Electronic Cigarette Market One to Watch According to Goldman Sachs
electronic_cigarette2
Electronic Cigarette Market One to Watch According to Goldman Sachs
Banking giant Goldman Sachs has named the electronic cigarette industry the number one market with the potential to grow and command greater investment in the next few years. The bank picked eight different industries for investors to monitor and consider investing in and named electronic cigarettes as the most promising industry with the highest potential.
As part of the Goldman Sachs report, the bank has predicted that electronic cigarettes could completely disrupt the tobacco industry: one of the most valuable industries in the world.
Until now, the tobacco industry has existed unchallenged by other markets and competitors, only troubled by regulations and the restrictions places by authority groups. The electronic cigarette has begun to present the first genuine threat to the tobacco status quo since tobacco mass production was born in the late 19th century.
Goldman Sachs has predicted that electronic cigarettes will accelerate the volume decline of traditional tobacco cigarettes and could represent 10% of the tobacco industry by 2020. This is a slightly more conservative estimation than the one made by market analysts Wells Fargo who predicted that electronic cigarettes could account for the Lion’s share of the tobacco industry before the end of the decade.
Goldman Sachs has highlighted the benefit of electronic cigarettes not being subjected to increased levels of taxation. This gives them a distinct advantage over traditional tobacco products that incur significant price rises due to the higher tax placed upon them. In the US, on average every pack of cigarettes sold sees $3.16 go to different government agencies via excise taxes, fees and settlement payments. This means that the savings go directly to the vaper, particularly those in high-taxation states.
It has been predicted that the short-term growth and popularity will lead to greater innovation and product development, increasing its impact in the long term and legitimize the market in the eyes of reluctant observers and critics.
The banking group also appears to be unconcerned about potential regulations impacting the e cig market - observing that whilst they may be regulated, the FDA would see strict restrictions as a backwards step in terms of public health.
The other eight industries that Goldman Sachs suggests investing in are Cancer Immunotherapy, LED Lighting, Alternative Capital in P-CAT Reinsurance, Natural Gas Engine Technology, Software Defined Networking, 3D Printing and Big Data.
30th October 2013, 12:37
AI
