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Customs officials seizing and cataloguing illegal vaping devices and accessories. Photo credit: ChatGPT
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Barnaby Page, Tamarind Intelligence. Photo Credit: Tamarind Intelligence
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Shane MacGuill, Euromonitor International. Photo credit: Euromonitor
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Erwin Henriquez, Euromonitor International. Photo credit: Euromonitor
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Customs officers discovering illegal vaping devices during a warehouse raid. Photo credit: Microsoft Copilot
Mapping the rise of illicit vape products is a fickle undertaking, but it also reveals that the problem is far from being a petty issue.
The global market for vaping products is increasingly defined not only by innovation and regulation but also by the rapid expansion of the illicit trade. Across continents, non-compliant e-vapor products have infiltrated supply chains, retail environments, and consumer habits, often outpacing the ability of regulators to respond effectively. While the drivers vary—from strict regulatory regimes to price disparities and enforcement gaps—the outcome is strikingly consistent: a growing share of global vaping consumption is taking place outside the bounds of legality. According to insights gathered from Euromonitor International and Tamarind Intelligence, illicit products now account for a substantial proportion of global vape product volume, presenting complex challenges for policymakers, public health authorities, and legitimate industry players alike.
Defining “illicit”: a moving target across jurisdictions Any meaningful discussion of illicit vape products must begin with the difficulty of defining them. As Erwin Henriquez, global insight manager nicotine, and Shane MacGuill, global lead, stimulation, intoxication, and emerging substances at Euromonitor International, explained to Tobacco Asia, “illicit vape products” or “non-compliant e-vapor products” encompasses “products that are manufactured, imported, distributed, or sold in breach of applicable laws or regulations in each market.”
These breaches can take multiple forms, including the absence of required authorizations (licensing), non-compliance with ingredient or nicotine limits, and evasion of taxes or duties. Crucially, Henriquez and McGuill emphasized that “the exact classification therefore depends on the regulatory framework of each market,” underscoring the fragmented nature of the global landscape.
Barnaby Page, editorial director at Tamarind Intelligence, echoed this complexity during his interview with Tobacco Asia, noting that illicit status can arise from failures in any of several areas: product compliance, retail licensing, administrative approval, or tax payment. “Failing to fully comply in any one of these areas would thus define a product as illicit,” he explained. This multi-dimensional definition highlights how a product may be perfectly legal in one jurisdiction yet illicit in another, or even within the same market depending on how it is sold or taxed.
The invisible market: measuring what cannot be seen
Researching illicit markets presents inherent methodological challenges. By their very nature, such activities evade formal reporting channels, making precise measurement difficult, if not impossible. Euromonitor International employs what Henriquez described as a “mixed-method, triangulated approach,” combining trade and expert interviews, retail and online observations, open-source intelligence, seizure data, and comparative regulatory analysis. In many cases, Henriquez pointed out, researchers rely on proxy indicators, such as discrepancies between legal sales and estimated consumption, to infer the scale of illicit activity.
The limitations are significant. Data visibility is often poor, definitions vary across markets, and the rapid evolution of products and supply routes further complicates analysis. Not beating around the bush, Henriquez readily acknowledged that findings are typically “directional insights and patterns” rather than precise figures, with transparency around assumptions being essential.
Barcelona-based Tamarind Intelligence has adopted a similarly multifaceted approach, drawing on consumer surveys, product audits, trade flow analysis, and web usage data. Barnaby Page highlighted an additional challenge: the lack of comprehensive retail data even within the legal market. “While certain geographies, types of retail, or brands may be very well-covered, invariably others are not,” he noted, making it difficult to construct a complete picture.
Global hotspots: where illicit vaping dominates
Despite these challenges, clear patterns emerge. Euromonitor International identifies several markets with extraordinarily high levels of illicit vaping prevalence. Some of these countries may be quite surprising to the uninitiated. According to Euromonitor research, Israel tops the list, with an estimated 98.51% of e-vapor retail volume classified as illicit. Ukraine follows closely at 96.59%, with the United Arab Emirates, China, and Panama also exceeding 94%.
The drivers behind these staggering figures vary but share common themes. Henriquez said that, in Israel, a combination of stringent regulatory constraints, including low nicotine caps, extensive advertising restrictions, and high taxation are the main culprits. These measures, while intended to control consumption, have instead “encouraged demand for non-compliant higher-strength and flavored products,” often supplied through informal channels at lower prices.
Ukraine, in contrast, presents a different but equally instructive case. Here, a ban on flavored products, coupled with weak enforcement, has effectively displaced demand into unregulated supply chains. During his interview, Henriquez painted a market where illicit activity is “overwhelmingly driven by policy bans… combined with weak enforcement,” resulting in widespread smuggling and domestic counterfeit production.
These two examples alone illustrate a recurring dynamic: when regulation significantly constrains legal supply without effectively suppressing demand, illicit markets tend to flourish.
The US and the scale of illicit consumption
While Euromonitor’s rankings highlight smaller markets with high percentages, Tamarind Intelligence draws attention to the US as the largest illicit vaping market in absolute terms. Barnaby Page noted that “by our definition of illicit, the majority of US vape sales” fall into this category, making it “by far the biggest illicit market in the world.”
This assessment reflects the complexity of the US regulatory environment, where product authorization processes have created significant barriers to legal market entry. As a result, a large number of products available to consumers do not fully comply with regulatory requirements, even if they are widely sold through mainstream retail channels.
Brazil and Australia likewise stand out as markets with huge illicit vaping sectors, driven by outright bans or near-total prohibitions. These cases further reinforce the link between restrictive regulatory frameworks and the proliferation of illicit trade.
Europe: lower averages, persistent outliers
In the European Union (EU), the overall incidence of illicit vaping products is comparatively lower, estimated at around 36% of retail volume in 2025. However, this average masks significant variations between individual member states. Estonia and Belgium, for instance, exhibit notably high levels of illicit activity, at approximately 89% and 84% respectively.
In Estonia, strict flavor bans and display restrictions have constrained the legal market, while demand for flavored disposable products remains strong. Limited enforcement capacity and the ease of cross-border sourcing within the EU further exacerbate the problem. Belgium, meanwhile, has seen illicit trade driven by successive regulatory tightening, including excise taxes on e-liquids and a ban on disposable vapes.
The UK: regulation, adaptation, and the illicit response
The UK provides one of the clearest real-world case studies of how regulatory intervention can reshape—and in some cases expand—the illicit vaping landscape. As of June 1, 2025, the UK implemented a nationwide ban on the sale and supply of single-use, or disposable, vaping devices, making it illegal for businesses to sell such products across all channels, including online and retail outlets.
The policy was introduced to address two primary concerns: a sharp rise in youth vaping and the environmental impact of millions of discarded devices each week. However, while the ban successfully removed disposable vapes from the legal retail environment, it also created a significant regulatory vacuum that illicit operators were quick to exploit.
Euromonitor’s Shane McGuill noted that the immediate aftermath of the ban saw consumers migrate toward alternative, legal vaping formats. Yet this shift was neither complete nor stable. Over time, the market adapted in ways that blurred regulatory boundaries, with products emerging that sit in legal grey areas, while a portion of consumers reverted to disposable devices through cross-border purchases and online channels.
Barnaby Page of Tamarind Intelligence offered a more direct assessment. According to him, by reclassifying an entire category of widely used products as illegal overnight, “it has inevitably increased the prevalence of illicit products.” This view is supported by early market indicators. Data compiled by talysis.co.uk during the very first week of the ban already showed over £1 million in illegal vape sales persisting in convenience channels, even as legal sales declined sharply.
Further evidence suggests that consumer behavior has adapted in ways that sustain illicit demand. Consumer surveys conducted ahead of the ban indicated that a majority of disposable vape users would consider turning to illicit sources if legal access were removed. Subsequent reporting by The Times indicated that a substantial share of users have indeed continued to access banned products through informal retail, online vendors, and social networks, highlighting the resilience of illicit supply chains.
At the same time, enforcement challenges remain significant.
While the UK has implemented strict penalties for non-compliance, including fines and potential imprisonment, the scale of the illicit market and the adaptability of suppliers continue to test regulatory capacity. The UK experience underscores a broader lesson: when a popular product category is removed from the legal market without fully eliminating demand, illicit trade can expand rapidly, often in more opaque and less controllable forms.
Supply chains without borders: the role of China
When it comes to the origins of illicit vaping products, both Euromonitor International and Tamarind Intelligence point to China as a central player. McGuill noted that “the illicit supply chain of e-vapor products relies heavily on products manufactured in China, regardless of the [destination] market.” This reflects China’s dominant position in global vape manufacturing, which enables both legitimate and illicit supply chains. Tamarind Intelligence’s Barnaby Page added an important nuance, emphasizing that the distinction between legal and illicit products is often context-dependent. A product that is fully compliant in one market may become illicit when exported to another with different regulations. This illustrates the complexity of cross-border regulatory compliance.
Japan: a market where illicit vaping remains marginal
In contrast to many other major economies, Japan stands out as a market where illicit vaping is not a major concern. According to Erwin Henriquez, the key differentiating factor is the high penetration of heated tobacco products (HTP) in this Far East nation, which have effectively occupied the role that e-vapor products play elsewhere in the world. Henriquez explained that although there is a niche demand for vaping products in Japan, it has “never reached the mainstream since there is already a safe and reliable alternative to cigarettes.” This widespread adoption of HTP reduces both the demand for vaping devices and the incentive for illicit supply chains to develop at scale.
Barnaby Page complemented Erwin Henriquez’s view by pointing to broader socio-economic and cultural factors. Relatively high incomes reduce price sensitivity that often drives consumers elsewhere toward illicit products. Strong social norms and a preference for conformity may further discourage participation in informal or illegal markets. Additionally, Page said, the comparatively low price of conventional cigarettes reduced the financial pressure on consumers to seek out cheaper, illicit alternatives. Taken together, these factors create a market environment in which both demand for illicit vaping products and the incentives to supply them remain limited—an outcome that contrasts sharply with many other regions.
Consumer behavior and market substitution
Underlying the growth of illicit vaping markets is a fundamental economic principle: consumers respond to price and availability. When legal products become more expensive or less accessible due to regulation, many consumers turn to cheaper, illicit alternatives. In some cases, alternative nicotine products can mitigate this effect, as seen in Japan. In others, such as the United Kingdom, the removal of a popular product category has led to substitution effects that include both legal alternatives and illicit sourcing.
Regulatory gaps and unintended consequences
The global rise of illicit vaping products highlights the unintended consequences of regulatory policies. While measures such as flavor bans, tax hikes, and product restrictions are often implemented with public health objectives in mind, they can also create incentives for illicit trade if not carefully calibrated.
South Korea provides a cautionary example for this. The country’s regulatory loopholes around synthetic nicotine contributed to a high level of non-compliance once addressed. This illustrates how both the presence and the closure of regulatory gaps can influence illicit market dynamics. But perhaps the most striking finding from Euromonitor International’s diligent research into the topic of illicit vaping is that over 75% of global e-vapor trade volume turnover is driven by illicit markets. It is an incredible number! Yet this striking figure underscores unmistakably the scale of the challenge and it suggests that the illicit trade is not a merely marginal phenomenon but a defining feature of the global vaping sector.
Toward a more balanced approach
Addressing the global prevalence of illicit vaping products will require a nuanced and balanced approach. As the experiences of markets such as the United Kingdom and Japan demonstrate, outcomes depend heavily on the interaction between regulation, enforcement, consumer behavior, and the availability of alternatives. Both Euromonitor International and Tamarind Intelligence highlighted during their respective interviews with Tobacco Asia the importance of understanding local market dynamics and the limitations of available data. Policymakers must navigate these complexities while remaining mindful of the unintended consequences of their actions.
Ultimately, the global illicit vaping market reflects deeper tensions between regulation and demand, control and access, legality and practicality. Striking the right balance will determine whether future policy interventions are going to succeed in curbing illicit trade—or inadvertently contribute to its continued expansion.