Will Australia See Higher Sales in E-Cigarettes?

Will Australia See Higher Sales in E-Cigarettes?

Most of the recent trends in healthy lifestyle living tend to focus purely on diet and exercise.  How many times in the last decade have to see the word “carbs” show up in the popular media?  How many new exercise programs have popped up over the same period?  The numbers here are significant but these trends tend to focus on only two areas.  But there are reasons to believe that these trends are changing and that consumers are ready to start establishing healthy lifestyles in new directions.  One of the examples here can be found in the e-cig, or electronic cigarette, which allows smokers to avoid many of the harmful health effects that are often seen accompanying when consumers use traditional paper cigarettes.

Emerging International Trends

“When we look at the global trends, it is quickly becoming clear that most consumers are ready and willing to start making the transition into e-cigarettes,” said Sam Hadi at CloudCig, a major e-cigarette online retailer.  “Early on the expectation was that consumers would refuse to abandon their trusted paper cigarettes, but at this stage this is clearly not the case.”  In the world’s largest consumer market, the United States, 2.5 million consumers have already thrown away their traditional paper cigarette packs and traded them in for healthier e-vapor alternatives.

This has significantly boosted sales numbers for several large companies.  But what is more important here is the fact that these better performances have forced many companies to step up their research activities in the e-cigarette space.  This, in turn, will create a “snowballing effect” as companies compete with one another in order to attract the new consumers that are looking for healthier smoking alternatives.  This also means that we will almost certainly see many more e-cigarette advertisements that offer information about new choices for these innovative products.    We are in the midst of a changing culture in terms of health and well-being — and e-cigarettes represent of the best and most recent examples of these changing trends.

Implications for Financial Markets

But these changes will not only influence the health prospects of the newly changing consumer base.  We will also see major ripple effects in the financial markets, as well.  Specifically, global sales numbers have already far surpassed what many industry analysts were expecting once these electronic cigarette items started to be produced on a mass level.  As these companies continue to invest in research and marketing for these areas, electronic cigarettes will become much more common and will probably replace traditional cigarettes as the majority method for smokers in Australia and abroad.

For investors, recent moves by companies like Altria should be considered as notable.  Specifically, Altria has traditionally held its position as one of the largest and most well-known paper cigarette manufacturers in the world, more commonly referred to under the name Philip-Morris.  Altria has recently acquired small e-vapor companies as a means to match the new competition created by earlier moves by Lorillard, one of its main industry peers.    Lorillard was one of the companies on the vanguard in producing and marketing its e-cigarette items, so it will be very interesting to see how these two companies perform on a relative basis going forward.

In any case, the simple fact that these activities are being undertaken at all means that major trend changes are afoot when looking as this section of the market.  For Australian investors, this might seem somewhat irrelevant given the fact that these companies do not trade on Australian exchanges.  But this is not even close to being the case.  Changing consumer trends show that Australian companies are making moves of their own.  It will be important to watch the large companies to see where there are key difficulties and advantages for companies that are the largest and most well established.  But this does not mean that smaller companies will not be important in their own right.  For all these reasons, it will be important to watch for developments in the e-cigarette markets, as some major trend changes are clearly in place.

 

Tagged electronic cigarrette