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Vaping is Small Business, Not Big Tobacco

Categories: Vaping News
Date: 26 Nov 2015 06:45

Vaping is Small Business, Not Big Tobacco

Despite how similar they may look from afar, vaping and smoking are different in just about every other way.

We already know that tobacco smoking is far more dangerous for your health, far more expensive, and far more addictive, but did you know that tobacco smoking is also much more about big business?

Vape cafes, suppliers, and distributors are all generally more about small business – and this is true the world over.

Despite the continued fall in tobacco smoking around the world, big companies don't tend to need to be innovative in their marketing or product. According to this Business Insider article from 2014, "the major brands have evolved very little over some decades; the addictive nature of the product and brand loyalty mean there is little need for major product innovation which helps to keep research and development costs down."

Meanwhile, the need for innovation for just about every other company in the world is highlighted in an earlier Business Insider article from 2013, which claims that "companies must innovate or die."

Vaping companies don't offer products that encourage addiction like tobacco smoking and nicotine do. Vaping companies are often too young, too misunderstood, and too unknown to inspire the kind of brand loyalty that you see in the big business of tobacco production and consumption. Like other companies, e-liquid and hardware suppliers must be innovative when it comes to reaching their audiences.

That said, there certainly has been cases where big tobacco companies, not wanting to miss out on the vaping buzz, have bought out or opened up their own e-cigarette brands. Such was the case when Lorillard (the US name behind tobacco brands such as Maverick, Old Gold, and Kent), purchased UK-based e-cigarette company SKYCIG in 2013.

However, the majority of vaping businesses remain in the SME (small-to-medium enterprise) market.

In the space of one year, there were 121 trademark applications for vaping companies in the UK alone. Of these, just four were made by existing tobacco brand Imperial Tobacco, and the rest were from independent companies.

The extent of the small business market for vaping has been highlighted recently in the latest update on the FDA regulations in the US. While exact details of the current proposals remain unknown until they are officially announced, it is believed that they will be based heavily on the previous round of proposals in which the FDA suggested a ‘grandfather date' for new tobacco products. As this date would sit in early 2007, it would close down the grand majority of e-cigarette companies in the US, as almost every one of them opened after this cut-off date.

Gregory Conley, the president of the American Vaping Association, explained that these regulations would "decimate nearly every single small and medium-sized business in this market… thousands of businesses would close overnight. And nearly he entire e-cigarette market would become either big tobacco or firms that are back heavily by Wall Street money."

The divide between smoking tobacco and vaping continues to grow and become more obvious – and not just in how they each look on the outside.

 

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