Recently, on the official website of VUSE, an e-cigarette brand under British American Tobacco (BAT), it was discovered that the brand has launched a disposable e-cigarette with an 8,000-puff capacity in the Canadian market—the VUSE GO EDITION 8000.

VUSE推出8000口一次性电子烟，BAT如何在全球四处出击？ — VUSE GO EDITION 8000 | Image Source: VUSE

"Full Puff Count" Product Coverage

According to public information, the VUSE GO EDITION 8000 comes with a 15ml e-liquid, providing 8,000 puffs of use. VUSE claims this is their largest puff count disposable e-cigarette to date, and it is known that this disposable e-cigarette uses a ceramic core atomizer.

Additionally, the VUSE GO EDITION 8000 features a built-in 560mAh rechargeable battery and a USB-C charging port, with a transparent e-liquid tank design that allows users to monitor the remaining amount of e-liquid. Its nicotine content is 1.8%, and it currently offers 10 flavors to choose from, priced at 29.99 Canadian dollars (approximately 22 US dollars).

VUSE has released four disposable e-cigarettes with different puff counts in Canada, namely VUSE GO800, VUSE GOxl, VUSE GO Edition 5000, and the latest VUSE GO EDITION 8000, with prices ranging from 10.99 to 29.99 Canadian dollars.

After inquiring about the relevant product information, it was found that the VUSE GO EDITION 8000 is currently only sold in Canada.

Asia-Pacific Vaporization Strategy

The e-cigarette brand VUSE, owned by Reynolds Tobacco Company, was launched in the UK in 2013, and by the end of 2023, the brand had expanded to over 59 countries worldwide.

As BAT accelerates its transition to new types of tobacco products, new products such as VUSE are receiving more resource support from the company. According to BAT's financial report for 2023, the sales of VUSE and Velo have driven the revenue growth of the new category (including vaporization, heated non-combustible, and oral products), achieving the target two years ahead of schedule, adding 398 million pounds to the group's profit; the e-cigarette brand VUSE's market share increased by 100 basis points, reaching 36.8% in major markets. BAT stated that these products "achieved strong revenue growth driven by an increase in the number of consumers purchasing in the listed regions."

According to Nielsen convenience store data, VUSE's market share in the United States has gradually increased from 42% to 42.2%, while the market share of JUUL, the second-ranked brand, remains unchanged at 24.2%.

It has been noted that BAT has been promoting the launch of its products in different markets at a faster pace in the past year.

In July 2023, it was announced that VUSE, its vapor e-cigarette brand, was officially launched in South Korea; in May 2024, the decision was made to promote the sale of its vapor e-cigarette "VUSE GO 800" nationwide in South Korea.
In September 2023, VUSE Pro with 5,000 puffs, VUSE Go 1500 with 1,500 puffs, and VUSE Go 600 with 600 puffs were launched in the Russian market.
In August 2023, after the Malaysian government legalized liquid nicotine, the disposable e-cigarette VUSE GO 1500 was launched; on October 30, a disposable product with 3,000 puffs, VUSE GO 3000, was introduced.
On August 21, 2023, VUSE GO 700, a zero-nicotine e-cigarette, was launched in Japan; on December 8, 2023, the zero-nicotine vapor product "VUSE GO700" was promoted to convenience stores by BAT Japan.
On November 23, 2023, VUSE launched large-puff disposable products "VUSE GO 5000" and "VUSE GO 6000" in the Middle East market.
On December 28, 2023, VUSE opened its first e-cigarette experience zone in Skopje, the capital of Macedonia.
On April 18, 2024, the e-cigarette brand VUSE Go entered the West Indian market, adding to its list of products sold in the Caribbean island nation of Trinidad and Tobago.

Looking at the regions where new products were launched in the past year, BAT aims to further develop the disposable e-cigarette market, mainly in the Asian region, demonstrating its strategic emphasis and vision for continuous expansion.

For example, it has vigorously promoted vapor products in the South Korean market, where vapor e-cigarettes have not dominated. Kim Eun-ji, CEO of BAT Korea, said that the goal is to promote the development of tobacco alternative products. Compared to the past when only cigarettes were sold, the transformation from a single category to multiple categories is an inevitable change in business and operational direction.

"VUSE has proven its competitiveness in the US market, so it should be able to shake up the current rules of the game," said Kim Eun-ji.

Analysts in the South Korean tobacco industry believe that although the South Korean vapor e-cigarette market may be relatively small, it has growth potential as the global e-cigarette market continues to expand. BAT may hope to enter the market early to capture market share and establish brand loyalty.

BAT로스만스 액상형 전자담배 뷰즈 국내 출시 — VUSE GO｜Image Source: BAT

Moreover, promoting products in different regions can help the company diversify risks and reduce dependence on specific markets. Even if the South Korean vapor e-cigarette market is not mainstream, promoting products in multiple markets can reduce sensitivity to changes in any one market. BAT may use its global brand influence and existing distribution network to establish brand awareness worldwide.

By introducing the VUSE brand to markets in South Korea, Japan, Malaysia, Russia, the Middle East, and elsewhere, BAT is leveraging its global brand influence and the original cigarette distribution network to get a slice of the e-cigarette market.

Can Cigarettes Still Be an Option?

BAT shareholders are more concerned about the company's own value. Over the past year, BAT's stock price has fallen by about 24%. In recent years, due to increased taxes, smoking bans, and health issues, consumers have gradually turned to alternative tobacco products. The global tobacco industry is currently struggling to cope with the declining demand for traditional tobacco products, especially in Western markets.

Under pressure from shareholders, Jack Bowles, BAT's former CEO, ended his term after four years, and in May 2023, the former CFO, Tadeu Marocco, became CEO.

Under his leadership, BAT continues to make a significant transition to new types of tobacco, while also expecting to cut back on traditional cigarette business. The most symbolic event was in December 2023 when BAT said it would take an impairment of about £2.5 billion ($3.15 billion) due to a reassessment of the value of some of its tobacco brands in the United States. After the announcement, BAT's stock price fell by 10.2% in London, hitting its lowest level since September 2010.

In the United States, its main market for e-cigarettes, BAT faces the threat of illegal disposable e-cigarettes seizing market share, which exacerbates the challenges faced by BAT and its sellers. They are also facing a steady decline in demand for traditional cigarettes.

Russ Mould, investment director at the UK online investment platform AJ Bell, said:

"As smokers continue to switch to next-generation products, including e-cigarettes, this prompts British American Tobacco to take a long-term view of its combustible category assets. Although the company pays dividend dividends, given the poor stock performance and the increasing regulatory and political pressure faced by the industry, investors may question their commitment to this stock."

Against the backdrop of PMI's accelerated deployment in the heated tobacco market and continuous involvement in patent disputes, the launch of BAT's products on the market has become a constraint. PMI has been promoting the globalization of IQOS products since 2014, based on the Japanese and Italian markets. Currently, the阶段性 (stage or phase) success of its smoke-free strategy is reflected in the net revenue of IQOS products, which has surpassed the cigarette product Marlboro, with a net revenue of $35.17 billion in 2023, a year-on-year increase of 10.7%.

Under a successful model, BAT's plan for the future is clear and clear-cut—accelerate the development of new types of tobacco.

The first step is to solve the constraints brought by litigation. On February 2, PMI and BAT announced on their official websites that the two parties had resolved intellectual property disputes related to heated tobacco and e-cigarette products.

BAT CEO Tadeu Marocco said:

"After building VUSE and GLO, two brands worth £1 billion, their potential in reducing tobacco harm is obvious."

BAT and PMI said that the settlement agreement resolved all ongoing global patent infringement lawsuits, including all relevant injunctions and exclusion orders, and prevented future claims against current heated tobacco and vapor products. The settlement also allows both parties to innovate and introduce improved versions of their products. Both parties are committed to continued innovation in the field of risk reduction products to further promote the reduction of tobacco harm.

In March 2024, BAT invested £30 million to open an innovation center in the UK, providing nine specially designed technical spaces to help develop BAT's low-risk product portfolio. The innovation center is dedicated to researching modern oral nicotine pouches, e-cigarette liquids and flavors, heated products, and new products other than nicotine.

It is worth noting that after the UK announced a new tax on e-cigarettes, Marocco expressed support, pointing out that the measure would allow the government to better control the e-cigarette market and help BAT capture market share. However, as a competitor in the disposable e-cigarette market, Marocco told the media that the ban on disposable e-cigarettes overseas has not worked. "In Australia, they have banned the entire category, and the number of young people using the illegal market is very high. The same situation has occurred in Brazil."

In addition, BAT actively lobbies in some countries where e-cigarettes are banned. In Brazil, Victor Loria, President of BAT Brazil, said he looks forward to the National Health Surveillance Agency (Anvisa) advancing the regulation of e-cigarettes in Brazil. In his view, if e-cigarettes continue to be banned, Anvisa and Brazil will "fall behind." The research he mentioned shows that e-cigarettes pose less health risk compared to traditional cigarettes, which is also a reason to consider the regulation of e-cigarettes.

In the long-term vision set, BAT's goal is to increase non-combustible tobacco users from 23.9 million to 50 million by 2030, and to increase the revenue share of non-combustible tobacco business to 50%. This figure is a long-term plan for BAT, but the competitor PMI is approaching this goal. On May 8, PMI held its 2024 annual shareholder meeting, and CEO Jacek Olczak mentioned, "Our strategy to become a smoke-free company has enabled us to build and maintain strong momentum, resulting in smoke-free products accounting for nearly 40% of our total net revenue and more than 40% of gross profit in the fourth quarter of 2023."

Perhaps the 8,000-puff disposable e-cigarette launched this time will not be the limit for VUSE products, and its larger-puff e-cigarette products will continue to appear in other global markets.

Macedonia