Global Economic Outlook and Tobacco Industry Trends
According to CITIC Securities, the world economy faces uncertainty in 2024, with the tobacco industry reflecting stringent demand characteristics. Given frequent positive signals from the U.S. vape regulatory policy, and patent mediation between Filmore International and British American Cigarettes on HNB products. The new tobacco industry is expected to improve in the second half of the year.
China’s Vape Exports Show Steady Recovery
On July 3, CITIC Securities released the report “Export Growth Normal, U.S. Control Releases Positive Signals”, saying that according to the General Administration of Customs, in May 2024, China’s vape exports were valued at $1.01 billion, with normal year-on-year growth. The recovery in the data is mainly due to a significant increase in the number of exports. Although the average export price declined, it showed signs of stabilization compared to the clear downward trend of the past few years.
U.S. Market Demand Remains Strong
In May, exports of vapes to the US rose 34.9% year-on-year to $340 million, reflecting strong demand for vaping in the US market; exports to the UK were -19.0% year-on-year to $130 million, a continued decline year-on-year, but the rate of decline narrowed from April. CITIC Securities’ judgment is mainly due to the large compliance space, screening of e-cigarettes, and other innovative products launched. In April 2025, the United Kingdom’s disposable vape ban will be formally implemented, and the brands will speed up the product form iteration.
Positive Signals from Global Regulatory Developments
Recent developments have provided optimism for the vape industry. In the U.S., menthol-flavored products have, for the first time, passed the PMTA process. Meanwhile, Australia has begun relaxing its vape restrictions.
CITIC Securities noted that rampant illicit markets have pressured governments to re-examine their regulatory stances—an adjustment expected to favor legal vape brand sales.
Growth in the Heating Non-Combustion (HNB) Market
CITIC Securities analyzed that demand for heating non-combustion (HNB) products remains strong, particularly in Japan and Germany, where markets are growing rapidly.
In April 2024, Japan’s HNB imports increased year-on-year, while Germany’s imports surged 51.8% and 132.1% in March and April, respectively. China’s HNB exports also performed positively, with export value and average price rising 2.9% and 33.8% year-on-year from April to May 2024.
Major Companies Expanding HNB Investments
From a corporate perspective, industry leaders are ramping up HNB development. Filmore International has expanded its investments in Ukraine and Egypt through product promotion, capacity building, and mergers and acquisitions.
Similarly, Japan Tobacco International (JTI) has increased its total HNB investments and entered Middle Eastern and African markets.
Strengthened Regulations in the EU and Southeast Asia
On the regulatory front, the European Union and parts of Southeast Asia are tightening controls. Poland is advancing a ban on flavored heated cigarettes in line with the EU directive prohibiting flavored heated tobacco products. Meanwhile, Vietnam is preparing to strengthen oversight of both vapes and heated cigarettes.
Outlook for the Global New Tobacco Industry
Looking ahead, the HNB industry is expected to continue expanding as demand in core markets grows and high-potential regions develop.
In 2024, despite global economic uncertainty and strict demand in the tobacco sector, the new tobacco industry is projected to improve in the latter half of the year, supported by favorable U.S. regulatory signals and the resolution of key HNB patent disputes.
