Does e-cigarette industry still have opportunities in China?

Many people think that China special market inspection actions in July 2020 is another “disaster” in the industry’s cold winter, but the author believes that this is another step towards compliance in the China e-cigarette industry. The e-cigarette manufacturers who have been deeply involved in the industry have been making great efforts in social responsibility and preventing minors from vaping or smoking. On July 21, Shenzhen issued the industry’s first ticket to offline e-cigarette stores, announcing that the industry has officially entered the era of strong regulation.

The sales training of offline stores and the supply safety management of distributors have become standardized. Today, when electronic cigarette regualtion is not perfect, manufacturers and store owners still need to stick to their moral bottom line. Some manufacturers have added child lock, inhalation warning, adult user authentication and other functions to their products to help consumers and businesses more effectively to prevent the sale of e-cigarettes to minors, in case of the inadequate regualtion of minors causing minors to vape or smoke. Some brands/merchants who violate the regulations cannot obliterate the efforts of those who are socially responsible in the industry.

In the context of formalization, this industry still has unlimited potential. E-cigarette manufacturer Smoore International was listed on the Hong Kong Stock Exchange on July 10, with an issue price of HK$12.4 billion and a fund-raising of HK$6.86 billion. It has also officially become the first stock of electronic cigarettes in China. Take the brand RELX as an example. In 2019, it has opened more than 3,000 franchised stores nationwide. Through joint survey and supervision with the market department, it strictly abides by relevant laws and regulations.

E-cigarettes were once considered to be one of the most promising emerging industries in the venture capital field in recent years. More and more smokers have begun to replace traditional paper cigarettes with new tobaccos, which has also enabled some new brands in the market that have only been undertaking two or three years to develop rapidly. . How to scientifically and reasonably regulate e-cigarettes is a problem that the industry and regulatory authorities urgently want to solve, rather than completely eliminate it.

The innovation and evolution of the industry are still continuing. Judging from the current market and policy progress, the e-cigarette industry will continue to develop towards formalization in the next six months. There are still opportunities in this industry.