As tobacco continues to feel the heat from increasingly burdensome legislation and consumer downtrading, one market is doing very nicely: e-cigarettes - or vapourised nicotine delivery systems to give them their full name.

The UK retail market has rocketed from just £2.5m to £23.9m in the past year [Nielsen 52 w/e 5 January 2013]. This 862.8% surge does not even tell the full story as a sizeable number of e-cigarettes are sold online directly by the manufacturers (and not measured by Nielsen).

Yet despite this phenomenal growth, the market still has plenty more scope for growth, not least because manufacturers can do something tobacco suppliers can’t: advertise.

Last month, the first-ever ad for an e-cig brand hit British TV screens when supplier Skycigs aired an ad for its brand Skystart. This was followed a week later by an ad for E-Lites.

So sudden has been the explosion of interest in e-cigarettes that everyone seems to have been caught on the hop. Some quarters are now raising concerns over how safe the products are and the government is still working out what to do in terms of licensing and tax. A Medicines & Healthcare Regulatory Agency report on requirements for licensing e-cigs is due shortly.

The big tobacco companies also seem to have been caught napping, although they are starting to wake up. In September, Imperial Tobacco invested in an unnamed third-party e-cigarette manufacturer and in December, BAT bought UK e-cig-maker CN Creative.

It is important to adapt to the changing landscape, stresses Kingsley Wheaton, BAT director of corporate and regulatory affairs. “Our core business is tobacco, and it will remain so, but we’ve always made it clear that our goal is to provide those adult smokers who are seeking safer alternatives to cigarettes with a range of reduced-risk products that will meet their varying needs,” he says.

Tobacco - going upin smoke?