E-cigarette stores will exist in the form of collection stores

The "E-cigarette Management Measures" will be officially implemented on May 1! At that time, flavored e-cigarettes other than tobacco flavor will be banned, and at the same time, e-cigarette retailing will need to apply for a tobacco monopoly license and will not be exclusive. The reporter learned that in the countdown to the new regulations, some consumers are frantically hoarding goods, and some are considering quitting e-cigarettes from now on; some retail store owners have been selling out goods, and some are still waiting and seeing; as for manufacturers, some have begun to develop tobacco-flavored electronic cigarettes...

At present, there are more than 1,500 domestic e-cigarette manufacturing and brand enterprises in mainland China, 190,000 e-cigarette retail outlets, and 5.5 million people employed, how to ensure the smooth transition between these enterprises and employees? Some experts believe that this requires the joint efforts of the government, industry and enterprises.

Consumer choices

Some are crazy hoarding, some are called or quit smoking

On March 11, the State Tobacco Monopoly Administration issued the Administrative Measures for Electronic Cigarettes, which clearly pointed out that from May 1, the sale of flavored e-cigarettes other than tobacco flavors and e-cigarettes that can be added to the atomization by themselves is prohibited. At present, the main tastes of e-cigarettes on the market are divided into seven categories: fruits, tobacco, mint, tea, floral, dessert and wine. The most popular among young people is the fruit flavor, while the tobacco flavor accounts for only a very small share.

The survey found that young male office workers, young female consumers, and adult students are the "three main forces" of e-cigarette consumer groups. If only the smell of tobacco remains, will these young consumers still choose e-cigarettes? The reporter randomly interviewed a number of consumers, most of whom said that they could not accept tobacco-flavored e-cigarettes, and a female consumer who was accustomed to fruit-flavored e-cigarettes said that she might later change to smoking fruit-flavored cigarettes, or simply quit smoking.

Because after May Day will no longer be allowed to sell e-cigarettes other than tobacco flavor, for this reason, many consumers began to hoard goods, and some even bought one or two hundred boxes of cigarette bombs at one time, which also led to the price of fruit-flavored e-cigarettes on the market. The reporter visited a number of authorized stores in Guangzhou and found that some stores will usually sell 99 yuan a box of cigarette bombs, the price increased to 120 yuan a box.

The choice of retail stores

Some clear goods close, and some wait and see the market

On the one hand, e-cigarette smokers are crazy about fruit-flavored cigarette bombs, and on the other hand, tobacco-flavored e-cigarettes are not popular. A shopkeeper said, "I can't sell a box of tobacco-flavored e-cigarettes for two weeks." It is understood that among the e-cigarette brands on the market, non-tobacco flavor accounts for more than 80%, "if you can only sell tobacco-flavored e-cigarettes in the future, you may have to close the door," the owner said.

At present, some stores are still waiting, and some stores have closed their stores and got off. A partner of a Yueke authorized store in Guangzhou told reporters that since the introduction of the "E-cigarette Management Measures (Draft for Comments)" last year, there have been peers "leaving", and many peers who have not closed stores are also clearing goods at high prices, planning to finally "fish" and then retreat. He said that he is also on the sidelines, if the implementation of the new regulations after the tobacco flavor of electronic cigarettes and market, may continue to do, if it is really not possible can only change careers.

In March 2021, the Ministry of Industry and Information Technology issued a message saying that "e-cigarettes intend to implement supervision with reference to cigarettes", and the reporter visited a number of e-cigarette stores in Guangzhou, and many shop owners said that the business was not affected. Now, after a year, the reporter visited again and found that many stores have been closed. For example, the decoration of a Leimi e-cigarette store in Tianhenan has been dismantled, and the words "Wangpu Rent" are posted on the door.

From next month, retail stores are not allowed to operate e-cigarettes exclusively

According to the "2021 Blue Book of E-cigarette Retail Formats" jointly produced by the E-cigarette Industry Committee of the China Electronics Chamber of Commerce and the two supremes, before November 2019, e-cigarettes were not banned from being sold online, and e-cigarette retailing was mainly carried out through online e-commerce platforms such as Tmall and JD.com.

In November 2019, after the implementation of the ban on online sales of e-cigarettes, retail stores grew rapidly, and it took less than two years to complete the construction of offline channel networks, all over cities. There are nearly 190,000 domestic e-cigarette retail formats, including 138,000 authorized stores, 47,000 specialty stores, and 5,000-7,000 collection stores. There are more than 5,000 stores in Guangdong.

The "E-cigarette Management Measures" to be implemented on May 1 stipulate that retail stores must not exclusively operate e-cigarette products for sale on the market. Lin Hanzhong, deputy secretary-general of the China Electronic Chamber of Commerce, said that this means that e-cigarette stores will exist in the form of collection stores in the future. "The collection of multi-party brand sales can prevent the market from forming an oligopoly and play a protective role for other enterprises, which is actually a double-edged sword."

Soochow Securities Research Report said that e-cigarette stores need to meet the traditional cigarette location restrictions (such as shopping malls, school periphery, etc.) and distance restrictions, and it is expected that a large number of stores will face closure or re-location selection. The existing channel layout of the head brand may be affected, but it is expected to cover more traditional tobacco retail channels with the advantages of the number of user groups and brand advantages.

So, where should these hundreds of thousands of e-cigarette retail stores in the country go? In this regard, Lin Hanzhong suggested that e-cigarette companies can turn agents into service providers, so that service providers can assist enterprises in brand maintenance, logistics distribution, after-sales operations and other work of channel stores, in addition to cultivating scattered sales outlets and maintaining good cooperative relations with these outlets. After the introduction of the new regulations, the original dealers need to find their own positioning and entry points to adapt to changes in the market.

The choice of the enterprise

It is difficult for the e-cigarette industry chain to achieve a smooth transition

The "2021 E-cigarette Industry Blue Book" discloses that there are currently more than 1,500 domestic e-cigarette manufacturing and brand enterprises, nearly 100,000 e-cigarette supply chain and peripheral service enterprises, and about 5.5 million people directly and indirectly driven to employment. The "E-cigarette Management Measures" was released from March 11 to May 1 officially implemented, this short 50 days, in the case of supporting rules have not yet been introduced, many people in the industry believe that it is difficult to achieve a switch upgrade and a smooth transition of the e-cigarette industry chain, and call for an extension of the transition period.

"Ensuring a smooth transition for small and medium-sized enterprises requires the joint efforts of the government, the industry and enterprises." Xu Xiaoxin, associate professor of the School of Social Development and Public Policy of Beijing Normal University, said that for the regulatory authorities, it is necessary to further clarify the conditions and procedures for various types of license applications, and simplify them as much as possible to reduce the work burden of small and medium-sized enterprises; for the industry, industry organizations should strengthen communication with regulatory departments on behalf of the industry and strive for a certain flexible space for the development of the industry; for e-cigarette companies, the biggest challenge and first priority in the short term is to obtain corresponding licenses and obtain legal identity; on this basis, Seek future development.

Xu Xiaoxin also said that considering the chain from production to retail, the regulatory authorities may consider appropriately extending the transition time of non-tobacco flavored e-cigarette products in the retail link.

Consider transformation and upgrading, and adjust the layout of overseas markets

Lin Hanzhong suggested that enterprises in the e-cigarette industry chain should readjust the existing technical standards, production structure and channel structure as soon as possible, and at the same time, wait for the introduction of detailed rules and consider the direction of transformation and upgrading. On the other hand, it is also necessary to adjust the layout of overseas markets. The introduction of the new regulations is strictly conducive to exports, but also conducive to the output of domestic technology and standards, "the real battlefield of e-cigarettes in the future is international."

It is understood that e-cigarette companies such as Yuzu, Bolan, Mixuan, and Weita have announced that they will stop producing flavored smoke bombs, and Yueke official announcement said, "The new taste is already on the smooth road." ”

The future development space of the e-cigarette industry, Xu Xiaoxin believes that it comes from three aspects, one is the domestic large-scale e-cigarette market, the second is the international market, and the third is the large atomization industry that is more closely integrated with health. At present, based on the consideration of eliminating the ambiguous zone of supervision, the "Management Measures" weakens the expression of whether it contains nicotine, and includes a wider range of atomized products into the scope of supervision of the Management Measures. Xu Xiaoxin suggested that as e-cigarette regulation gradually moves on the right track, should the government consider clearly stripping nicotine-free atomization products from e-cigarettes to promote the development of the large atomization industry to promote health and Chinese herbal applications?

Timeline

Before November 2019

E-cigarettes are not banned from being sold online, and retail is mainly carried out through online e-commerce platforms such as Tmall and JD.com.

After November 2019

The ban on online sales of e-cigarettes was implemented, and retail stores grew rapidly.

March 2021

The Ministry of Industry and Information Technology issued a message saying that "e-cigarettes intend to implement supervision with reference to cigarettes".

From 1 May 2022

The "Administrative Measures for Electronic Cigarettes" is implemented, and retail stores must not exclusively operate e-cigarette products for sale on the market.

Written by: Nandu Aoyi news reporter Lu Ruoqing Feng Xiaohui