Retail value of Malaysian vape industry rises by more than half to RM3.48 bil

THE Malaysian vape industry’s retail value has grown exponentially by approximately 53% to an estimated RM3.48 bil in 2023 from RM2.27 bil in 2019 as the numbers of consumers spiked due to many smokers switching to vape.

These findings are part of the Malaysian Vape Chamber of Commerce’s (MVCC) Malaysian Vape Industry Study 2023 which revealed that the Malaysian vape industry is fast becoming the game-changer to disrupt cigarette smoking as 31% of Malaysian smokers have switched completely to vape while 69% of smokers are also vaping with as much as half of them using vape to completely quit smoking.

The report also saw the sector’s contribution to the economy increased significantly as per the number of workforce employed and revenue generated from the vape industry.

“Our study clearly shows that the vape industry has continued to grow from strength to strength,” commented MVCC’s secretary-general Ridhwan Rosli.

“Apart from contributing significantly to the country’s economy and helping smokers to quit cigarette smoking, it has also facilitated the growth of local entrepreneurs and created multiple job opportunities throughout the entire supply chain – both directly and indirectly.”

Ridhwan Rosli

While MVCC is encouraged by the government’s commitment to regulate the vape industry through the introduction of a taxation framework and the tabling of the Control of Smoking Product for Public Health Bill 2023 (Bill), it is nevertheless concerned with the Generational End Game (GEG) policy.

“The primary concern lies in the potential adverse economic impact it may have on the sector. The vape industry is experiencing significant growth with many Bumiputera entrepreneurs finding opportunities and livelihoods within this market,” justified Ridhwan.

“Implementing the GEG policy could stifle this growth, leading to job losses and affecting the livelihoods of many, especially those in the Bumiputera community.”

Added Ridhwan: “It is also sending the wrong message to cigarette smokers by placing vape in the same category as cigarettes which will deter many to switch to vape for cigarette smoking cessation.”

Data for the The Malaysian Vape Industry Study 2023 was garnered through two studies: one through direct engagement with industry players, and an online consumer survey.

The findings from the industry study show that the number of vape businesses has evolved over the past few years. Currently, about 7,500 general retail shops sell vape products and 2,500 retail shops. The workforce has increased from 15,000 to 31,500 in 2022.

Key findings from the consumer study include:

  • The number of vape users using the open and closed system has decreased from 77% and 23% in 2019 to 50% and 18% in 2023 while the disposable system has quickly gained a market share of 32%.
  • The total average spent on open/closed system is estimated at RM2.56 bil annually while the spent on disposable products is estimated at RM925 mil annually.
  • 34% of vape users prefer nicotine-only e-liquid while 28% prefer non-nicotine e-liquid. Approximately 38% use both.
  • The reason users chose to vape is because it is less harmful compared to cigarettes (45%), helps quit smoking (45%) and is cheaper than smoking cigarettes (36%).

Ridhwan further noted that Malaysia is well-known internationally for its strength in manufacturing high-quality vape products, particularly e-liquids.

“This puts us in a strong position to attract quality foreign direct investments (FDI) into the country, thus strengthening the vape business ecosystem,” he asserted. “The aim of our Malaysian Vape Industry Study 2023 is to provide the government with the latest industry data to take into account while drafting laws for the industry.” – Aug 18, 2023

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