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99% of all e-cig consumers are cigarette smokers in search of a healthier alternative, or looking to be able to smoke in places where traditional cigarettes are not allowed. This is particularly attractive for the electronic cigarette segment as the tobacco market is $720 Billion in size, which provides a tremendous source of growth for electronic cigarettes.
The e-cig segment is still in the very formative stages, both in terms of product and market structure. The category is less than five years old and has been essentially doubling every year since inception. Importantly, less than 10% of all smokers have ever tried an e-cig, so over 90% of the opportunity is still in front of the industry. As a result, leading industry analysts predict that e-cigs will achieve from 15% to over 50% share of the broader tobacco market in the next decade.
Given the size of the tobacco Industry, this equates to a size of segment of e-cigs of between $110 Billion and $360 Billion over the next ten years.
Bonnie Herzog, from Wells Fargo Securities and one of the leading industry analysts predicts sales topping $10 billion by 2017. “The long-term growth trajectory of the category will be robust."
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