The changing situation of electronic cigarettes: will it still be favored without the fruit flavor?

Welcome to the WeChat subscription number of “Sina Technology”: techsina

Text / Sissi

Source/DoNews (ID: ilovedonews)

Fruit-flavored electronic cigarettes officially “turned over” and became history.

On September 29, the State Tobacco Monopoly Administration issued the “Notice of the State Tobacco Monopoly Administration on Matters Related to Strengthening the Supervision of Electronic Cigarettes” (hereinafter referred to as the “Notice”). Market entities producing and operating e-cigarettes shall obtain a tobacco monopoly license.

No individual, legal person or other organization may sell electronic cigarette products, vaping products and nicotine for electronic cigarettes through information networks other than the electronic cigarette transaction management platform stipulated in the “Measures for the Administration of Electronic Cigarettes”.

In addition, the mandatory national standard for “electronic cigarettes” (hereinafter referred to as the “standard”) will be implemented on October 1, and the “standard” stipulates the concentration of nicotine in electronic cigarettes and the total amount of nicotine. Limit the amount of impurities and pollutants in the atomized material, such as heavy metals and arsenic, and clarify the additives and the maximum amount of additives allowed in the atomized material. At that time, only national standard tobacco-flavored electronic cigarettes will be allowed, and fruit-flavored electronic cigarettes will be completely removed from the shelves.

In other words, the e-cigarette industry will completely bid farewell to barbaric growth, nicotine content, flavors, fragrances, and channel restrictions will have “laws to follow”, and e-cigarette companies will also usher in the transition from “guerrillas” to “regular army”, and standardized, The transformation of legalization has great influence and significance on the entire industry, enterprise, industrial chain, and even user groups.

Fruit-flavored e-cigarettes targeted

Among them, the beginning of the “Notice” mentions that it will guide the main players in the e-cigarette market to gradually adapt to the “Measures for the Administration of Electronic Cigarettes” (hereinafter referred to as the “Measures”) issued on March 11 this year. Article 26 of the “Measures” clearly stated that from May 1, the sale of flavored electronic cigarettes other than tobacco flavors and electronic cigarettes that can be added with atomizers will be banned.

This time, after the “Notice” was released, the ban on the sale of fruit-flavored electronic cigarettes caused heated discussions again.

This means that e-cigarettes such as fruit flavors that cater to young people are particularly targeted. At the same time, fruit-flavored electronic cigarettes withdrew from the stage of history and have gone through a transition period of five months.

Many media and research institutions have reported that electronic cigarettes, especially fruit-flavored electronic cigarettes, are harmful to the psychological and physical harm of young users.

First of all, fruit-flavored and other types of electronic cigarettes are the mainstream of the electronic cigarette market. According to the Beijing News, more than 90% of the pods sold in the market are non-tobacco flavors.

Second, fruit-flavored e-cigarettes have even more adverse effects on adolescents.

In October 2020, the “Research Report on Electronic Cigarette Marketing and Impact on Adolescent Health” by the Institute of Health Communication of Fudan University showed that among the survey samples, fruit flavors were the most popular flavors of electronic cigarettes smoked by teenagers, and nearly half of them started smoking between the ages of 13 and 15. Use electronic cigarettes.

Relevant data from the World Health Organization also validates its view. According to data released by the World Health Organization in August 2021, there are nearly 16,000 flavors of e-cigarette products on the market, including fruit flavors, sweet flavors, candy flavors, and more. These flavors are mainly to attract young users who like to hunt for curiosity.

Chen Liteng, an analyst at Netease, told DoNews, “Tobacco is a strictly controlled industry, and smoking is not recommended. Fruit-flavored electronic cigarettes are more likely to make consumers addicted, especially those with weak self-control and judgment in terms of taste. Teenage users are more likely to be a lethal attraction. Fruit-flavored e-cigarettes run counter to the general principle of less smoking.”

It can be seen that the supervision is clearly oriented to the protection of minor and young user groups. So, from May 1 to October 1, have the fruit-flavored electronic cigarettes really “disappeared” from the market?

In this regard, Chen Liteng told DoNews, “Inventory sales should still be allowed by default. It takes a process to completely ban fruit-flavored electronic cigarettes, and the implementation of the policy is not achieved overnight.”

DoNews consulted multiple e-commerce platforms, searched for keywords such as “fruit flavor” and “electronic cigarette”, and displayed a blank page, or popped up a “green net plan” page to popularize legal knowledge such as the “Tobacco Monopoly Law” for users.

However, there are also merchants who sell electronic cigarettes in the “edge ball”. For example, DoNews searches for keywords such as “atomizing rod” and “vaping bomb” on an e-commerce platform, and the page shows that some merchants are still selling electronic cigarettes and other related products .

Electronic cigarettes say goodbye to barbaric growth

In fact, in recent years, the development of the electronic cigarette industry has been like a “roller coaster”. After all kinds of savage growth, disorderly expansion, and the entry of well-known investment institutions, the regulatory reshuffle is imminent, and the industry has experienced ups and downs.

The data can also explain the popularity of the electronic cigarette track. According to the company’s data, in the past five years, the registration volume of e-cigarette-related enterprises in my country has doubled. In 2019, there were 9,800 new e-cigarette-related companies, a year-on-year increase of 69.27%; in 2020, there were 26,200 new companies, a year-on-year increase of 167.89%; in 2021, 84,100 new companies were added, a year-on-year increase of 221.27%.

At the same time, regulation is also closely following market development. In 2019, the State Administration for Market Regulation and the State Tobacco Monopoly Administration jointly issued the “Notice on Further Protecting Minors from Electronic Cigarettes”, which clearly mentioned that electronic cigarettes are prohibited from being sold and advertised through online channels.

However, the chaos in the e-cigarette market has not been stopped. According to relevant media reports, e-cigarette-related products are still sold online and there is no age limit for buyers.

Then, in July 2020, the State Administration for Market Regulation and the State Tobacco Monopoly Administration jointly launched a special inspection of the e-cigarette market. Internet sales channels such as short videos of e-cigarettes, self-media e-cigarette sales links, and e-cigarette advertisements will be rectified and interviewed.

In March 2022, in response to new problems and new situations in the electronic cigarette industry. The Ministry of Industry and Information Technology and the State Tobacco Monopoly Administration drafted the “Decision on Amending the Implementation Regulations of the Tobacco Monopoly Law of the People’s Republic of China (Draft for Comments)” (hereinafter referred to as the “Draft for Comments”). The “Draft for Comments” aims to promote the legalization of electronic cigarette supervision. ; Conform to the characteristics of e-cigarette products and the current common practice of international supervision; Strengthen the supervision of e-cigarettes in three aspects.

With the release of the “Notice” of the State Tobacco Monopoly Administration on September 29, the industry agreed that e-cigarettes will usher in the strongest supervision in history.

Dong Yizhi, a special researcher of Netease, said, “In the short term, policy supervision will become stricter, and a large number of e-cigarette companies will “survival of the fittest”. In the long run, every industry that has experienced savage growth is bound to become standardized without clear supervision. It is not conducive to the healthy development of the electronic cigarette industry.”

In this regard, Yu De, a special researcher of Netease, also believes that the absence of clear standards and legal norms is not conducive to the development of the electronic cigarette industry. The entry threshold for electronic cigarettes is low, and there is no reliable clinical experimental data on the harm of electronic cigarettes to the human body, which has great potential harm and destruction.

This is indeed the case. 20 years ago, a Chinese pharmacist invented electronic cigarettes, and it was not until 2018 that electronic cigarettes ushered in the trend. Electronic cigarettes are usually composed of electric cores, heating atomizers, and cartridges for storing smoke liquid. The smoke liquid passes through the heating atomizer and releases aerosols of different flavors, giving people the illusion of smoking.

And the controversy about the harm of electronic cigarettes to the human body in the market has never stopped. Contrary to the “health” and “safety” promoted by e-cigarette companies, many market research institutions have pointed out that e-cigarettes can cause damage to the human body, such as lung damage, asthma, pulmonary obstruction and other diseases.

Industry influence geometry?

After the release of the “Notice”, the time-sharing chart of the Wind Financial Electronic Cigarette Index shows that the overall stock price has been declining.

Chen Liteng revealed to DoNews that after several years of development and reshuffle in China, e-cigarette companies have been divided into three echelons. The first echelon is represented by RELX (Relax); the second echelon is represented by companies such as Grapefruit, Ono, and Fulu. ; The third echelon, represented by companies such as Yiwu, Longwu, Magic Flute, etc.

Among them, RELX is an electronic cigarette brand under Shenzhen Fog Core Technology. As the largest e-cigarette company in China. In January 2021, Fog Core Technology was listed in the United States with an issue price of $12 and an opening price of $22.34. The stock price once rose to $35. Since February of the same year, the stock price has been falling all the way. As of September 23, Fog Core’s stock price has fallen to around $1.

“Before the policy was released, e-cigarette companies grew rapidly. Now, after strict and standardized policies, non-incentive policies will further reduce the market space. In the future, e-cigarette companies will inevitably usher in a new round of reshuffle.” Chen Liteng told DoNews.

According to statistics from China Business News, as of September 29, a total of 385 e-cigarette companies have obtained tobacco monopoly production licenses. Among them, 6 are manufacturers of nicotine for e-cigarettes, 40 are manufacturers of atomizers, and the rest are manufacturers of electronic cigarettes including brands and OEMs.

In addition, in addition to stricter policies, e-cigarettes also have some uncertainties. For example, regarding the tax rate of e-cigarettes, e-cigarettes are currently not classified as tobacco products, and the tax rate is only 13%. Whether the tax rate will be further adjusted in the future will inevitably affect the development of e-cigarette companies.

“If you refer to tobacco, the tax rate will definitely increase significantly, and it may become a 36% tax rate for Class B cigarettes in the future. Then, the tax rate advantage of e-cigarettes will no longer exist. Of course, it will ultimately depend on how the regulatory authorities divide it.” Chen Liteng said.

This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-10-02/doc-imqmmtha9566848.shtml
This site is for inclusion only, and the copyright belongs to the original author.