Is the Electronic Cigarette Market Taking Off?
Electronic cigarette is gaining popularity globally and while many smokers are stepping up their use of this product, companies that sell the item are increasing substantially in profits. Yet though the product is almost new on the market, sellers are finding various ways to market it and thus grow their business.
In some countries, electronic cigarette has taken precedence over tobacco brands. The main reason for why smokers are now turning to the electronic product is lower health issues, according to claims made by manufacturers.
In the US, the Food and Drug Administration has placed an age limit on e-cigarette and anyone caught selling a minor the product can face charges. In addition, the Food and Drug Administration also warn manufacturers to place on each e-cigar to be sold to the public labels warning them about the dangers of cigarette smoking. Furthermore, no manufacturer can make any claim that has to do with health issues without backing up that claim with scientific evidence. To protect the public, dozens of states in the US are making and placing regulations on e-cigars dealers with one of the main regulations having to do with the prevention of cigarette sales to minors. The executive director of Smoke Free Alternatives Trade Association Cynthia Cabrera says, “the industry has no problem with regulations. The industry has a problem with inappropriate regulation.” She also added, “if you have regulation that stifles this market, that’s not a good thing.”
Unlike other states that levy a lower tax on e-cigarette, Minnesota is charging the same taxes charged on traditional tobacco items. While e-cigs are selling steady in stores, smokers are also turning to online buying, which according to some is much easier since they can stay at home, place their order and have their package deliver to them in a few days, or in some instances even within hours.
Prices for e-cigs vary in US stores because of competition. A 510 T e-cig kit will cost anywhere in the region of $60 - $80, 901 T e-cig kit will go for $50 - $70 and an Ego tank kit for about $90 - $120. One can get an electronic cigarette to buy for as low as $2, of course this all depends on which store he or she shops.
Since e-cigarettes are making a splash in the market, some investors are paying millions to get in on the action. Silicon Valley businessperson Sean Parker is contemplating investing a whopping $75 million in the industry in the hope of making large profits. Other mammoth companies such as Altria Group Inc, Reynolds American Inc and Lorillard Inc are pumping more into the e-cigarette business. Sale of traditional tobacco items are on the decrease since large companies are spending huge sums in investment on the electronic products.
Since the public is getting into the e-cig market more, companies are gearing up to take advantage of this industry. Cigarette experts argue that e-cigs might prove a good way to lower the addiction of traditional cigarettes, which in turn would lower the risk of lung cancer.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.