Big Tobacco’s Next Move

Electronics cigarettes have put Big Tobacco in an interesting position – for now, at least.

There has been some speculation in the news and media over why more tobacco companies aren’t buying up e-cigarette companies like Lorillard did with Blu Cigs a few months back. While several more large tobacco firms are announcing plans to enter the e-cig market, such as Philip Morris, British American Tobacco, Imperial Tobacco, and Japan Tobacco, most of the other corporations are content to sit back and wait.

Why would they want to do that? After all, electronic cigarettes are taking an ever-increasing slice of Big Tobacco’s pie. Granted, they’re still a small fish in big pond, but their market share is growing faster than any other tobacco alternative or smoking cessation product.

The main reason is that e-cigarettes are still an emerging market that has yet to become fully established and accepted. While there are certainly frontrunners who have a degree of brand recognition and dominance, such as Green Smoke, there are still far too many competitors in the market for a truly safe acquisition to be made. As more and more sub-par brands die off, the quality brands that remain will control a significant portion of the market. Then Big Tobacco can move in and start buying out those brands to ensure their market control.

What’s still very much unclear is whether this will help or hurt electronic cigarettes. I suppose we’ll just have to wait and see.

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