A tale of two tank markets: success in U.S., woes in Spain

The differing fortunes of e-cigarettes in two major markets are highlighted by new ECigIntelligence research, showing that while tank systems are taking off dramatically in the U.S. they have fallen flat in Spain.

Our U.S. research, available exclusively to ECigIntelligence customers in a 62-page special report, finds that the U.S. market is larger than previously thought thanks to increased growth in sales of refillable tank systems, previously not considered by other estimates.

“These refillable tanks are commonly adopted by more experienced e-cigarette users. Other trends include increasingly sophisticated tank hardware, and an immense range of flavoured e-liquids,” we report.

About three quarters of tanks are sold through retailers including up to 14,000 independent vape stores, while a quarter are bought online. And although the U.S. cigalike market has also returned to growth following a slowdown earlier in the year, tanks may now account for as much as half of the total e-cig market.

Consumers are moving toward tank systems for reasons including battery life, more efficient nicotine delivery, flavour variety, and lower running costs, our researchers found.

Pain in Spain

But the contrast with the situation across the Atlantic could not be greater both for e-cigarettes in general, and for tanks specifically. Although Spain’s population is about a seventh that of the U.S., and smoking prevalence in Spain is almost twice as high, the U.S. e-cig market is around 50 times larger in value terms.

We report on a Spanish “boom-to-bust story”  which saw “an explosion in retail outlets and use followed by a rapid contraction”.

“Many smokers who took up e-cigs then became worried by health scares, disliked the downmarket image of the category, and grew dissatisfied by the user experience. A large number switched back to combustibles.”

As a result, the number of vape stores has now plummeted from more than 3000 to a figure in the low hundreds, in the space of a year.

And this consumer dissatisfaction developed largely with tanks, despite all the benefits perceived in them by U.S. vapers. Unlike in the U.S., tanks came before cigalikes in Spain and the latter have remained a relatively minor part of the market.

However, Spanish consumers “were turned off e-cigs partly because the tank systems favoured in Spain require knowledgeable maintenance (e.g. replacement of parts); but this was often not performed by consumers, their enjoyment faded, and they went back to combustibles”.

What This Means: While the vaping community often understandably focuses on product features and benefits, the differing experiences of the U.S. and Spanish tank markets illustrated by our research show that consumer adoption – and abandonment – can be driven by more complex factors. Their effects are starkly shown in a contrasting year for the two countries’ vape stores.

– Barnaby Page ECigIntelligence staff

Photo: Avital Pinnick

Related articles from ECigIntelligence: 

In depth: e-cigs in the U.S. – market and regulatory analysis

In depth: Spain marketing and regulatory update

Barnaby Page

Editorial director

Before joining ECigIntelligence in early 2014 as one of its first employees, Barnaby had a 30-year career as a reporter and editor for newspapers, magazines and online services, working in Canada, the US and the Middle East as well as his current British location. He has edited publications covering fields including technology and the advertising industry, and was launch editor of the first large daily online news service in the British regional media. Barnaby also writes on classical music and film for a number of publications. Barnaby manages the editorial and reporting teams and works closely with the analyst teams, to ensure that all content meets high standards of quality and relevance. He also writes for the site occasionally, mostly on science-related issues, and is a member of the Association of British Science Writers.