Smokeless Tobacco, E-Vapour Products and Heated Tobacco in North Macedonia

2021 DEVELOPMENTS

Sales of heated tobacco products grow rapidly from a low base

Heated tobacco and tobacco heating devices performed strongly in 2021, with both categories recording double-digit growth in volume and current value terms. This was partly because sales were emerging from a relatively low base, as these product types only became available in North Macedonia in 2019 with the launch of the IQOS and HEETS brands by Philip Morris.

E-vapour products continue to attract cigarette smokers seeking to quit

As was the case with heated tobacco products, the e-vapour products category continued to perform well in 2021 thanks to its growing appeal among cigarette smokers seeking to quit or cut down for health and financial reasons. Rising interest in new and recently launched brands, product types and e-liquid flavours also fuelled the expansion of the category, as did improvements in distribution, especially via the e-commerce channel.

Sale of smokeless tobacco products remains prohibited in North Macedonia

Smokeless tobacco was not present in North Macedonia in 2021, as the sale of chewing tobacco, moist snuff and snus is prohibited by law in the country. Given that local tobacco control legislation is gradually becoming more restrictive and closely aligned with that of EU member states, this situation is unlikely to change over the forecast period.

PROSPECTS AND OPPORTUNITIES

Migration from cigarettes to heated tobacco expected to gain momentum

The outlook for heated tobacco products over the forecast period is favourable, with this category projected to expand at a markedly faster pace than e-vapour products in current value growth terms. While this is partly because demand is emerging from a lower base, heated tobacco looks set to continue gaining popularity among consumers seeking an alternative to cigarettes that is most likely less harmful, but more closely resembles smoking than vaping when it comes to physical sensation, flavour etc.

Vaping will remain significantly more popular than heated tobacco use

Together with increasing maturity, growing competition from heated tobacco is likely to temper the expansion of e-vapour products to some extent over the forecast period. Nonetheless, it will continue to perform well overall as more cigarette smokers switch to vaping for the sake of their health or to save money, with current value sales growth expected to surpass that recorded over 2016-2021.

E-commerce set to gain ground in e-vapour and heated tobacco products distribution

Although e-commerce is already the leading distribution channel for e-vapour products in value terms, it looks set to continue gaining ground in this category over the forecast period. Aside from the convenience factor, further gains will be supported by the fact that many Macedonians have become more accustomed to online shopping during the pandemic, and developed a greater appreciation for the wide range of choices and potential for cheaper prices it provides as compared to store-based purchases.