China

Will electronic cigarettes be popular on a large scale?

First of all, let’s take a look at Japan and South Korea. At present, the penetration rate of e-cigarettes in Japan (mainly referring to heat not burn) has exceeded 30%. If we go to public research in Tokyo now, it is estimated that more than 50% of the data obtained on the streets may be possible. In Korea, the penetration rate is over 10%. In just three years since its landing in Japan in 2015, the penetration rate of heat not burn has soared directly to 30%. In addition to the situation in the United States, the current penetration rate of e-cigarette in the United States is 13%, but there is no heat not burn products in it.

Some people are still questioning the harm that heat not burn to smokers, so they need FDA certification, but this is a question of time (why, maybe PMI, a company with more money and power, is also related to the fact that the harm of e-cigarettes is less than that of traditional tobacco?).

How to view the emergence of electronic cigarette, especially the heat not burn products? I will use a deeper dimension to think that the origin of tobacco has been for thousands of years, and Chinese people have a history of smoking for hundreds of years. We all know that this thing is a double-edged sword, good and bad, but it still can’t stop. Now a new way of smoking can give people the same feeling, and e-cigarette has reduced the harm by more than 95% compared to conventional cigarettes, click here to view the source from Science magazine. Why don’t I smoke e-cigarettes? From this point of view, e-cigarette is the change of human consumption habits for hundreds of years. (many people question that e-cigarettes can’t satisfy 100% taste of flue-cured tobacco at present, and can’t prove harmlessness at the same time. Here’s my understanding: if we can’t make 100% real tobacco taste, then how long have e-cigarettes came out now? Just like cell phones 10 years ago, technological progress will take time. As for the harm, people have proved that the biggest harmful substance in flue-cured tobacco is tar, so does the removal of this thing reduce the harm.

Say China again: because of China’s special national conditions, the profit and tax of e-cigarettes is 1.1 trillion a year, nearly 8% compared with the total tax of 13.8 trillion. This is not just the tobacco industry chain or tens of thousands of farmers upstream. In essence, the tobacco tax is just a medium of transfer payment. Since more than 1 trillion yuan of tax revenue has to be spent on education, infrastructure, people’s livelihood and other fields, in fact, those 350 million tobacco brothers and sisters have created 16.5 million jobs for China with their own consumption on average (here is the assumption that tax = investment = employment * GDP per capita), So the tobacco industry has a huge impact on China.

Will China’s electronic cigarette be released? Yes! Definitely! The general trend is unstoppable. At present, 19 domestic tobacco companies are stepping up their research on electronic cigarette products, but the current products, especially the heat not burn products, are sold overseas. Why not sell it at home? Because the policy has not been liberalized, why the policy has not been liberalized, for fear of affecting profits and taxes, and because China’s e-cigarettes started late, there is no way to compete with foreign giants. In the future, the electronic cigarette, especially the heat not burn type, must be made by China Tobacco. This is the fundamental interest and cannot be released. But devices and appliances should be liberalized, although there are no clear policies and regulations. To sum up: e-cigarettes will be popular on a large scale.

If you see it as a fundamental consumption change in the world’s smoking history, you won’t doubt it. As for when it will be popular, it depends on when the policy will be loosened. Will the tax be reduced? Don’t worry about it at all. Referring to the practice of Japan and South Korea, we started to release e-cigarettes. Three years later, we found that the penetration rate of e-cigarettes was too fast and the collection of taxes was too small, which led to the decrease of the total tobacco profits and taxes. However, in 2018, Japan revised the tax law and increased the tax rate. Overall speaking, one general principle should be stick to, that is, ensure that the total profits and taxes remain unchanged.

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