The vape industry has grown into a massive industry since its introduction and now the global vape market is worth an estimated £15.5bn. The biggest markets are the United Kingdom, United States, France and Germany. It may now be growing at a slightly slower rate than when it first started but the industry is still expected to grow, particularly as specialised vape products become more readily available and with the recent ban of menthol cigarettes.
Are Vape Shops Becoming Saturated?
In the UK, whichever high street you decide to visit, you are guaranteed to come across at least one vape shop. Most of the bigger shopping centre owners also now allow vape shops to operate within them. This is great for vapers because they can easily access their vape items and never have to worry about being without them. This has also made it cheaper to vape. As the competition has increased, prices have fallen and a lot of vape shops are now happy to operate with smaller margins. For example, you can now get 100ml e-liquid bottles for as cheap as £5.00 with brands such as Six Licks 50/50 being low price, high quality options. This is a natural process that always occurs when a market becomes saturated and its great for consumers but not necessarily for vape shops and businesses.
When a market is saturated, business owners operating within it must decide whether to drop their prices or hold their margins. The same applies to vape shops. Although every vape shop will have its own unique expenses, the long term survival of these shops will be determined by if they can sustain high margins whilst maintaining competitive prices. Customers still need to see they are getting good value money. Individual vape shops will never be as busy as the likes of Tesco or Sainsburys. This is what makes margin even more important. They need to take all their costs and expenses into consideration and then apply a margin that covers all them on a quieter day with a bit left over. Vape shops that operate on smaller margins may survive in the shorter term but not in the longer term.
The general high street downturn, the Brexit crisis and the government imposed COVID-19 lock down would have taken a toll on some vape shops, particularity those that solely rely on their B&M shops as a source of revenue. The likelihood now is that you will see some of them close down and cease operations. The shops that have an online presence and that have expanded their operations outside of their shops will more than likely continue to see growth. However, this growth will see bumps and downward pressure at times as the UK economy is about to enter one of the biggest recessions on record. Whilst users of e-cigarettes are addicted to the nicotine within e-liquids, some can and will economise when times get financially tough.
The Online Retail Vape Market
It is no secret that the high street in the UK is losing a battle against online retailers. Online retailers have lower fixed costs and people in the UK like the convenience of shopping online. For vape businesses, the online vape market is just as saturated as the shops on the high street. However, the number of people shopping online has increased and you can reach customers nationally and internationally. The same applies to most retail businesses. However, to be successful online, you need to spend thousands to increase your presence and to ensure your website is optimised. This can potentially take years and therefore it’s not as easy as it appears. There is far more to it than just simply packing parcels and dispatching them.
Conclusion Just like every other industry, the vape market is following the natural trends and processes that most other retail industries follow. The likelihood going forward is that you’ll see the overall industry grow in the UK with fewer of the shops around as the market attempts to level itself out. However, fewer shops doesn’t necessarily mean it will be any less convenient for vapers. They may find one vape shop on a high street rather than two or three with another one within 2-3 miles.