Vaping Regulatory Conference South Africa

[craigb]

Erm, you do know you're wasted here don't you. Add a pie chart, a graph or two and a bit of female vaper cleavage, you'd have a great article for general MSM release....

Thanks for your insightful and erudite reply.

forget member of the month - I hereby nominate @RichJB as member of the year.

You know when you see he has posted, you will get solid maths and well reasoned opinion.

 

[Caveman]

I couldn't guess at the market size but I fear we're also reaching our limit quite quickly. Three factors inform this view:

1) Vaping is becoming more expensive. Mod and tank manufacturers, focusing naturally on the larger developed world markets, are sending juice consumption through the roof. Because their key customer base is a) wealthy and b) charged an arm and a leg for cigarettes. The price of smokes in the UK, for eg, is horrendous. Vaping costs, not so much. A few years ago, most vapers were puffing on 15W cigalikes that used 1-2ml of juice per day. The latest generation of 300W mods and multi-coil tanks will blow through 50ml of juice a day no problem. How many South Africans can afford R100-R150 of juice per day? And then things like batteries. Previous-gen vape gear used one battery. So you needed to buy 2x18650s max and you were set, even more so if you charged in the mod via USB. Now we have quad-cell mods where you need to buy 8x18650s and an external charger in order to have a set available all the time. Costs are skyrocketing. How much growth headroom is there, given the economic realities in SA?

2) I think there is a limit to how many smokers will turn to vaping. Many will but some won't. There is still growth potential but fewer people are starting smoking now. Look at the percentage of adult smokers now compared to, say, thirty years ago. This applies everywhere. In the UK in the 1950s, more than half the adult population smoked. When vaping really took off in the UK around 2010 or so, that number of smokers was already down to 20% and has since reduced further to around 16% now. So vaping's potential market was undermined everywhere by the social trend towards not smoking, especially given that very few vapers are never-smokers. So that means fewer potential vapers down the line. The number of SA smokers might be stable or even growing, I don't know. But if it is growing, it will be among the least educated, in line with global norms. The higher a person's education level, the less likely they are to smoke. And the more they are likely to earn. So even if SA still has a growing ratio of smokers, it will be among manual labourers and blue collar workers who are effectively priced out of the vaping market.

3) Not all who turn to vaping will remain in the SA vaping market. Wealthy Saffies are quite a mobile group. Many are emigrating. And then not all vapers continue to do it. Some do it for a while and then quit everything. So the SA market growth will be offset by vapers who quit and those who emigrate.

I suspect that hefty regulation and sin taxes against vaping will prove further deterrents. I think we still have some growth headroom. But unless the vaping industry can find a way to popularise vaping among black smokers, and find a way to make it affordable for them, our growth will plateau quite quickly. But then, initial industry analysis indicated that the SA cell phone market would peak at 250k users. So analyses can be dead wrong. Anyway, we'll find out either way. Exciting times.

Well written. I disagree to an extent on the price point argument though. Yes, higher end gear is getting more expensive, this is true for the entire tech industry, but the price of entry level kit is coming down, very few main stream vapers (in my limited experience) use massive 4 - 8 coil setups all day or even drain 4 batteries a day, those that do that, can easily afford to do so. There is such a wide variety of available tanks and mods, some for reasonably cheap and some ridiculously expensive. As with any other industry there is a price entry point, with that I agree and it will effectively price a large part of the population out of the market. It all comes down to affordability, if you cannot afford R100 a day on juice, chances are you won't do that, it's more likely you will get a device that is much cheaper and get juice that is stronger that will last you a lot longer.

What I suspect we will see is a bubble, we have seen the tremendous and exponential growth in a very short amount of time and then we will have sudden stagnation as innovation dries up and people start getting comfortable with what they have. Research and Markets reckon that the industry will be worth $32 billion by 2021 (http://www.researchandmarkets.com/research/n8lcg2/global_vape). That is not a small industry. It's worth noting though that their research is based on tobacco companies and vape companies and I believe there is where we will see the trend going. New vapers will soon most likely be buying something provided by Big Tobacco.

Those of us building coils and making our own juice will become the "roll your owns" of the new vape industry, while Big Tobacco will become the main stream supplier.

 

[RichJB]

Good points, @Caveman.

 

[Martin_tu]

I think we can accept that: Generally the SA market is so small,

By overseas standards maybe but perhaps not so 'small' in SA after all. http://www.vapingpost.com/2016/07/15/vaping-industry-thriving-in-south-africa/ (And that was last June)

So I approached those ppl I mentioned in my post (VPASA) just as a general enquiry. They told me it was only R3000 to R5000 a month membership fees to be able so speak (and possibly vote nogal) at their AGM's...... Go figure.

Erm, pass.

M_tu