Editor’s Note
Russia is the third-largest NGP market in the world, following the U.S. and Europe. In recent years, due to the unique global political landscape, Russia’s NGP market has developed characteristics distinct from other regions, making it a key target for numerous vaping brands seeking expansion.
2Firsts, as a global leader in NGP media and consulting, has a reporting network that spans across global markets. To provide a more comprehensive view of the current state and trends of the Russian market, 2Firsts connected with Evgeny Fedotov, Founder & CEO of Fedotov Group, one of the most influential tobacco and NGP research institutions in Russia.
Russia’s next-generation products (NGPs) market is undergoing a transformation, shaped by evolving consumer preferences, shifting regulations, and an ever-present illicit sector. While the market is forecast to expand by 20% in 2025, growing taxation and stringent compliance measures threaten legal operators while illicit products continue to flood retail channels.
To gain a deeper understanding of these dynamics, 2Firsts spoke with Evgeny Fedotov, founder of Fedotov Group, a leading Russian consultancy specializing in the tobacco and nicotine industries. Fedotov shares his views on the resilience of Philip Morris International (PMI) in HTPs, the shifts within the ENDS segment, and how China’s role in the market is evolving.
Market Growth and Key Drivers
Market Expansion: 2023 Performance and 2024 Outlook
Russia’s NGPs market, valued between $2.68 billion and $2.92 billion in 2023, remains one of the largest globally. Despite a slight 3.7% decline in disposable ENDS unit sales, the market compensated with a 29% rise in total volume sold, driven by a consumer shift toward larger-capacity disposable devices. As a result, total revenue grew by 15.8%.
“NGPs are no longer a niche category,” says Fedotov. “They are a fundamental part of the Russian nicotine landscape, and despite regulatory hurdles, demand continues to increase.”
One of the biggest catalysts behind this growth is the gradual shift from traditional cigarettes to reduced-risk alternatives. Russia still has approximately 27-29 million smokers, but with 10.5 million NGP users, the transition is well underway.
What’s Driving 2025’s Predicted 20% Growth?
Looking ahead, Fedotov predicts a 20% market expansion in 2025, fueled largely by growth in e-liquids and reusable ENDS. He notes that while disposable ENDS continue to dominate in volume, higher excise taxes are pushing some consumers toward refillable devices.
“The consumer profile is changing,” he explains. “Previously, many users preferred disposables due to convenience. However, price sensitivity is leading more people to explore reusable systems and e-liquids as a cost-effective alternative.”
Breaking Down the NGPs Segments: HTPs, ENDS, and Beyond
HTPs: Can PMI’s Dominance Be Challenged?
PMI remains the undisputed leader in the Heated Tobacco Products (HTPs) category, thanks to its well-established Marlboro and Heets brands. According to a 2024 retailer survey,
● 31% of shops reported an increase in HTP sales, indicating steady consumer adoption.
● 47% of retailers stated that demand remained stable, showing that PMI’s products have reached a level of market maturity.
Fedotov believes that despite PMI’s stronghold, Chinese HTP manufacturers could become more competitive in the coming years. “The market is evolving, and as new players introduce innovative technologies, we could see shifts. But for now, PMI is far ahead.”
ENDS: Consumer Behavior and Emerging Trends
Electronic Nicotine Delivery Systems (ENDS) have become a core component of Russia’s NGP landscape. Disposable ENDS account for 60% of the market, while reusable ENDS hold 40%.
Fedotov points out a growing trend toward higher-capacity disposable vapes, exceeding 10,000 puffs. “Consumers are looking for better value, and manufacturers are responding with devices that last longer and provide a stronger nicotine hit.”
Beyond ENDS: The Rise of Chewing Tobacco, Cigarillos, and Shisha
While ENDS and HTPs dominate headlines, other tobacco alternatives are quietly expanding:
● Chewing tobacco sales increased in 53% of surveyed retailers, reflecting a niche but steady demand.
● Cigarillos, now the third-largest nicotine product in Russia, are seeing increased daily consumption patterns, rather than being used occasionally.
● Shisha tobacco remains a well-established category, with both domestic and imported brands competing for market share.
China’s Expanding Footprint in Russia’s NGPs Market
China’s influence on the Russian NGPs market is undeniable. In 2024, China’s total exports of NGPs to Russia reached $536.4 million¹, accounting for 4.9% of global exports. Meanwhile, Chinese HTP exports to Russia hit $7.44 million¹, representing 46.5% of China’s total HTP exports.
However, Chinese brands still struggle to break through PMI’s dominance in the HTP sector. Fedotov explains, “PMI has spent years building consumer trust and regulatory compliance, which is difficult for newer players to match.”
That said, Fedotov sees opportunities for Chinese companies in the ENDS space. “China’s strength in manufacturing and supply chain efficiency gives it an advantage in cost competitiveness. If they can navigate Russia’s strict regulatory landscape, they can carve out a larger share.”
The Road Ahead for Russia’s NGPs Industry
Despite regulatory tightening and a dominant illicit market, Russia’s NGPs industry remains on a strong growth trajectory. PMI’s position in HTPs is unlikely to be challenged in the near future, while ENDS brands continue to compete for market leadership.
Fedotov believes that regulatory enforcement, innovation, and brand credibility will determine the market’s future. “Companies that can comply with regulations while offering quality, affordable products will emerge as winners.”
As the competition intensifies, agility and strategic adaptation will be key to thriving in Russia’s evolving nicotine market.
¹ China export data in this report is sourced from 2Firsts, based on Chinese customs export statistics. All other data is provided by Fedotov Group.
About Fedotov Group
Fedotov Group is an international tobacco consulting agency based in Russia. We work for professional companies in tobacco and vaping market all over the world. We can solve any problem at every step of the way, from creating the product to selling it. Our team will take on the most complicated of tasks, so you can devote all your time and energy to the most important — your product.
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