The withdrawal of European and American tobacco manufacturers and the gradual reduction of foreign e-cigarette brands doing business in Russia due to its war with Ukraine has allowed for the growth of Chinese e-cigarettes in Russia.
As Russia’s tobacco industry relies heavily on the support and investment of foreign brands, the withdrawal of international tobacco companies will cause a large shortage in the Russian tobacco market, which will lead to a sharp increase in the price of tobacco products sold in Russia, according to iGeekPhone.
By the end of 2021, there were more than 5,000 stores selling e-cigarettes in Russia, including more than 1,100 in the Moscow region.
According to real estate platform DNA REALTY, the number of tobacco shops in Russia grew by at least 20 percent in 2022, with the bulk of their profits coming from e-cigarette sales.
BAT announced it will withdraw from the Russian and Belarusian tobacco markets in 2023. Philip Morris International (PMI) and its subsidiary Fimo International, are also considering retaining their business in Russia because Russia is the seventh-largest tobacco market for PMI.
Japan Tobacco suspended investments in Russia and Imperial Brands transferred its Russian operations to a successor in Russia.
“E-cigarettes have great potential as alternatives to the tobacco market in Russia, where e-cigarette consumers account for 6.8 percent of the total number of smokers,” the article states. “After the United States and Europe, Russia is the world’s third-largest importer of electronic nicotine delivery systems (ENDS).
“China accounts for 90 percent of the global market. In 2021, China’s exports to Russia reached 82.5 billion rubles. This year it could increase by 35 percent to 111 billion rubles.”