The Rise of Open System E-cigarettes in Europe

While disposable cigarettes have become popular in the United States, open-system electronic cigarettes are still the mainstream product in Europe. While American consumers have become accustomed to the convenience of using a disposable cigarette and throwing it away, European consumers are still repeating the action of refilling their open-system electronic cigarettes.

Europeans appear feudal and antiquated in front of the open and enthusiastic Americans.

However, in comparison to the FDA's regulation of e-cigarettes in the United States, the European market, particularly in the UK, has a much more favorable and open attitude towards e-cigarettes.

To highlight sharp contrasts between the two, "2FIRSTS" interviewed several domestic electronic cigarette manufacturers' leaders.

In terms of economics and environmental protection, open-system e-cigarettes are still the mainstream.

Kevin (pseudonym) is the head of an electronic cigarette manufacturer, and he explained that open-type electronic cigarettes are still the mainstream product on the European market due to two main reasons: affordability and environmental friendliness.

According to Kevin, using the UK market as an example, the current mainstream smoking equipment is priced between £50-£70, while the price of tobacco oil ranges from £0.99 to £5. One bottle of tobacco oil contains 10ml and can last consumers 3-5 days.

Simple calculations show that the cost of e-liquid as a consumable can range from as low as £6 per month to a maximum of £50 per month.

The current price of disposable cigarettes in the US market ranges from $15 to $25, with an average lifespan of three days. The monthly expense is estimated to be around $150 to $250.

In addition, the cost of a pack of cigarettes in the UK is typically around £10.

It can be seen that open-system electronic cigarettes have a higher cost-effectiveness compared to traditional cigarettes or disposable e-cigarettes.

The deeper reason behind this is closely related to the economic downturn that Europe has been experiencing in recent years.

According to data from the EU statistical office, the Eurozone's GDP for 2020 declined 6.8% from the previous year, while the GDP of all 27 EU member states declined by 6.4%. Although there has been some recovery in 2021, with GDP growth of around 5.2% for both the Eurozone and all 27 EU member states, neither has yet fully returned to pre-pandemic levels.

According to data from the UK Office for National Statistics, the country's gross domestic product (GDP) grew by 7.5% in 2021, rebounding strongly from a 9.4% contraction in 2020. However, it has not yet fully recovered to pre-pandemic levels.

Therefore, more cost-effective open-system e-cigarettes have become the preferred option for electronic cigarette consumers in Europe.

Of course, environmental protection is also an important factor that European consumers consider.

It is widely known that single-use cigarettes are not environmentally friendly. In the case of the US market, the monthly consumption of 40 million single-use cigarettes means 40,000 discarded lithium batteries, which puts immense pressure on the environment.

According to Kevin, if an open-system electronic cigarette is used normally, the device can last for one or two years. The cotton and e-liquid, which are consumables, do not pose a significant environmental burden.

Due to multiple factors, the European market has been slightly slow in terms of the innovation cycle of electronic cigarettes.

Retro isn't outdated: Comparison between open electronic cigarettes and disposable cigarettes.

For many American and even Chinese e-cigarette consumers, open-system e-cigarettes are considered outdated products. When open-system e-cigarettes are mentioned, businesses tend to view them as having high educational costs, while consumers find them troublesome to use.

In actuality, after several years of development, open-system electronic cigarettes are no longer just a DIY toy for a niche group of consumers.

Dean, the head of an open-system electronic cigarette manufacturer, told "2FIRSTS" that the use of open-system electronic cigarettes is now very convenient and no longer requires consumers to assemble heating wires or adjust power as in the past. Simply adding e-liquid is sufficient for normal use. Although there are still products available for DIY, they are mainly used by niche players in the market.

In terms of flavor, the most common mixed fruit flavors are currently available on the market, and they are largely covered by open-system electronic cigarettes. However, compared to the sweet flavors of disposable cigarettes in the United States, European flavors are not as overpowering. Furthermore, due to the better restoration rate of the cotton core, open-system electronic cigarettes actually have an advantage in terms of taste.

Regarding consumer demographics, open-system electronic cigarette users span across all age groups and female users make up a significant portion. For example, in countries like France and Italy, not only smokers, but also non-smokers are increasingly using open-system electronic cigarettes. Meanwhile, the majority of disposable cigarette consumers are still concentrated among young people.

Currently, the biggest difference between open-system electronic cigarettes and disposable cigarettes is in terms of distribution channels.

In the United States, convenience stores, large supermarkets, and gas stations have become important retail channels for disposable cigarettes, while open-type electronic cigarettes in Europe are primarily sold in vape shops. Even chain vape shops will also act as distributors and directly connect with domestic manufacturers.

In terms of branding, the brands of domestic manufacturers such as SMOK and GEEKVAPE are the mainstream products in the European market. However, consumers tend to choose local products when it comes to e-liquid selection. On the one hand, the threshold for flavoring technology is not high. On the other hand, if domestic manufacturers import raw materials for e-liquid and then export to Europe, the cost is higher.

According to Dean, the European market is expected to continue growing in the future, but new brands may face difficulties entering the market. This is mainly due to policy restrictions, which limit advertising and make reaching end consumers challenging. Additionally, European consumers tend to be conservative and are not quick to switch from their usual products.

However, Dean also mentioned that since June of last year, there has been a significant increase in the sales of disposable cigarettes in the UK.

Based on industry experience, the US market serves as a barometer for the trends of electronic cigarettes, with popular products usually diffusing to other markets within 12-16 months.

From this perspective, if manufacturers want to enter the European market, disposable cigarettes may be a better choice than open e-cigarettes. Currently, domestic brands such as Geek Bar have already entered the UK market.

However, the UK market's restriction on disposable e-cigarette liquid content to 2ml (approximately 600 puffs) has resulted in the existence of products with actual content exceeding their stated levels.

It is worth noting that although the European market is relatively friendly towards electronic cigarettes, products need to be registered with TPD six months in advance before they can be put on the market. Registration fees vary by country, ranging from as low as 150 pounds in the UK to as high as 20,000 euros in Denmark.

Disclaimer: This article is for reference only and does not constitute any investment advice. Enterprises should use the information and opinions in this article with caution and consult authoritative departments or legal institutions as necessary.

Reference materials:

In 2020, the Gross Domestic Product (GDP) of the Eurozone and the European Union (EU) saw a decrease of 6.8% and 6.4% respectively.

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The European Union's economy is expected to grow by 5.2% in 2021, according to forecasts.

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The UK economy is expected to grow by 7.5% in 2021.

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