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Vape brands are racing offline in China

Recently, RELX vape announced the official opening of the world’s first flagship store in Shanghai, and plans to open 10000 RELX stores in the future. In addition to RELX, electronic cigarette brands such as MOTI, SNOWPLUS, FLOW have also opened offline stores. China has recently issued a notice that it is not allowed to sell e-cigarettes through the Internet so vape brands goes to offline sales channels actively. At present, many mainstream e-commerce platforms have blocked the keywords of “e-cigarettes”. In the future, offline stores will become the main “battlefield” of e-cigarettes competition, but it also means that a large amount of money needs to be invested. With the stricter supervision, the e-cigarettes industry will usher in a new turning point of development.

Offline shop competition

RELX is actually just a miniature of the vape industry. Electronic cigarette brands such as Kmose, MOTI, FLOW and YOOZ have also opened stores offline. On April 14, 2019, SNOWPLUS opened its first franchise store in Anhui. At present, SNOWPUS has opened hundreds of Direct stores and franchise stores in six regions and more than 140 cities.

Vazo, an electronic cigarette brand owned by Treasure of America, also opened its flagship store in Wanda Plaza, Wujiaochang, Shanghai in October 2019. Shi runwei, director of Vazo brand, told that the layout of Vazo online and offline is divided into Zippo’s own channel and new channel, which are different from other new brands in China.

Up to now, more than 400 Zippo owned channels have been laid, and it is expected that by the end of this year, Vazo products will be available in more than 2000 Zippo owned outlets. The newly established channel is in the charge of Weizu technology, with the direct stores and franchised stores as the main channel, the stores in the stores and the automatic vending machine as the auxiliary. This year, Vazo will continue to open direct stores in Beijing, Guangzhou and Shenzhen.

Industry insiders said that e-cigarette brands have opened offline stores, which is a process of exploration. Some brands have opened flagship stores, while others choose to open in shopping malls, street shops, cinemas, digital stores, nightclubs, net bars and other places. Among them, the big brands start with fastest pace and are most developed because of their abundant funds.

Go offline smoothly

In the e-cigarette industry, not all brands initially “bet” online. Take Vazo as an example. After Zippo’s Vazo went public in China in June 2019, most of its funds have been invested in offline store operation support, including design support, decoration support, personnel training, goods support and subsidies.

As for the reasons why Vazo chose to open offline stores, Shi runwei said that as a new type of consumer product, e-cigarette has attracted widespread attention from the society, mainly based on two points: first, whether its products are safe and reliable; second, whether it is compliant in the sales process. From the existing mature verification methods, offline stores can more effectively avoid minors’ attempts and purchases. “At the stage of project research, Vazo has established a long-term strategy of taking offline as the main market, and also proposed a marketing model suitable for the Chinese market. The operation and management of offline channels have always been the strong point of Zippo brand’s long-term cultivation. ”

In this regard, some business analysts said that Vazo’s efforts to develop offline channels ahead of time undoubtedly took the lead in the era of stricter regulation. However, in the face of the industry’s collective turning offline, the competition Vazo faced is also more fierce, and the test of capital investment is also increasing day by day.

Development meets inflection point

Industry insiders believe that after the introduction of national policies, the electronic cigarette savage growth of the pause key was pressed. At the same time, compared with the “frenzy situation” in the first three quarters of 2019, e-cigarettes began to “calm down” in the capital market.

According to the public information, few e-cigarette brand financing can be found since the beginning of November 2019. In the first three quarters of 2019, 35 domestic e-cigarette brands obtained financing, with a total financing amount of more than 1 billion yuan.

According to Ao Weinuo, Secretary General of the electronic cigarette industry committee of China Electronic Chamber of Commerce, the introduction of the policy has a great impact on online e-cigarette enterprises, and the reduction of financing is a normal phenomenon. The future financing situation depends on the follow-up development of e-cigarette industry and the introduction of policies and regulations.

In fact, as the birthplace of e-cigarettes, China is the largest producer and exporter of e-cigarettes in the world. According to the statistics of electronic cigarette industry association of China Electronic Chamber of Commerce, at present, the output of private enterprises of electronic cigarette in China accounts for about 95% of the global total output, and the export volume accounts for about 90% of the world. From 2016 to 2018, the total sales volume of China’s private e-cigarette enterprises was 65.14 billion yuan, including 33.75 billion yuan in 2018; from 2016 to 2018, the total export volume of e-cigarettes was 52.09 billion yuan, including 28.69 billion yuan in 2018.

“Although the e-cigarette market is huge, but the national standard has not yet been issued, at this time, some e-cigarette brands are taking too radical store expansion, and will face many challenges in the future.” Industry insiders pointed out.

Mr. Shi said Vazo will continue to invest in R & D at the product end and introduce more advanced processing technology to complete manufacturing upgrading. At the marketing end, they will consolidate their own sales channels, open up more new channels, participate in multiple chain exhibitions, and expand new channels and cooperation.

“We will strengthen our ability to ensure the operation and management of franchise stores, strictly abide by national regulatory policies, and strictly prohibit the sale of products to minors. Therefore, it will be an important work to strictly review the franchise stores. We do not want to join the craziness of blindly opening stores. At present, there are more than 100 stores waiting for review. It is conservatively estimated that 500 new outlets will be joined this year. ” Shi runwei said.

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The author who has 5 years of experience writing on vapes, stays in Shenzhen and follows the origin of vapes closely. He distributes the earliest vape news & reviews from most authoritative vape insiders. DISCLAIMER

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