Counterfeit Surge: China-Made E-Cigarettes Flood Europe, Costing Billions

Almost half of all e-cigarettes sold in Europe originate from irregular sources, resulting in substantial financial losses for governments and raising concerns about consumer safety. A recent study by the Fraunhofer Institute reveals that approximately 90% of these illicit products reach from China, with the market estimated at €6.6 billion and projected to reach €10.8 billion by 2030.

The Scale of the Problem

Irregular products encompass those violating national tax, labeling, or approval regulations, or lacking a clear origin. The study categorizes these into illegal trade (35%) and private imports of unauthorized or untaxed goods (13%).

The financial impact is significant. In Germany alone, estimated tax losses reached €119 million in 2024. The irregular market is growing at a rate of 8.6% annually.

Shenzhen: The Epicenter of Production

The majority of Chinese e-cigarette production – around 72% – is concentrated in Shenzhen, a major city in southeastern China. Approximately 70% of vaping device manufacturers are also based there [Fraunhofer-Gesellschaft].

European Hubs and Direct Imports

Germany, the Netherlands and Belgium serve as key distribution hubs within Europe. However, there’s a growing trend of consumers ordering directly from Asia, a situation exacerbated by inconsistencies in EU regulations, benefiting platform providers.

Concerns Over Consumer Protection and Profitability

“E-cigarettes from irregular sources circumvent consumer protection and quality controls and are extremely profitable for manufacturers,” notes Horst Manner-Romberg, managing director of MRU Consulting and Publishing Company, which collaborated with Fraunhofer IIS.

Price discrepancies within the EU internal market incentivize smuggling and re-imports, putting legitimate suppliers at a disadvantage.

Logistics and Transparency

“Vape products enter the EU in standard packaging. What seem like harmless shipments adds up to a shadow market worth billions,” says Rico Back, managing partner of SKR AG, which commissioned the study. He emphasizes the demand for greater transparency and cooperation with countries of origin, particularly China, to address the issue.

Why a Ban Isn’t the Answer

Experts caution against a complete ban on e-cigarettes, fearing it would drive consumers towards the illegal sector. Instead, they advocate for:

• Uniform definitions and product classifications of e-cigarettes.
• Digital traceability of products.
• Enhanced cooperation with countries of origin, especially China.

Fraunhofer’s Global Presence

The Fraunhofer-Gesellschaft, Europe’s leading organization for applied research, conducts research through 76 institutes and research units in Germany and maintains international research centers and offices, including a representative office in Beijing [Fraunhofer Institutes and Research Establishments]. This global network facilitates collaboration and addresses challenges like the influx of irregular e-cigarettes.

China is a key strategic partner for Germany in research and development, and the second largest economy in the world [Fraunhofer-Gesellschaft].