Key points:
·Malaysia’s Health Minister says a total ban on e-cigarettes “is no longer a question of if,” with the proposal heading to the Cabinet; Act 852 has already cut the number of market SKUs by nearly 60%.
·ASDF says regulation is accelerating market reshuffling, creating a healthier competitive environment for early-compliant companies.
·The black market and smuggled products remain the biggest sources of unfair competition, requiring tighter import-end controls.
·If an open-system ban is enacted, the market will consolidate around disposables and closed systems, narrowing consumer choice.
·Under the total ad ban, ASDF is turning to compliant packaging, POSM systems, and community education-based communications to maintain user engagement.
·ASDF advises newcomers to abandon price wars and focus on technical stability, flavour consistency, and after-sales service.
[By Vincent, 2Firsts Original, reporting from Shenzhen]Malaysia’s e-cigarette industry may be facing its toughest moment yet.
Recently, Health Minister Dzulkefly Ahmad stated that a total ban on e-cigarettes “is no longer a question of ‘if’,” adding that once the proposal’s study is complete, it will be presented to the Cabinet. He revealed that since Act 852 took effect, the number of e-cigarette SKUs in the market had dropped from 6,824 to 2,794 by June 2025—a decline of nearly 60%.
To push this potential ban forward, the Ministry of Health has formed a cross-departmental special committee, working with the Ministry of Finance, Ministry of Domestic Trade and Cost of Living, Ministry of Investment, and the Attorney General’s Chambers to develop the legal and implementation framework for a total ban.
This move has sparked broad concern among industry groups, such as the E-Cigarette Sales and Retail Association, which warn that a blanket ban could destroy the legal market, forcing millions of consumers into an untraceable and riskier black market—undermining the policy’s intended goals.
Regulation accelerating market reshuffle; consumer choice may shrink
At this critical juncture, 2Firsts spoke with Kitson Tan, Business Development Director of ASDF.
Kitson believes all current market changes stem from strong government regulation, particularly the enforcement of Act 852. Regulatory actions are “accelerating the reshuffle,” but for companies that moved early on compliance, “it has created a healthier competitive environment.”
The black market and smuggling remain major problems, posing “extremely unfair competition” for compliant businesses. In present and future competition, price is no longer the decisive factor.
“In the past year, multiple enforcement rounds have all focused on implementing Act 852,” Kitson said, noting that its core is protecting minors, ensuring product legality, and regulating taxation. With many untaxed and non-compliant products removed from shelves, retail has endured short-term pain, but the result has been a healthier playing field for early-compliant brands like ASDF.
On signals that the Ministry of Health is considering banning open-system vapes, Kitson predicts this would sharply push the market toward disposables and closed systems.
“This would indeed restrict the flow of illicit e-liquids, but the trade-off is a much narrower range of consumer options,” he said.
ASDF has already prepared for this shift, launching the closed-system Cerro line, which includes the Cerro device and Ostro pods, ready to meet potential future demand changes.
“No-ads” era demands a marketing rethink
Act 852’s marketing restrictions have had major impact, banning all forms of advertising and public display.
“The total ban on advertising and display is the biggest challenge,” Kitson admitted. “It not only shuts down all traditional marketing methods but also demands extremely restrained product packaging and in-store presentation.”
Short term, compliance costs for vape brands will soar: developing dedicated closed-display cabinets, redesigning all product packaging, and training retail staff in compliance messaging.
ASDF has rolled out updated “cartridge-style” compliant designs, launched a new Act 852-compliant series, and invested in POSM (point-of-sale materials) systems to work with compliant retail networks, ensuring legal visibility.
The company is also pivoting toward “educational content,” using membership communities and responsible consumption advocacy to maintain deep user connections in a “silent” market.
Enforcement blind spots remain; calls for precision black market crackdowns
Despite stricter laws, Kitson believes enforcement is still the biggest challenge: “Black market and smuggled products remain the main issue.”
He suggests tightening import-end controls to create a fair environment for compliant brands.
Kitson notes that as policies tighten, channels increasingly favour compliant brands, and the market is trending toward “smaller capacities, minimalist designs, and high technical stability.”
Advice for new entrants: abandon price wars, build compliance and innovation mindset
For brands still eyeing Malaysia, Kitson offers three key tips:
1.Allow sufficient time and budget for product registration and packaging review.
2.Base marketing strategies on the assumption of “zero advertising,” exploring creative compliant communication methods.
I3.n intense competition, the winning edge is no longer price but technical strength, flavour consistency, and robust after-sales systems.
“This,” Kitson concludes, “is exactly why we have maintained a leading position in such a rapidly changing market.”
