Is there still a second spring in China vape industry?
How will China e-cigarette market go in 2020? Let’s take a bold prediction.
Market demand has been proven
Whether online or offline, the hot sales of e-cigarettes have fully proved the real market demand for e-cigarettes and the pursuit of new things by Chinese people.
Compared to some smokers, e-cigarettes do have a addiction relief effect. And the health degree of qualified electronic cigarettes is far less than that of cigarettes.
Most brands exit the market
At the time of the most popular disposable electronic cigarettes in 2019, there were more than 3,000 e-cigarette brands nationwide. At Shenzhen Shajing, 3,000 orders can be processed by OEM. The e-cigarettes of various styles are dazzling.
With the tightening of policies and the emergence of epidemics, some brands have gradually withdrawn from the market. Even the more popular brands cut their product price greatly to clear the stock.
Own factory brand opportunities remain
While policies and epidemic conditions have affected brand owners, they have also affected e-cigarette production plants. In the second half of 2019, some factories have already withdrawn from the field of electronic cigarette production. Some surviving factories that were originally just foundries started to promote their brands.
The author once said in the “New Retail 3.0 Era” that the three core values of vending machines: experience, product promotion and traffic. From this point of view, at present, it is the most suitable time for the self-owned factory brand to sell electronic cigarettes.
The prospect of e-cigarettes is remarkable.
1. Product awareness has been greatly improved
After the hot market and policy turmoil in 2019, the public’s awareness of e-cigarettes has greatly improved.
I once said in “Analyzing the Vending Industry with a Mask Vending Machine”: whether a product is suitable for vending needs to be analyzed from six dimensions, one of which is awareness.
The higher the user’s awareness, the greater the sales rate; vice versa. Therefore, compared with 2019, the e-cigarette vending machine sales will increase.
2. Commodity gross profit increases instead of decreasing
The market price of a disposable vape is between 39 yuan and 59 yuan, and there is already a cognitive set in the minds of consumers. Therefore, the retail price of disposable vapes will not change much.
However, as the heat decreases, the foundry cost of e-cigarettes has dropped by at least 30% compared to 2019. This will allow more gross margin for vending machine sales.
3. Quality + Marketing Achieves Brand
Many so-called e-cigarette brands in 2019 are just one name. In addition to design flaws, battery problems and e-liquid problems can be seen everywhere.
Quality is the foundation of a brand. High quality + good marketing can make a brand. The result of focusing on marketing but not quality is a flash in the pan! Only e-cigarette brands that can withstand quality can survive in the end.
For the electronic cigarette industry, the only uncertainty is to C end.
Based on my own understanding of the “steady development, orderly and open” ideology and judgment of social development trends, the author take a rough estimaste of the control measures for the electronic cigarette industry:
The second measure after the online ban should be quality control. Those that do not meet the quality standards will be expelled from the market. The e-liquid is the key to the quality of e-cigarettes, so the second step should be production standards and e-liquid control.
If the scale of the e-cigarette market continues to grow explosively, there will be a third step, which is the offline channel control. However, in view of the effects of the first measure and the impact of the epidemic in 2019, the second measure will be delayed. This leaves a certain gap for the orderly development of the market.
For some companies, one of the positive effects of the epidemic is that you are on the same starting line with the person who was faster than you.
So during the COVID 19 coronavirus epidemic, we can’t just stare at the masks and temperature guns, but take the opportunity to quickly catch up with our competitors.