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BYD enters the e-cigarette field

A traditional car maker now goes to make vape

BYD, a traditional car maker, sensed an opportunity in the vape field and wants to make a big splash in the field of electronic cigarettes.

According to the Tianyancha, on January 19, BYD Co., Ltd. published a patent on “electronic cigarette”. The electronic cigarette patent can calculate the current remaining puffable puffs of the electronic cigarette through the coordinated work of various units on the electronic cigarette, and display it on the display. In this way, BYD seems to have plans to end up making e-cigarettes in person.

But looking closely at BYD’s patent application time is March 6, 2020, more than 10 months have passed since the publication of the patent. BYD has been planning to enter electronic cigarettes for a long time. How do we think about BYD’s new action?

As an electronic cigarette ODM manufacturer, BYD has a relatively complete industrial chain in terms of business from component assembly to complete device manufacturing to product design. In this way, BYD still has certain advantages in e-cigarettes, which may also be a key factor for BYD to enter the e-cigarette industry.

But making e-cigarettes in person is still different from being an ODM manufacturer. With the change of positioning, the role will change accordingly. So, can BYD stand out in the circle of e-cigarettes, which is touted by capital?

Looking back at the country’s attitude towards the e-cigarette industry, it’s not good. Previously, relevant departments issued relevant notices prohibiting the sale of e-cigarettes to minors, and further issued notices prohibiting online sales of e-cigarettes. The main consumers of e-cigarettes are mainly young people. In the era of Internet shopping, most young people choose to shop online and prohibit online sales. This is undoubtedly a huge blow to the e-cigarette industry, which also means the future of the e-cigarette industry. The impact of regulation may be difficult to avoid.

From a competitive perspective, BYD, as a latecomer, will undoubtedly face pressure from competitors in the e-cigarette industry. In the e-cigarette industry, the Hong Kong stock market’s Smoore International and the soon-to-be-listed U.S. stock market RELX have already accounted for a considerable market share in the e-cigarette industry. According to RELX’s prospectus, as of 2020 Q1-Q3, RELX’s China market share is 62.6%, and SmooreInternational, as an in-depth supplier of RELX and YOOZ, also occupies a considerable market share.

BYD will inevitably be affected by the head effects of Smoore International and RELX. If you want to gain a foothold in the e-cigarette industry, how to coexist with influential players in the market, such as RELX and Smoore International. It’s a question worth pondering for BYD.

It cannot be denied that BYD has a certain market for e-cigarettes, but it is still a long way to go in the field of e-cigarettes. With the outbreak of the e-cigarette industry, a number of A-share companies, including Ai Shide, are also accelerating their deployment in the e-cigarette field. This means that while the e-cigarette industry is favored by the market, the future competition pressure on the entire track will also Increasing. For BYD, to get involved in e-cigarettes, is it just a small test like what the market says, or whether they want to go big? Perhaps time will give the best answer.

Source
Hong Kong Stock Research Institute

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