Australia E-Cigarette Market, By Product Type (Disposable, Rechargeable, Modular), By Flavor (Tobacco, Non-Tobacco), By Sales Channel (Specialty Stores, Tobacconist, Online, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Australia E-Cigarette market was valued at USD 486.16 million in 2024 and is anticipated to grow USD 663.09 million by 2030 with a CAGR of 5.37% during the forecast period. The Australian e-cigarette market is experiencing significant growth, driven by the increasing demand for alternatives to traditional smoking. As smoking rates decline, more consumers are turning to e-cigarettes as a potential smoking cessation tool or recreational product. The market is characterized by a shift toward rechargeable devices, nicotine-free options, and a growing preference for online sales channels. However, regulatory challenges and restrictions on nicotine-based products have impacted the market, particularly with recent government measures targeting the sale and distribution of e-cigarettes.

Key Market Drivers

Shift in Consumer Preferences Toward Smoking Alternatives

A primary driver of the e-cigarette market in Australia is the growing shift in consumer preferences from traditional tobacco products to alternative nicotine delivery systems such as e-cigarettes and vaping devices. This trend is particularly noticeable among younger adults and individuals seeking to quit smoking. According to the Australian Institute of Health and Welfare, daily e-cigarette use in Australia rose significantly from 0.5% in 2016 to 3.5% in 2022–2023. This increase highlights a growing demand for perceived "safer" alternatives to combustible cigarettes.

The appeal of e-cigarettes lies in their reduced harm perception, variety of flavors, and customizable nicotine levels, making them an attractive option for smokers attempting to cut down or quit. This trend is also being driven by greater health awareness among Australians, with many viewing vaping as a less harmful option despite ongoing scientific debate over its long-term safety. Additionally, the growing cultural normalization of vaping among young adults and its portrayal on social media platforms has further fueled its popularity.

Regulatory Landscape and Government Reforms

Regulatory changes are a significant market driver, shaping the availability and legal framework for e-cigarette sales in Australia. The country has traditionally adopted a cautious and restrictive stance on vaping, primarily to protect public health and prevent youth uptake. Recent developments in 2024 reflect a shift toward tighter control, including banning the importation of disposable vapes from January 1, 2024, and moving all legal vape sales exclusively to pharmacies from October 2024.

One notable regulatory reform is the elimination of the prescription-only requirement, allowing adults to access therapeutic vapes through pharmacies without a doctor’s approval. This policy change aims to streamline access for smokers genuinely seeking a cessation tool while limiting the commercial proliferation of recreational vaping products.

Emergence of a Thriving Black Market

Despite regulatory efforts, a robust black market for e-cigarettes continues to flourish in Australia, serving as a key market dynamic. According to multiple reports, over 90% of e-cigarette sales are currently sourced through illicit or unauthorized channels. This underground market undermines public health objectives and complicates government efforts to ensure quality and safety standards for vaping products.

The widespread availability of unregulated products, often sold through convenience stores, online platforms, and social media, contributes to a price-driven, easily accessible consumer base—particularly among minors. Enforcement of vape laws has proven difficult, given the decentralized and covert nature of these distribution networks.

Download Free Sample Report

Key Market Challenges

Regulatory Complexity and Enforcement Gaps

One of the most pressing challenges facing the e-cigarette market in Australia is the complex and evolving regulatory landscape. While the government has implemented a series of reforms aimed at curbing youth access and ensuring product safety, the pace and nature of these changes have created significant uncertainty for manufacturers, retailers, and consumers alike. For instance, as of January 2024, the government banned the import of disposable vapes, and from October 2024, all vape sales will be restricted to pharmacies, with no prescription required. These measures are part of Australia’s effort to position e-cigarettes as therapeutic tools rather than recreational products.

However, the transition from a largely unregulated market to a pharmacy-only model has proven difficult to enforce. There are major concerns regarding implementation timelines, compliance monitoring, and the lack of clarity surrounding which products will be classified as “therapeutic” and thus eligible for pharmacy sale. Furthermore, major pharmacy chains have expressed hesitance or outright refusal to stock nicotine vapes, citing ethical concerns, health risks, and reputational damage. This hesitation complicates access for smokers genuinely seeking alternatives to traditional cigarettes and raises doubts about the effectiveness of the government’s regulatory overhaul.

Public Perception and Health Concerns

Another major challenge for the Australian e-cigarette market is the persistent public skepticism regarding the health implications of vaping. While e-cigarettes are often marketed as harm-reduction tools for smokers, concerns remain about their long-term effects, especially among non-smokers and adolescents. Medical organizations in Australia remain divided on their use, with some promoting them cautiously as a cessation aid and others warning of potential health risks, nicotine addiction, and gateway effects to traditional smoking.

The rising prevalence of vaping among youth has intensified public concern. Flavored products and appealing packaging have drawn criticism for attracting underage users, leading to widespread media coverage and negative public sentiment. This perception impacts the willingness of healthcare providers and pharmacies to engage in the legal distribution of vaping products, despite regulatory efforts to frame them as therapeutic tools.

Key Market Trends

Growing Consumer Shift Toward Nicotine-Free and Low-Nicotine Products

A significant trend emerging in the Australian e-cigarette market is the increasing demand for nicotine-free and low-nicotine vaping products. As health awareness rises and more consumers seek alternatives to traditional smoking, a segment of users is opting for products that offer the sensory experience of vaping without the addictive properties of nicotine. This shift is particularly prevalent among younger adults and former smokers who are gradually reducing their nicotine intake or using vaping as a transitional tool for quitting altogether.

The shift is also partially driven by Australia's stringent regulations surrounding nicotine-based vaping products. Since nicotine-containing e-liquids have historically required a prescription, many users turned to nicotine-free options to bypass legal barriers. Although reforms in late 2024 will remove the prescription requirement and allow vape sales in pharmacies, the established consumer habit of using low-nicotine alternatives is likely to persist and grow. As a result, manufacturers are investing in a broader variety of non-nicotine products with flavors and features that mimic the smoking experience.

Persistence of the Illicit Market and Demand for Flavored Vapes

Despite the introduction of stricter laws, the illicit market for e-cigarettes in Australia remains strong—largely driven by continued demand for flavored and disposable vapes that are now banned or heavily restricted under new regulations. Many consumers, especially younger users, still prefer these products due to their convenience, wide flavor variety, and low upfront costs. These preferences keep fueling illegal imports and unauthorized retail activity, including sales through social media, informal vendors, and unregistered online platforms.

This persistent demand for banned products presents a major challenge for regulators and an ongoing trend within the market. While the legal framework has tightened, enforcement has proven difficult. As a result, illegal products continue to circulate, often without quality control, proper labeling, or safety assurance.

Segmental Insights

Product Type Insights

The rechargeable segment was the dominating category in the Australian e-cigarette market, driven by consumer preference for cost-efficiency, sustainability, and convenience. Rechargeable devices, which allow users to replace or refill e-liquids, offer long-term value compared to disposable alternatives. As disposable vapes face tighter regulations and higher costs, rechargeable e-cigarettes provide an eco-friendlier option, appealing to both regular smokers seeking alternatives and those aiming to reduce their nicotine intake gradually. Additionally, advancements in device technology and customization options have made rechargeable products more attractive, further solidifying their market dominance in the country.

Flavor Insights

The tobacco flavor segment was the dominant category in the Australian e-cigarette market, driven by consumer preference for familiar tastes that closely resemble traditional smoking experiences. Many smokers transitioning to e-cigarettes prefers tobacco-flavored e-liquids, as they offer a similar sensory experience to regular cigarettes while reducing harmful effects. This segment benefits from established consumer trust and is considered an effective smoking cessation tool. Despite the rising popularity of other flavors, tobacco remains the leading choice, particularly for those seeking a smoother transition from combustible cigarettes to vaping, solidifying its dominance in the market.

Download Free Sample Report

Regional Insights

The Australian Capital Territory (ACT) and New South Wales (NSW) dominated the e-cigarette market, accounting for a significant share of sales in the country. These regions lead due to their large, urban populations and higher levels of consumer awareness regarding alternative smoking products. Sydney, the capital of NSW, is a key market hub, where the demand for e-cigarettes is driven by both smokers seeking alternatives and younger, health-conscious individuals. The availability of vape products through both legal and illegal channels in these regions contributes to their market dominance, making ACT and NSW key players in the Australian e-cigarette market.

Recent Development

• In Dec 2023, Australia's online e-cigarette retailer, CheapVape, has introduced a new range of disposable vaping products, including brands such as IGET, HQD, PuffMi, Gunnpod, Mr FOG, Waka Smash, RELX, and YUOTO. The company aims to provide affordable and high-quality options to consumers, offering a diverse selection to meet various preferences.

• In July 2023, Philip Morris International has initiated agreements with select Australian pharmacies to supply its VEEV vaping products at below-cost prices, contingent upon pharmacies signing direct supply contracts with the company. This strategy includes offering an 80% margin on the products, with stipulations that pharmacies sell the nicotine pods and devices at prices lower than those available through wholesalers.

Key Market Players

• Njoy Inc.
• Philip Morris International Inc.
• Japan Tobacco Inc.
• Reynolds American Inc.
• International Vapor Group (IVG)
• British American Tobacco p.l.c.
• Juul Labs Inc.
• J Well France
• Nicotek, LLC
• Shenzhen Kanger Technology Co., Ltd.

Report Scope:

In this report, the Australia E-Cigarette Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Australia E-Cigarette Market, By Product Type:

o   Disposable

o   Rechargeable

o   Modular

• Australia E-Cigarette Market, By Flavor

o   Tobacco

o   Non-Tobacco

• Australia E-Cigarette Market, By Sales Channel:

o   Specialty Stores

o   Tobacconist

o   Online

o   Others

• Australia E-Cigarette Market, By Region:

o   Australia Capital Territory & New South Wales

o   Northern Territory & Southern Australia

o   Western Australia

o   Queensland

o   Victoria & Tasmania

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Australia E-Cigarette Market.

Available Customizations:

Australia E-Cigarette Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

Australia E-Cigarette Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]