Following a legislative change that classified e-vapour products as equivalent to traditional tobacco products like cigarettes, e-liquids became subject to excise duty in Kazakhstan in 2020. Together with the negative economic impact of COVID-19, the ensuing price hikes reduced the appeal of open vaping systems among some consumers, with the result that e-liquids recorded a steeper current value sales decline than in 2019.
The negative impact that heightened economic uncertainty and the imposition of excise duty on e-liquids had on the overall performance of e-vapour products in 2020 was offset by the successful introduction of non cig-a-like closed vaping systems in Kazakhstan. Relatively inexpensive and easy to use, these products were particularly well received by younger consumers who are interested in vaping but unwilling or unable to pay higher sums for more sophisticated open systems.
Heated tobacco products continued to expand at a rapid pace in 2020. Retail volume sales of tobacco heating devices and heated tobacco grew at double-digit rates despite the unfavourable economic climate and the introduction of excise duty on the latter.
Retail volume sales of non cig-a-like closed systems are expected to grow steadily throughout the forecast period. The relatively low cost and convenient nature of these products should ensure they continue to gain popularity among younger consumers, occasional vapers and cigarette smokers who want to switch to vaping for health reasons or to save money.
Heated tobacco looks set to continue expanding at a robust pace over the forecast period thanks to the perception among many consumers that this method is less harmful than traditional smoking. New launches by Philip Morris and British American Tobacco and the likely entry of JTI should also help to stimulate interest in the category.
The number of vaping specialist retailers in Kazakhstan has fallen since the imposition of excise duty on e-liquids in 2020. This will have a negative impact on the performance of open vaping systems over the forecast period, as store closures have reduced the accessibility of these products and not all consumers are willing or able to purchase them online.
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This report originates from Passport, our Smokeless Tobacco and Vapour Products research and analysis database.
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