Competition is high in the tobacco industry: there's a high profit margin to be made and millions of clients at stake, longtime smokers who like to light up on their break or while out drinking with friends. However, many millennials have made the jump to e-cigarettes, which has a huge impact on the tobacco industry. Globally, there are $5 billion in e-cigarette sales each year.

That's a huge blow to the traditional tobacco cigarette.

According to the most recent studies, if a young person has tried an e-cigarette, there is a three times greater chance of them smoking traditional cigarettes in the future. E-cigarettes can also lead to a longterm addiction to tobacco. Their flavored taste and smell can tempt even those young people who can't stand the smell of cigarettes. However some statistics point to a drop in interest in the e-cigarette. In 2015-2016, e-cigarette use among young people was up 1.5% to 16%, but in the last year it has fallen 11%.

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But big tobacco is not standing idle as e-cigarettes remain popular. Altria Group Inc. (MO  ), Lorillard Tobacco Co. and Reynolds American Inc. (RAI  ) are on the offensive and have begun to take on smaller e-cigarette manufacturers. The well-known e-cigarette brand VUSE of R.J. Reynolds Vapor company belongs to Reynolds American. And British Tobacco (NYSEMKT: BTI), the largest producer in Europe, has been marketing e-cigarettes under the Vype brand since 2013. Recently, Vype has expanded into Central and Eastern Europe. This is thanks to the acquisition of CHIC Group, one of the largest networks of distributors in Poland.

Altria, which belongs to Philip Morris (PM  ) recently hit a record high at $77 per share, which might have been influenced by the change in its product focus toward "healthier" alternatives to traditional cigarettes. In other news, Lorillard recently paid $135 million for Blu, yet when R.J. Reynolds bought Lorilland, they sold off the Imperial Tobacco e-cigarette brand. These companies have a huge market to compete over: in 2015 5.5 trillion cigarettes were sold to close to a billion smokers around the world. 80% of smokers live in middle to low income nations.

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However, recently many funds have decided to sell their stake in tobacco corporations. These are not financial decisions but ethical ones: these funds support the efforts of the World Health Organization (WHO) in lowering the number of cancerous illnesses caused by smoking. According to WHO, close to half of smokers die from the habit, meaning that cigarettes kill over 7 million people yearly. Even with government effort to curb smoking (such as pictures on packs showing the adverse effects of smoking), the profits of tobacco corporations continue to rise. The Bloomberg Index for the tobacco industry has risen 351% since 2009. For companies that diversified and invested in e-cigarettes: the value of the e-cigarette industry has risen from $50 million in 2005 to $7.5 billion. So it's not e-cigarettes that are are threatening the tobacco industry. On the contrary, they're fueling it.