New Zealand Vaping Industry Analysis and Outlook

For those with an entrepreneurial bent who have quit smoking successfully with the help of vaping, there is a natural tendency to want to enter the vaping industry. Vaping devices and e-liquids have the potential to be extremely profitable at retail, and people who switch from smoking to vaping invariably feel like they’ve truly changed their lives. There aren’t many industries in which it is possible to earn money and make such a profound difference in your customers’ quality of life, and that gives the vaping industry an enormous allure.

Every nation handles vaping in its own unique way from a regulatory standpoint. In addition, government officials and the media can both exert great influence over the way in which the public perceives vaping. Therefore, each nation’s vaping industry is a unique environment with its own outlook for the future. Every nation requires a slightly different strategy for the vaping entrepreneurs who want to become successful there.

What’s the outlook for the vaping industry in New Zealand, and what would your potential future look like if you were to start a vaping brand there today? Those are the things you’ll learn in this article.

What Is the Market Opportunity for the Vaping Industry in New Zealand?

New Zealand represents a unique market opportunity for entrepreneurs in the vaping industry.

• There are approximately 500,000 smokers in New Zealand. That’s about an eighth of the adult population. While the percentage of adults in New Zealand who smoke continues to shrink, the total number of smokers is increasing due to the overall growth of the population.
• The number of adult vapers in New Zealand is approaching 100,000. Assuming that a significant number of those people are former smokers who have quit, vaping has already played a major role in the reduction of tobacco use in New Zealand.
• The sentiment of the New Zealand government toward vaping is generally positive. While some of the regulations that the government has enacted aren’t entirely favourable to the industry, it’s safe to say that the government wants the industry to exist and supports the notion that vaping is a better alternative than tobacco use for smokers who can’t or won’t quit.
• New Zealand has an extremely ambitious goal of eliminating virtually all tobacco use in the country by 2025. The general sentiment in New Zealand is that switching to vaping is a valid means of quitting tobacco use.

Many of the world’s developed nations have succumbed to media bias and meddling from activist groups, but New Zealand stands apart as a nation with a far more progressive attitude toward vaping. In that sense, New Zealand may actually represent one of the most attractive markets in the world for vaping brands at the moment.

How Will Government Regulation Affect the New Zealand Vaping Industry?

The vaping industry in New Zealand is under full government regulation as of 2020. The positive aspect of government regulation is that the future of the New Zealand Vaping industry is now secure. Entrepreneurs can start vaping brands and invest in the growth of those brands without fearing that government regulation will one day destroy what they’ve built. The negative aspect of government regulation is that there are now restrictions limiting what vaping brands can do to market their products.

For vaping brands and vape shops, these are the two most crucial aspects of New Zealand’s vaping regulations.

• Retailers that don’t earn the majority of their money from selling vaping products – convenience stores, for instance – can only sell e-liquids in tobacco, menthol and mint flavours. That gives vaping brands and vape shops a potentially enormous competitive advantage because flavour variety is important to most people who vape.
• Vaping brands and vape shops are not allowed to advertise. That leaves search engine optimization and the quality of your website’s content as your primary means of getting attention.

The inability to advertise is one of the biggest challenges facing any new vaping brand in New Zealand. E-commerce vaping brands may need to invest heavily into the production of high-quality website content before they’ll receive significant web traffic.

What Is the Public Sentiment Toward Vaping in New Zealand?

The public sentiment toward vaping in New Zealand is generally positive, although parents have expressed concern that small, stylish vaping devices and sweet e-liquids could entice teens to vape. Teen vaping is a real concern because it is likely that most of the teens who experiment with vaping would never have smoked cigarettes.

However, the concern about teen vaping in New Zealand is mostly overblown as teen vaping that has progressed beyond experimentation and become a full-blown problem only really exists in the United States. Millions of U.S. teens, vape and people have I largely blamed the marketing tactics of the JUUL brand for that phenomenon. The JUUL e-cigarette has never officially launched in New Zealand – and even if the brand did launch here, it would be impossible for JUUL to use the same youth-oriented marketing tactics in New Zealand that they used during their launch phase in the United States.

Regardless of whether the concerns about the potential for teen vaping in New Zealand have real merit or not, any new vaping brand that launches here must be cognizant of the need to maintain a mature and understated image. brands in New Zealand must avoid cartoon character mascots, bright colours and packages resembling those of popular snack brands because those design elements attract the wrong kind of attention.

What Is the Best Way for a Vaping Brand to Reach Smokers in New Zealand?

With the new regulations preventing vaping brands from advertising in New Zealand, you’re going to have a major challenge on your hands when it comes to getting the word out about your brand or vape shop and reaching smokers who are interested in converting to vaping.

The good news, though, is that reaching potential customers isn’t actually going to be as difficult as you might think. Most smokers in New Zealand already know that vaping exists, and for the few people who don’t, dairies and other retailers are already doing the advertising for you by displaying vape kits next to the cigarettes. People will see those vape kits, and one of two things will happen.

• They’ll see the vape kits and search online for more information about vaping.
• They’ll buy the vape kits, and they’ll search online when they’re ready to try new flavours or buy upgraded devices.

Either way, smokers and vapers have the potential to find your brand or vape shop online because they’re going to be searching for information about what you sell. Therefore, you need to focus on capturing as much of that search traffic as possible while also taking advantage of word-of-mouth advertising to the fullest possible extent.

• If you own a brick-and-mortar vape shop, you want to capture as much traffic as possible for local searches. Add your vape shop to Google My Business and to as many local business directories as possible.
• Search engine optimization and content marketing are always your best options for capturing search traffic. Think about the questions that people are likely to have when they’re new to vaping. “Why is my vaping device leaking?” “Why does my e-cigarette taste burnt?” If you publish blog posts answering those and other common questions on your website, you’ll have a chance to capture traffic when people search for that information.
• New Zealand’s regulations allow vape businesses to offer discounts and loyalty programs. You can use that to your advantage by encouraging your existing customers to refer new customers to you. For example, you could create a low-cost vaping bundle and call it a “quit kit.” You could ask your existing customers to bring in friends and family members who smoke, and if those people buy quit kits, you can give the customers who referred those people extra loyalty points or discounts.

Does New Zealand Represent a Good Opportunity for Vaping Brands and Retailers?

The New Zealand vaping industry represents an excellent opportunity for entrepreneurs. To confirm that, you only need to examine how New Zealand compares to other developed nations in which vaping is legal.

• United States: New vaping brands can’t launch in the U.S. without first obtaining approval from the U.S. Food and Drug Administration. Going through the approval process costs hundreds of thousands of dollars per product. No vaping brands have completed the FDA approval process yet.
• United Kingdom: The vaping industry in the U.K. is fully regulated, and the cost to launch a new vaping brand there is reasonable. However, the U.K. is also one of the most competitive vaping markets in the world.
• Australia: Launching a new vaping brand in Australia is only possible if you do not sell nicotine. Liquid nicotine is a controlled substance in Australia and isn’t permitted for sale through standard retail outlets.

New Zealand, in comparison, has the right combination of low competition and fair government regulations and therefore represents an excellent opportunity for vaping entrepreneurs. In addition, New Zealand’s government and vaping industry are both very reluctant to allow Big Tobacco brands such as JUUL to enter the market. The lack of meddling by Big Tobacco has so far ensured that the level of competition in New Zealand is very fair.

Can a New Zealand Vaping Business Become Successful by Shipping to International Customers?

For now, international shipping – particularly to Australia – represents a great potential growth opportunity for vaping businesses in New Zealand. That’s because, as mentioned above, liquid nicotine is a controlled substance in Australia. However, the Australian government allows citizens to obtain prescriptions for e-liquid with nicotine and import that e-liquid from overseas sellers. Since New Zealand is nearby – thus making shipping very fast – Australian vapers frequently get their e-liquid from companies in New Zealand. There are around 2.5 million smokers in Australia, so the opportunity there is very large.

There is, however, a major drawback to making exports to Australia a major part of your business strategy. The Australian Parliament is currently considering a proposal that would outlaw private nicotine imports beginning on 1st January 2021. If the proposal goes through, vaping companies in New Zealand will no longer be able to export products with nicotine to Australia.

References

1. https://www.stats.govt.nz/news/smoking-is-a-dying-habit
2. https://www.health.govt.nz/our-work/preventative-health-wellness/tobacco-control/smokefree-aotearoa-2025
3. https://www.stuff.co.nz/opinion/119931407/vaping-rules-too-little-too-late