Cig-a-likes remained negligible in Latvia in 2017 due largely to the increasing popularity of vaping culture among younger consumers, who consider cig-a-likes as inferior to open system vaping devices. The latter devices, which can be more easily personalised, were popular on social media and new e-liquids were introduced regularly.
Numerous outlets specialising in vapour system devices and e-liquids opened in 2017. However, consumer awareness and demand is not yet equal to the quick pace of development on the supply side.
In a report released by the State Revenue Service, one of the major factors that contributed to the drop in cigarettes sales in 2017 was the emergence and gradual establishment of vapour devices. These products are comparatively cheaper than repeat purchases of cigarettes and offer more innovative flavours – a more attractive alternative for consumers and therefore a threat to the traditional cigarettes category.
As the vapour products category is still considered young and growing, investment in expansion of distribution networks contributed not only to the recognition of individual distributors but also to the development of the category as a whole. In 2016 and 2017 Air Smoke SIA made significant investments in new outlet development and sales distribution network expansion.
Having established a strong presence in Latvia, players such as Philip Morris Latvia SIA and British American Tobacco Latvia SIA are well positioned to capture significant shares in the future within vapour products. For the introduction of its Iqos technology in Latvia in 2017, Philip Morris tapped into its existing economies of scale and invested significantly in marketing support for the new technology by putting it in the hands of local social media influencers.
Within e-liquids, younger consumers’ preferences are largely determined by their purchasing power and interest in new products. As such, instead of developing and maintaining a range of premium products distributors are instead expected to focus on introducing novelty to the category, which drove growth in overall vapour products in 2017.
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