Who Is Leaving in May Of E-cigarette?

From May 1, 2022, the measures for the administration of e-cigarettes (hereinafter referred to as the "measures") issued by the State Tobacco Monopoly Administration officially came into force, marking that the supervision of China's e-cigarette industry has been tightened again and the industry has further developed towards standardization.

Of course, this also indicates that China's e-cigarette market pattern, including consumer groups, manufacturers, retail outlets and publicity methods, will change greatly.

For head brands, due to the impact of taste restrictions, there may be a temporary decline in sales, but the market share will continue to focus on the head; The top ten middle waist brands still have the opportunity to survive and even expand their share; As for the tail brand without characteristics and technology, it may either die or hide in the dark.

How many e-cigarette brands are there in China? I'm afraid it's difficult for anyone to answer this question accurately. Not to mention China's "fog Valley", hundreds of workshops in Shajing, Fuyong and Songgang in Shenzhen have produced more than 90% of e-cigarettes in the world. Just look at the "brand library" of new consumption in Landong, which has long focused on the e-cigarette industry, which includes 121 brands.

However, most of these 121 brands may face the fate of being eliminated.

First, according to the disclosure of fog core technology, the decline in revenue is mainly due to the impact of the epidemic on the production and transportation of its Shenzhen factory. This means that more than 90% of the production and transportation of e-cigarettes in the world may be affected. Big brands still have enough cash reserves to withstand the impact. For example, there are 4.38 billion yuan of cash and cash equivalents in the fog core technology account, which is basically not panic; Many small brands may break their cash flow and go bankrupt completely in this round of impact.

Secondly, the implementation of the measures means that electronic cigarettes and aerosols are included in the scope of supervision, and the state tobacco monopoly administration is in charge of the national supervision and administration. After that, enterprises engaged in production and business activities should apply for corresponding certificates and obtain corresponding administrative licenses. If you want to engage in the production and operation of e-cigarettes, I'm afraid it's not much easier than traditional cigarettes.

What impact does this have on the brand pattern of e-cigarettes? Historical experience has proved that the more requirements and stricter supervision are, the more conducive it is for the industry to concentrate on the head.

Vitavp is the founder of weita technology Liu Dongyuan, vice president of the electronic cigarette Committee of China Electronic Chamber of Commerce, commented: "In recent years, China's tobacco has been implementing three major strategies, namely, big market, big enterprise and big brand. Local monopoly bureaus are also implementing brand focus. I think the change of policy will form their own local advantageous brands in different provinces, which is more conducive to the head. This is also in line with the policy requirements of adjusting and optimizing the industrial structure and strictly controlling the new production capacity of e-cigarettes."

First, under the new regulatory policy, e-cigarette retailers are not allowed to set up brand stores, can only open collection stores, and exclusive operation is prohibited. In this way, small brands that have not been able to open offline stores before also have the opportunity to settle offline. From this perspective, is it conducive to the development of small brands?

Star, who once worked in a head electronic cigarette company, believes that small brands with strong product power and special functions may get opportunities. Liu Dongyuan still insists that the brand must be centralized. Maybe only the top ten brands still have the opportunity to develop.

"The whole tobacco is a white list system. The result may be that the state gives the white list to the tobacco (bureau) of all provinces, and all provinces choose n brands from the big white list to be shortlisted in all provinces." Xingxing explained the collection store mechanism in the future.

When all products are sold together, what affects consumers' choice is nothing more than brand awareness, price and product use feeling. In terms of brand awareness, naturally, the head brand still has an absolute advantage. In terms of price, Xingxing believes that the price reduction in order to seize market share will not occur in the short term.

Xiwu also believes that the white list system is generally good for the head: "in terms of brand selection, I believe that technical strength, product layout and past performance are very important, and head products have a deeper accumulation in these aspects."

In addition, whether small brands can get the corresponding qualifications is still unknown. Chen Zhong, editor in chief of Landong new consumption, said: "after the e-cigarette management measures and the national standard of e-cigarette come into force, it is difficult for small and medium-sized enterprises to meet the requirements of the national standard, or now limited by the number of e-cigarette production licenses, many small and medium-sized brands below the waist can not get the production license, because the production license has some conditions, such as capital, various resource advantages and so on, and the requirements are relatively high."

Another important factor beneficial to the head is the current technical level, which largely determines the use feeling of the product.

Liu Dongyuan said: "the head brand has gone deeper in technology. Due to the investment of tens of millions or even hundreds of millions of R & D funds every year, some head brands have also produced better patent output and economic benefit transformation of technology. At present, each company has produced certain differentiation barriers, and the main competition barriers in the future need more R & D investment and professional training."

The company, which is the first company specialized in the research and development of electronic products of guwu tobacco in Guangdong Province, has been incorporated into the new field of electronic products of guwu tobacco under the exclusive research and development plan of guwu Technology Department of Guangdong Province. "In the future, the channels will be unified. We believe that excellent exclusive technology is the strongest competitiveness." I like fog.

No matter the current technical barriers or the capital reserve for continuous investment in R & D and talent training in the future, big brands also have advantages. From this point of view, the head effect of e-cigarette industry will become more and more obvious, further crowding out small brands.

If, as predicted by Liu Dongyuan, only the top ten brands are competitive, many middle and tail brands may have reached the end.

If the head brand eats meat, the waist brand grabs soup, and the tail brand can only wait to die? Are there any new opportunities?

Star believes that for small brands, there are probably only two opportunities. The first is to prove that there is no problem with their products and find ways to be shortlisted in the domestic market; The second opportunity is to turn around and attack the sea.

"The overseas market is too big. If there are channels to go to sea, it is much better than at home." Xingxing said, "some major domestic brands are also going to the sea, but the products going to the sea are essentially different from local products, such as overseas popular cotton cores and disposable (more than 2000) electronic cigarettes. In China, ceramic cores are mainly used to change bullets."

Liu Dongyuan also believes that at present, the overseas market is still more suitable for OEM, "but with the support of national policies for e-cigarette brands to go to sea, there will be the rise of Chinese e-cigarette brand enterprises in overseas local markets in the next few years".

Compared with professionals, Komatsu, who once sold e-cigarettes part-time in his circle of friends, told Lu Jiu finance and economics that there was no need to worry about their survival.

"What you haven't heard of is not necessarily small brands. The sales channels can be micro businesses, and some entity sales also exist. Even if the supervision becomes stricter, such as traditional cigarettes, you see, there are people tossing about electronic cigarettes and traditional cigarettes, not like you see (dead)." Komatsu said.

Komatsu also said that there is no need to store cigarette bombs: "there are a lot of electronic cigarette shanzhais now, and miscellaneous brands will not die. For example, imitation Apple headphones still live well because they are cheap."

Liuxin finance and economics has not verified that any of its online sales of "Jiuyan" has passed the wechat e-commerce in 2019, but it has not yet passed the wechat e-commerce in 2021.

In May 2022, at the time of writing this article, Lu Jiu finance and economics again placed an order to buy cigarette bombs through the entity merchant added before. Because the merchant is out of town and needs to be mailed, the merchant also did not verify whether the recipient is an adult before sending it.

It can be seen that there are still many "hidden corners" in the e-cigarette industry. Will small brands that do not have technology, fame and channels to do overseas business but still want to survive retreat to these dark areas? Lu Jiu finance and economics believes that this situation is inevitable.

Supervision cannot be achieved in one step, and not all businesses can consciously abide by the rules and regulations. But now the whole direction is legalization and standardization, and there will be fewer and fewer hidden corners until they disappear.