Building Compliance and Growth Through Software in the E-Commerce Sector

There are a recent phenomenon that is steadily growing in popularity. They are compact, tobacco-free pouches that deliver nicotine through the oral mucosa. The high market growth, combined with strict regulations, places high demands on software and technology. Sophisticated tools, platforms, and systems are required to support compliance, e-commerce, manufacturing, and operational efficiency in this highly regulated market.

The Market for Pouches – Background and Prerequisites

Nicotine pouches are small, pre-filled pouches that deliver nicotine without tobacco. They typically contain pharmaceutical-grade nicotine, plant-based fibers – usually cellulose from eucalyptus or pine – as well as carefully selected flavorings, sweeteners and pH regulators such as sodium carbonate.

The modern consumer market started with the introduction of ZYN by Swedish Match around 2014–2016. Nowadays, there are many manufacturers and thus many varieties of the product, differing in size, strength and taste. And you can buy nicotine pouches online as well as in-store, although the latter may be limited depending on the geographical area.

When used, a pouch is placed under the upper lip, where the saliva gradually moistens it. This triggers a slow, steady nicotine release that is absorbed directly through the gums. There is no need to chew or spit, which means it is a very discreet and modern way to use nicotine.

Innovations in Design and Manufacturing

Innovation in nicotine pouches is very much about design and production automation. The pouch casing itself is mainly made of plant-based cellulose fibers, often from eucalyptus or pine, selected for their biodegradability and absorption properties. Production takes place in automated lines combining fibers, nicotine and flavourings. Advanced encapsulation methods are used to control moisture content, ensuring that the pouches stay fresh and release flavor in a pleasant way.

A relatively recent innovation in the field is bead-based fillers, sometimes called pearl technology. It enables an increased release of nicotine and flavor through improved surface contact with saliva. In addition, synthetic nicotine has emerged alongside tobacco-extracted nicotine, with the advantages of providing better purity and control of strength.

Market Adoption and Expansion

The use of nicotine pouches has spread rapidly from Sweden. Within just a few years, over 25 global markets have been reached. And the US quickly became the largest market, dominated in particular by the brand ZYN, which captured around 70 % of the market for nicotine pouches by 2023. Annual global sales rose to several billion units as the convenience of nicotine pouches resonated strongly with consumers.

In Europe, the use of nicotine pouches has also accelerated, with significant sales growth in the largest EU countries.

Regulation and Approvals

As a type of product that was new to the market, there was initially little regulation and enforcement. Thus, the categorization of nicotine pouches by regulators has, of necessity, been gradual. In the US, the Food and Drug Administration (FDA) classifies nicotine pouches as tobacco products, requiring rigorous premarket tobacco product applications (PMTAs).

In January 2025, the FDA granted its first official marketing authorizations for 20 different variants of ZYN pouches, which is an important regulatory milestone. Meanwhile, in the UK and the EU, regulatory approaches are evolving through measures such as the Tobacco and Vaping Bill, which aims to standardize control and establish clearer legal definitions. In Sweden, which was an early innovator in pouches, comprehensive guidelines on sales, packaging and marketing are already in place.

Software Solutions for the Industry

Software plays a crucial role in ensuring that all operations within the nicotine pouch market are compatible, efficient and competitive. This involves everything from smoothly operating digital compliance systems within e-commerce, to marketing tools and software for production and logistics.

Marketing Technology Under Restrictions

Digital marketing for nicotine pouches is restricted by platform rules, national advertising laws and the various brands' own compliance policies. Since paid ads often are restricted or prohibited, many brands rely heavily on SEO, affiliate partnerships and organic content. This necessitates advanced marketing techniques that can track performance without violating guidelines:

• Content management systems that include compliance filters to flag prohibited terms or images before publication.
• Social listening tools that monitor influencers' content for rule violations.
• Built-in age verification and opt-in tracking for email marketing.
• Analytics platforms that measure engagement in permitted channels, often integrated with e-commerce data to measure return on investment.

The combination of limited ad reach and high compliance requirements makes it necessary for many companies to invest in automation, workflow tools and AI-driven content analysis.

E-Commerce Platforms and User Experience Design

In the nicotine pouch market, compliance and sales have a direct impact on the user experience. E-commerce platforms in this sector are often based on standard frameworks such as Shopify or Magento, or customized headless solutions. Added to these are various features tailored to regulated goods. This includes age checks, geolocation checks and checkout restrictions for prohibited regions.

Often, customers know exactly what they want, so it is important to give quick access to different product variants based on strength, flavor or format. Personalization services can suggest complementary products or refill reminders based on purchase history, while respecting privacy laws.

Given the visual similarity between many of the different product variants, high-quality images, detailed descriptions and filter tools help customers quickly compare different options. For software developers, the challenge lies in combining compliance with an intuitive, frictionless interface that encourages repeat purchases.

Data Analytics and Customer Insights

The nicotine pouch market is competitive, and data analytics plays an important role in understanding and predicting customer behavior. E-commerce platforms collect anonymized transaction data, which analytics engines process to identify purchase frequency, favorite flavors and optimal reorder timing.

By using machine learning models, customers can be segmented based on usage patterns, thus enabling targeted campaigns and inventory adjustments. These insights can also be used in supply chain planning to ensure that popular products are always in stock. Retail analytics tools can integrate online and offline sales, providing a comprehensive view of market trends.

By linking insights about customers and their behavior to operational decisions, product ranges, pricing strategies and marketing efforts can be fine-tuned without overstepping legal limits. Such analyses are therefore a powerful driver of both efficiency and customer satisfaction.

Digital Compliance and Age Verification

With increased global scrutiny of nicotine products, the reliability and adaptability of age verification software has become increasingly important. Therefore, intelligent systems are required to sell nicotine pouches online. They must verify that buyers meet legal age requirements, which may vary across jurisdictions.

Modern solutions integrate multiple verification methods, from scanning government-issued ID documents and cross-referencing databases to AI-driven facial age estimation. Some platforms use reusable digital IDs, allowing customers to verify themselves once and log in without having to repeat the process.

These checks are often embedded directly into the checkout flow through API integrations, to make it easier for users while maintaining compliance. For physical retailers, POS-connected applications can be linked to the same verification services, thus creating a unified approach across all channels.

Developers working with regulated products must design verification logic that adapts to changing laws, accounts for regional variations, and keeps data secure. This means balancing user experience, speed and accuracy while providing audit trails for regulatory inspections.

Payment Gateways and Fraud Prevention

Another challenge when it comes to selling nicotine pouches online is payment processing, because the product type is classified as age-restricted or high-risk goods. Therefore, many common payment processors impose strict requirements for registration and transaction monitoring.

Often, specialized payment gateways designed for regulated products are used. They can integrate age verification into the payment step, thereby preventing transactions from being completed if the requirements are not met.

Fraud prevention software can be used to perform additional checks, such as IP geolocation to block orders from prohibited regions, device fingerprinting to detect suspicious patterns, and rate limiting to restrict abuse of bulk purchases.

For recurring orders, subscription billing systems must periodically re-verify customer eligibility to meet compliance requirements. Encryption, PCI DSS compliance and secure tokenization help protect sensitive payment data without creating friction for users.

By combining regulatory compliance with fraud risk reduction, payment systems become a sales enabler while maintaining legal protection for nicotine pouch e-commerce.

Supply Chain and Manufacturing Software

Behind the scenes, the production of nicotine pouches relies on a mix of supply chain and manufacturing software:

• Manufacturing execution systems (MES) monitor production lines in real time and track metrics such as moisture levels, weight consistency and packaging integrity.
• Supervisory control and data acquisition (SCADA) systems monitor equipment performance and ensure that automatic filling, sealing and labeling machines maintain accuracy and efficiency.
• Inventory management software coordinates the flow of plant-based fibers, nicotine, and flavorings, linking supplier data to production schedules in order to minimize downtime.
• Batch tracking tools provide full traceability from raw materials to finished cans, which is a requirement in many regulated markets.
• The integration between MES and ERP (Enterprise Resource Planning) systems helps align production with demand, avoiding costly overproduction or shortages.

As manufacturers expand to meet global demand, these digital systems enable greater flexibility, quality control and compliance documentation, which are critical factors in an industry where precision and regulatory compliance are non-negotiable.

Challenges and Industry dynamics

The nicotine pouch market has evolved rapidly, marked by consolidation, innovation and regulatory change. A key turning point was the acquisition of Swedish Match by Philip Morris International, which gave PMI control of ZYN, which is the dominant brand of nicotine pouches in the US.

In parallel with this development, smaller players have launched products based on synthetic nicotine, opening up a niche avoiding traditional tobacco sources. Patent activity has also intensified, particularly in moisture control and flavor encapsulation technologies.

As regulatory scrutiny increases and consumer preferences evolve rapidly, manufacturers must now balance regulatory compliance with the rapid product development. This determines how companies position themselves in an increasingly competitive and regulated industry, thus placing high demands on software developers.