Malaysia’s e-cigarette industry may be facing its most severe moment.

Recently, Malaysian Health Minister Dzulkefly Ahmad stated that a complete ban on e-cigarettes is "no longer a question of 'if'," and that the relevant proposal will be submitted to the cabinet after completion of research. Dzulkefly revealed that since the implementation of the Public Health Tobacco Products Control Act 2023 (Act 852), the number of e-cigarette products on the market has dropped sharply from 6,824 to 2,794 by June 2025, a decrease of nearly 60%.

In order to promote this potential ban, the Malaysian Ministry of Health has taken the lead in establishing an inter-departmental special committee to conduct inter-departmental discussions with multiple departments including the Ministry of Finance, Ministry of Domestic Trade and Consumer Affairs, Ministry of Investment, and Attorney General's Chambers to promote the legal and implementation framework of a comprehensive ban.

The move has sparked widespread concern among industry groups such as the Electronic Cigarette Sales and Retail Association, which warned that a blanket ban could destroy the legal market and force millions of consumers to turn to the untraceable and more risky underground black market, thus defeating the purpose of the policy.

At this critical juncture, 2Firsts spoke with Kitson Tan, Business Development Director of ASDF, a leading Malaysian e-cigarette brand.

Kitson believes that all current market changes are due to strong government regulation, particularly the implementation of Act 852. Market regulation is "accelerating market reshuffles," but it also "creates a healthier competitive environment" for companies that proactively prepare for compliance. Furthermore, the black market and smuggled products remain major issues, creating "extremely unfair competition" for law-abiding companies. Furthermore, in current and future competition, price is no longer the key to success.

"The multiple rounds of enforcement over the past year have been centered around implementing Act 852," Kitson noted. This law focuses on three key areas: the protection of minors, product legality, and tax regulation. While retailers are experiencing short-term pain as a result of the removal of a large number of unlabeled and non-compliant products from the market, this has also created a healthier competitive environment for companies like ASDF that were early adopters of compliance strategies.

Regarding the Ministry of Health's signal that it is considering banning open e-cigarettes, Kitson predicts that if this move is implemented, it will greatly drive the market towards disposable and closed systems.

"A complete ban on advertising and display is the biggest challenge," Kitson admitted. "It not only blocks all traditional marketing methods, but also requires extreme restraint in product packaging and in-store displays."

In the short term, compliance costs for e-cigarette brands will soar: brands will need to invest in developing dedicated enclosed display cabinets, redesigning their entire product packaging, and conducting rigorous compliance training for retail staff.

Kitson emphasized that ASDF has completely updated its restricted "cassette" design and launched a new series that complies with Akta 852. They have also invested in establishing a compliant POSM (point-of-sale non-obvious display system) and strengthening cooperation with compliant retail networks to ensure brand exposure within legal frameworks.

Furthermore, he stated that the company is actively shifting towards "educational content dissemination," maintaining deep connections with users in this "silent" market through membership communities and responsible consumption advocacy.

Despite increasingly stringent regulations, Kitson believes the biggest challenge remains enforcement. "The black market and smuggled products remain major issues."

He suggests the government should strengthen import controls, "only in this way can we create a level playing field for law-abiding brands."

Furthermore, he observes that as regulations tighten, distributors are increasingly favoring compliant brands, and market products are showing a new trend toward smaller volumes, minimalist designs, and high technical stability.

Kitson offers three pieces of advice to new brands hoping to enter the Malaysian market:

First, allocate ample time and budget for product registration and packaging review.

Second, your marketing strategy must be based on "zero advertising" and explore innovative, compliant user communication methods.

Finally, in this fiercely competitive landscape, the key to success is no longer price wars, but rather technical strength, consistent taste, and a comprehensive after-sales service system.