The year 2025 marks a turning point for Southeast Asia’s vaping industry. Now the world’s third-largest market after Europe and North America, the region is expanding rapidly but along divergent paths. Malaysia’s vaping population has surged over 600% in the past decade, Indonesia has become the ninth-largest importer of Chinese products, and the Philippines is steadily rising in global rankings. As demand rises, regulatory frameworks are taking different shapes across the region: Thailand, Singapore, Myanmar, Cambodia, Laos, and Vietnam have imposed full bans, whereas Malaysia, Indonesia, and the Philippines are moving toward tighter oversight through certification, licensing, and taxation.

Malaysia

• Market Size: 2.28 million users; MYR 2.7 billion (USD 570 million) projected by 2025.

• Market Structure: Open systems (45%), disposables (35%), closed systems (20%).

• Sales Channels：Retail stores (45%) and online platforms (25%).

• Key Regulations: Registration of manufacturers and retailers, standardized packaging with health warnings, bans on online sales, vending machines, and retail displays.

Higher compliance thresholds are expected to push out smaller players, but Malaysia is consolidating its position as a manufacturing and export hub.

Philippines

• Market Size: PHP 34.7 billion (USD 617 million) by 2025; 1.9 million users.

• Market Structure: Open systems (40%), disposables (30%).

• Sales Channels: Vape shops (~50%), followed by online and general retail.

• Key Regulations: Mandatory certification (PS Mark/ICC sticker), excise tax stamps, strict age verification, mandatory seller registration.

In early 2025, excise tax revenues surged 738% YoY, signaling a shift from informal to regulated operations. The market increasingly favors compliant local firms, while foreign entrants face high barriers.

Indonesia

• Market Size: 5+ million users; IDR 22.5 trillion (USD 1.4 billion) by 2025.

• Market Structure: Open systems dominate (70%). Disposable vapes represent around 12%.

• Sales Channels: Rapidly expanding vape shops, with 35% annual growth in store openings.

• Key Regulations: Higher minimum retail prices, mandatory licenses, product registration with BPOM, expanded e-commerce oversight.

A moderate and predictable regulatory environment has drawn international investment. PMI recently committed USD 330 million to a new facility in West Java, reinforcing Indonesia’s role as a regional manufacturing hub.

Vietnam

• Market Size: Around 1.1 million users,

• Market Structure: Disposables and high-sweetness e-liquids dominate consumption.

• Sales Channels: Primarily social media sellers, small retailers, and online platforms.

• Key Regulations: From January 2025, a nationwide ban on manufacture, import, distribution, and retail, covering both nicotine and nicotine-free products.

While aimed at curbing youth use and smuggling, the ban is likely to fuel black-market growth and push legitimate companies to relocate operations.

For manufacturers and global brands, Southeast Asia remains critical but more complex. The era of rapid, unregulated growth is ending; success will depend on local adaptation, compliance strength, and agility in execution.