General Discussion
In reply to the discussion: E-cig companies are targeting youth -- Democratic investigation says. [View all]pnwmom
(110,263 posts)They accomplished that by buying out Blue e-cigs. But all the manufacturers want to sell more e-cigs to more people -- which means getting people hooked as soon as possible to their products -- and not relying on the steadily decreasing market of cigarette smokers for all of their sales.
http://www.fool.com/investing/general/2014/03/18/new-competitors-enter-threatening-lorillards-domin.aspx
Lorillard (NYSE: LO ) dominates the US' juvenile electronic cigarette, or e-cig, market with its brand of Blu e-cigs. Indeed, during the fourth quarter of last year, Blu's share of the domestic e-cig market reached 50%. However, unfortunately Lorillard has acquired this market dominance at the expense of profitability, as the tobacco company has spent millions on advertising the brand to increase awareness.
Nevertheless, during the past year or so, Lorillard has had a relatively easy time dominating the e-cig market as it remains by far the largest company operating within the national market. The rest of the e-cig market remains highly fragmented, with 250 different brands trying to chase a relatively small domestic market of $1 to $2 billion, which makes it easy for Lorillard, with its multi-billion dollar marketing and development budget, to push smaller peers out of the way. However,Reynolds American (NYSE: RAI ) and Altria (NYSE: MO ) will soon roll out their e-cig offerings nationally, and this could stop Lorillard in its tracks.
Quietly building support
While Lorillard has been chasing market share during the past year, both Reynolds American and Altria have been testing their products in single states, identifying consumers' needs and wants before committing themselves to national roll-outs. In particular, Reynolds has developed the VUSE digital vapor cigarette which it has rolled out in Colorado, and VUSE has quickly become consumers' e-cig product of choice.