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The implementation of new regulatory frameworks across Southeast Asia in 2025 marks a pivotal moment for the region’s vaping industry. With mandatory product certification, stricter advertising rules, and standardized labeling requirements taking effect, the market is entering a phase of rapid formalization.
Southeast Asia has emerged as the third‑largest vape market in the world, after Europe and North America. Among the countries in the region, Malaysia has shown powerful momentum. According to the 2023 Global Adult Tobacco Survey, Malaysia’s vaping population has grown by over 600 percent in the past 12 years.
Chinese customs data show that in both September and October 2024, Malaysia ranked fifth among all countries for Chinese exports of vape devices and atomization components, with the export value in October reaching 268 million RMB. Indonesia has also shown remarkable growth, surpassing Canada to become the ninth-largest destination for Chinese vape exports, while the Philippines and other regional markets have steadily climbed into the global top 20. This surge highlights Southeast Asia’s growing significance in the global vape industry.
At the same time, the regulatory environment is evolving rapidly. Six ASEAN member states: Thailand, Singapore, Myanmar, Cambodia, Laos, and Vietnam have enacted full bans on e-cigarettes. In contrast, countries like Indonesia, Malaysia, and the Philippines are tightening their regulatory frameworks and increasing tax oversight to promote more standardized and transparent industry development.
Malaysia has one of the region’s most developed vape markets, with 2.28 million adult users and a projected value of MYR 2.7 billion (USD 570 million) by 2025. The product landscape is dominated by open-system devices (45%), followed by disposables (35%) and closed systems (20%). The main distribution channels are physical retail stores (45%) and online platforms (25%).
In October 2024, the Control of Smoking Products for Public Health Act 2024 (Act 852) officially came into force. Key regulatory provisions include:
- Mandatory registration for all manufacturers and retailers;
- Standardized packaging with health warnings;
- Ban on online sales and vending machines
- Display restrictions and age verification at retail points
Some states have enforced a full ban on the sale and use of nicotine products.
This legislation marks the beginning of a “post-regulation” era for the Malaysian vape market. Higher compliance thresholds may force out smaller players. Despite retail restrictions, Malaysia continues to strengthen its role as a manufacturing and export hub, supporting the sector’s overall growth. Compliance capabilities and international expansion are becoming key competitive factors.
The Philippines is one of the fastest-growing vape markets in Southeast Asia. By 2025, the market is expected to exceed PHP 34.7 billion (approx. USD 617 million), with over 1.9 million adult users. Open-system devices account for 40%, while disposables represent roughly 30%. The primary purchase channel is vape shops (around 50%), followed by online platforms and general retail.
Starting January 2025, the government will fully implement a dual compliance mechanism, marking a new regulatory era. Key measures include:
- All vape and heated tobacco products must carry the Philippine Standard (PS) Mark or Import Commodity Clearance (ICC) sticker;
- Excise tax stamps are required on all legal products—unstamped items are deemed illegal;
- Strict age verification is mandated for all online sales;
- Sellers must register with local authorities and comply with store-level regulations;
- A six-month grace period is granted for inventory clearance, alongside crackdowns on illegal storage and unregistered products.
In H1 2025, with tax stamp and certification systems in full effect, vape excise tax revenue rose 738% YoY, reaching PHP 1.5 billion (approx. USD 25.9 million). This shift indicates a strong transition from informal to regulated operations. The government’s intensified actions against smuggling and illegal warehousing are reshaping the market, accelerating concentration toward compliant players. The regulatory shift has made it extremely difficult for foreign brands to enter, while local firms benefit from policy clarity. The market is evolving toward a “compliance dividend” model, favoring those with strong regulatory insight and government relationships.
Indonesia is the fourth-largest tobacco-consuming country in the world and a major manufacturing and distribution hub for vaping products in Southeast Asia. Over 200 local vape manufacturers and traders operate in the country. Indonesia also has the region’s highest consumption potential, with over 5 million adult users. The market is projected to reach IDR 22.5 trillion (approx. USD 1.4 billion) by 2025. Open systems account for 70% market share, while disposables remain a niche category. Vape retail is expanding rapidly, with an annual growth rate of 35% in store openings.
In June 2024, the government announced regulatory changes effective January 2025:
- Minimum Retail Price (MRP) will be increased for all vape products;
- Retailers and importers must obtain legal distribution and sales licenses;
- Products must be registered with BPOM (National Agency of Drug and Food Control) and undergo ingredient reviews;
- Regulatory oversight will extend to e-commerce and small retail stores, ensuring full licensing across channels.
The regulatory approach is relatively moderate, offering greater predictability for both domestic growth and foreign investment. This stability has attracted major international tobacco companies. In 2025, Philip Morris International (PMI) announced a USD 330 million investment via its subsidiary Sampoerna to build its seventh global smoke-free product facility in Karawang, West Java. Indonesia is fast becoming one of the most attractive vape investment destinations in the region, thanks to its improving regulatory and business climate.
Vietnam’s vaping industry has largely developed through informal channels. Its core user base consists of young urban adults, with an estimated 1.1 million adult vapers. Disposables and high-sweetness e-liquids dominate the market. Sales are mainly conducted via social media, small-scale retailers, and online platforms. After years of regulatory vacuum, 2025 marks a major turning point.
In June 2024, Vietnam’s National Assembly passed a total ban on vaping and heated tobacco products, effective January 1, 2025. Key components include:
- Full prohibition on the manufacture, import, distribution, and retail of all vape and heated tobacco products;
- Ban applies to both nicotine and nicotine-free variants;
- Advertising, promotion, and product display are all banned;
- Enforcement will be carried out jointly by customs and public security agencies.
The ban targets rising youth vaping and smuggling issues but may trigger unintended consequences, including black market growth and enforcement complexity. Most legitimate companies are expected to exit or shift operations to neighboring countries. Vietnam’s long-standing reliance on a “grey supply chain” will be disrupted, potentially undermining the country’s role in the regional alternative nicotine industry.
Southeast Asia’s vaping industry is entering a new phase of regulatory divergence. Unlike Europe’s unified tightening trend, the region is evolving along three distinct trajectories.
Malaysia is formalizing its regulations with a framework modeled on the EU’s TPD system, offering a clearer and more development-friendly path. While domestic restrictions are increasing, the overall direction remains stable and constructive, removing long-standing uncertainty and supporting the industry's continued growth.
Indonesia is taking a phased approach to regulation, offering a relatively stable and investor-friendly environment. Policy clarity and gradual enforcement make it the most favorable market for long-term growth, especially for major tobacco and vape companies seeking to invest.
The Philippines has adopted the strictest model in the region, with dual-layer compliance through mandatory product certification and excise tax stamps. Government enforcement is aggressive, raising barriers for foreign entrants but opening up more opportunities for local players, especially those skilled at working with regulatory authorities.
With regulatory tightening sweeping across Southeast Asia, unforeseen challenges are inevitable for the region’s primary supply backbone—Chinese manufacturers. Still, the market will keep moving, and the value will continue to be captured. The era of rough, untamed expansion is coming to an end. Going forward, it will be the companies with a clear focus, locally adapted operations, and agile execution that find room to survive and grow.
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