Mark Benson Wonders….
If you look at the headlines regarding tobacco companies you could be mistaken for assuming that they are struggling financially with their market under pressure, smoking bans across the globe and the introduction of a new competitor in the shape of electronic cigarettes. Indeed many tobacco cigarette companies have also arranged compensation deals with authorities across the world giving the impression that they are haemorrhaging cash. However, is this really the situation?
While there is no doubt that the financial strength of the world’s tobacco giants has been hit by the diminishing market, compensation arrangements and the threat from electronic cigarettes, these are still enormously wealthy companies. There are billions upon billions of dollars available in war chests many of which have been spent mopping up some of the more prominent independent electronic cigarette companies.
Can ecigarette companies compete financially with their tobacco counterparts?
At this moment in time there is no doubt that electronic cigarette/vaping companies are operating in growth markets which are expected to continue expanding for many years to come. The situation regarding regulations is one which is under review both in the US and Europe and will eventually be resolved – although this could be years down the line!
In a normal business environment you’d expect at least one independent electronic cigarette company to combat the tobacco giants with regards to financial strength and influence. We may well see one of the currently independent electronic cigarette companies leading the market forward, we may see them ignoring the tobacco dollars waved in their face but, ultimately, will money talk?
Have electronic cigarettes come to the market too late?
If electronic cigarettes had broken into the mass market say 20 or 30 years ago there is every chance that we would already be looking at a financial beast able to do battle with the tobacco giants. The situation is very different today with electronic cigarettes only breaking out from their niche marketplace at the turn-of-the-century. The problem is that because electronic cigarette companies offer significant growth in the short, medium and longer term, as well as a direct threat to tobacco companies, they are most certainly at risk.
Anyone who follows the electronic cigarette industry will be well aware that tobacco giants have already bought heavily into the electronic cigarette industry snapping up some of the better-known brand names. The problem for investors in electronic cigarette companies is nobody is truly certain about the long-term marketplace and any potential health issues. As a consequence, the tobacco dollars waved in the face of electronic cigarette investors are akin to a “jam today, not jam tomorrow” situation. Therefore, slowly but surely the tobacco giants are mopping up the major players in the electronic cigarette industry and improving their influence and their firepower along the way.
We may look back on the electronic cigarette industry in 10 or 20 years and see the sector dominated by the tobacco giants. There is every chance we are on the verge of a “déjà vu” with the tobacco companies holding massive influence and massive sway in the industry. They could potentially end up with the best of both worlds, holding the leading tobacco cigarette brands as well as the leading electronic cigarette companies. So, to answer the simple question, it seems unlikely that we will see an electronic cigarette company with the same financial power and influence as their tobacco counterparts. Now, wouldn’t that be a shame?
For more information about SoShiSha E Liquids and the various products available please visit the SoShisha website.