Controversial e-cigarettes are in trouble again - this time, regulation is aimed at the protection of minors.
On the afternoon of November 1, the State Administration of market supervision and the State Tobacco Monopoly Bureau jointly issued a document saying that in order to prevent minors from buying and smoking electronic cigarettes through the Internet, all kinds of market subjects are not allowed to sell electronic cigarettes to minors, urging e-commerce platforms to immediately close e-cigarette stores and remove electronic cigarette products from the shelves in a timely manner.
The policy is to close the online sales channels of e-cigarettes. China has a huge number of e-cigarette factories, and the industrys outlet at the consumer end has just begun to blow this year.
This ban, let the development of electronic cigarette industry once again to the crossroads.
E-cigarette dealers under supervision
In Shenzhen, a number of generation factories have not recovered from the impact of US policy, and now they have to deal with new changes.
Since this year, the control of e-cigarettes in the United States has gradually stepped up. On October 28, Juul labs, the largest maker of e-cigarettes in the United States, said it would cut jobs in response to a possible ban on e-cigarettes.
For six years, Li Ming (pseudonym) has run an e-cigarette factory with a scale of about 50 people, with its own brand, but mainly engaged in e-cigarette export business.
This year, they just developed a new product, but the market will not work.. At present, the sales volume of electronic cigarettes in the factory is about a quarter of the normal situation in the past. Since last month, the company has begun to lay off workers.
Another e-cigarette practitioner in charge of export business said that the first two months were still in a rush state, but since last month, the production volume has kept up, and customers have cancelled orders in large quantities. As a result, no one paid for the suppliers materials after they were delivered and processed. Its very difficult for customers now, she said. They are cutting prices everywhere.
American policies have cast a shadow on the development of the industry, and the implementation of domestic policies has only worsened. Most practitioners have made the worst plan a month ago. Psychologically speaking, the bad news is gradually coming, which is relatively acceptable. Li Ming told the interface news reporter.
The announcement calls for the closure of e-commerce platform stores of e-cigarettes, without restrictions on offline channels. Online e-cigarettes are mainly sold on the official website of brand merchants, self-employed stores, agency stores and major e-commerce platforms, while offline e-cigarettes are mainly sold in experience stores, retail stores and entertainment places. However, e-cigarettes are temporarily classified as 3C products. It is not necessary to obtain the relevant policy approval of tobacco sales to sell e-cigarettes through offline channels.
For dealers of different channels, a few happy and a few sad.
Dealers who specialize in acting as cigarette products agents in Beijing told interface news that the docking warehouse has been out of production for four days and is now unable to receive orders. In addition, a Ono e-cigarette dealer said that in recent days, the price of e-cigarettes has indeed been reduced a lot, with a reduction rate of about 30%.
There are also practitioners who have expressed support for the policy of closing online e-cigarette stores and said they will not be affected.
I think this policy is very good, an ice e-cigarette dealer told interface news According to her, their products are delivered directly by the company, and currently they are mainly cooperative stores and offline experience stores. At present, the brand is not sold on any e-commerce platform, so this policy only helps them operate more standardized, and will not have any impact on product sales.
The interface reporter learned that ice is a sub brand controlled by Shenzhen Bolton group. On October 10 this year, China cigarette network reported that Chinas first e-cigarette Industrial Park was located in Bolton science and technology park.
At the same time, the dealer said, in the end, we are going back to the offline market, and what we put together is the products and technologies.
Twists and turns under the wind
In fact, Chinas e-cigarette industry has been developing for more than 15 years, but it has really come to the publics attention because of the financing of a large number of emerging e-cigarette companies in the past two years.
Han Li, a Chinese pharmacist, invented the first real electronic cigarette in 2003 and obtained a patent. Later, because of a series of negative effects, its company smoke like began to decline after 2008. But other e-cigarette factories have found opportunities. In 2014, Chinas e-cigarette manufacturing industry peaked, with more than 2000 e-cigarette factories.
On the one hand, capital brings spring to e-cigarettes. Since the second half of 2018, many investors have begun to layout in the e-cigarette circuit, including source capital, IDG, Sequoia, etc.
On the other hand, under the tuyere, the regulation is also tightening, which is also the biggest challenge faced by the electronic cigarette industry.
At the 315 party in 2019, CCTV named the electronic cigarette industry and reported that some of the nicotine content labels of electronic cigarette liquid were not standardized. From October 1, the latest smoke control order implemented in Shenzhen clearly included electronic smoke into the scope of smoke control.
At the same time, Juul, the giant, has been frustrated frequently on its way into the Chinese market. According to 36 krypton, Juul started to study the Chinese market as early as 2016. It is reported that Juul has been planning to enter China since the beginning of 2019. But with the supervision of the market, Juul e-cigarette disappeared a few days after it was put on the Chinese e-commerce platform.
Up to the time of publication, the interface journalists searched for the key words e-cigarettes on Taobao, Jingdong, pinduoduo, Suning and other platforms, and could still find the purchase links of different brands. Search in Suning e-commerce app shows that relevant products cant be found, and the products in the flagship store of the brand are also removed from the shelves.
Zhu Xiaomu, founder of Fluw e-cigarette, Wang SA, founder of Xiwu e-cigarette, founder of Xuejia e-cigarette, and relx Yueke all agreed that they would protect minors from the infringement of e-cigarette, not hype marketing in the future, and strengthen research and development.
In fact, in recent years, there has been a wave of smoking ban around the world. More attention has been paid to the control of e-cigarettes at home and abroad. The degree of control varies from country to country. Even in some countries, e-cigarettes have gained more support.
The United States, which has the largest e-cigarette market in the world, has accelerated the pace of e-cigarette control in the past year. Up to now, the penetration rate of e-cigarette market in the United States is 13%, accounting for 43% of the global e-cigarette sales, which is the largest e-cigarette market in the world. ?
Public health is a key issue for e-cigarette companies to be questioned. According to foreign media reports, on September 24 this year, U.S. federal prosecutors have launched a criminal investigation into Juul, the U.S. electronic cigarette giant, in California. It has faced a series of legal challenges in recent months due to the use of e-cigarettes related diseases.
According to a report released this year by the Centers for Disease Control and Prevention (CDC), 3.7% of people in the United States currently use electronic cigarette products for a long time, with more than 9 million people.
In mid September, Wal Mart, the largest retailer in the United States, announced that it would stop selling e-cigarettes. Meanwhile, CBS, Viacom and CNNs parent company, Warner media, announced that they would no longer broadcast e-cigarette ads.
The U.S. Food and Drug Administration (FDA) also announced on September 11 that the trump administration is planning to ban the sale of unauthorized non tobacco flavored electronic cigarettes in the United States.
In India, the government issued a comprehensive ban on e-cigarettes. On September 19, Indias finance minister said he would ban the production, manufacturing, import and export, transportation, sales, storage and advertising of e-cigarettes in India, New Delhi television reported.
There are also countries that support e-cigarettes - the UK. Both NHS and the Department of public health support the use of e-cigarettes rather than traditional cigarettes, and encourage users of e-cigarettes to report any adverse reactions at any time.
In 2018, the Department of public health proposed that hospitals sell e-cigarettes and provide e-cigarette lounges for patients. At that time, British Prime Minister Cameron had publicly expressed his support for the development of e-cigarettes in the UK.
At the same time, due to the OEM status of Chinas e-cigarette enterprises, domestic and foreign supervision will have more or less impact on e-cigarette enterprises. Chinas e-cigarette manufacturers are mainly based on the mode of purchase + production. According to the Northeast Securities report, the proportion of American e-cigarettes manufactured by Chinese contractors is as high as 80% - 90%.
Foreign supervision has brought a lot of blow to e-cigarette factories, and domestic policies have damaged their confidence. Its expected that this policy will be introduced, but its not expected that it will be so fierce, said a practitioner of finished e-cigarettes
Now, Chinas e-cigarette industry has formed a chain including raw material suppliers, representative factories and brand distributors. Raw materials include chips, cigarette oil, atomizers, etc.; midstream enterprises, that is, manufacturing on behalf of factories, mostly in the mode of OEM or ODM. Their products are not only delivered to foreign countries, but also to more domestic brands for online and offline sales.
In their view, if regulatory changes and sales markets are affected, hardware, injection molding, packaging, solution companies and electronic cigarette factories will be affected. However, for the factory, what we can do is to strengthen quality control and seek new development direction.
As soon as Li Ming graduated, he came into contact with the electronic cigarette industry. Now he has his own company, which has been eight years. For policy changes, he said, we are preparing to find new opportunities for development, and then waiting for the possibility of recovery in the industry. After all, the policy is to prohibit the sale of e-cigarettes to minors, rather than the production and sale of e-cigarettes..
Source: editor in charge of interface news: Yang bin_nf4368