rate of expansion.
These issues with the WSJ story were not missed by commenters on Reddit, who blasted it for missing the bigger news. Commenter “VaporBoy” says the writing was already on the wall:
I think the industry still has growth, it’s just not on par with the extreme supply. While sales are still growing, I think there’s a saturation issue, and it’s offset by the number of shops/wholesalers/juice makers opening, making it appear as if the industry is collapsing.
Others seemed to agree, like “mr_willishot” who points out that quality is improving:
A lot of folks that would/will switch have already switched, and a lot of those same folks are happy with their first mod that gives them just enough vapor and power. Not everyone is buying the newest mod with bigger this and better that.
Vaping Not For Convenience
The WSJ article does make a few assumptions based upon the experiences of convenience store owners and corporate executives. For one thing, most convenience stores are selling commercially produced e-cigarette brands, which by and large have received poor ratings for quality and support — something that has been a source of consternation among vape shop owners.
The evidence does seem anecdotal, rather than hard evidence from the tens of thousands of vape shops nationwide, which are by and large selling higher quality products. Cig-a-likes and cheap, refillable vaporizers are only one part of the business — one that many vapers move away from quickly. Assuming that the entire industry is failing from this data seems foolish.
While the WSJ mentions one vape shop owner who sees a slowdown, it does little else to explain it. Industry insiders have been saying that the biggest problem is the number of vape shops that are popping up around the country. The number is growing at a rate faster than the number of new customers, meaning that the number of potential sales for each store is getting smaller.
So it might look like things are slowing down in the vaping industry, but in reality there are just more options for the consumer to choose from, which isn’t a bad thing.
Many people expect 2016 to be a year of consolidation; where the pretenders are separated from the contenders. Businesses that don’t offer value, along with high-quality products and excellent customer service are likely to fail. While it’s a sad thing to see, it’s a necessary part of the business cycle.
Maybe E-Cigs Are Working?
Also, one item that may be getting overlooked is that maybe, just maybe, vaping is doing what a lot of us thought it would do: get people off both cigarettes and nicotine altogether.
I know plenty of people who have quit vaping, not because they went back to cigarettes but because they just didn’t need it anymore. Face it: vaping is still a crutch, just like the patch or nicotine gum. It just so happens that vaping is more successful at helping people quit.
If that’s the case, maybe we should be cheering the fact that e-cig sales are shrinking a bit, because it means as a whole people are leading more healthier lives as a result.