From May 1st, the management measures for the electronic cigarette industry will be officially implemented, and the national standard for the electronic cigarette industry is also being formulated. In addition to prohibiting the sale of flavored e-cigarettes other than tobacco flavors and e-cigarettes that can be added with atomizers, the new regulations also clearly state that e-cigarette retail sales need to apply for a tobacco monopoly license, and restrict the supply of nicotine, the key raw material of e-cigarettes. It can be seen from the above policies that the electronic cigarette industry will basically refer to traditional tobacco supervision in the future, and the era of strict supervision is coming. The industry believes that after the implementation of supervision, the state of low-threshold and disorderly development of the electronic cigarette industry in the past will be changed, and the industry will enter a period of benign development.

The policy has increased the protection of minors. Although the sale of e-cigarettes to minors has been explicitly prohibited before, and the top brands have also set up a comprehensive minor protection system, there are still some businesses that pursue interests to sell flavored e-cigarettes of various flavors to minors. After the new regulations, only tobacco-flavored electronic cigarettes can be sold on the market, and the various flavors of electronic cigarettes that are popular among young people are gone, which can reduce the number of non-smokers, especially young people, becoming smokers. However, the flavoring needs of adult e-cigarette users will not be met, which may lead them to return to the cigarette camp, and even breed problems such as black markets and cottages.

While regulating the domestic market, the policy encourages exports. The electronic cigarette industry is one of the few industries with an absolute leading edge in my country. As the undisputed overlord of the global electronic cigarette industry, more than 90% of the world’s electronic cigarettes are produced in China, and 87.3% of the public patents of electronic cigarettes also belong to China. In 2021, China’s e-cigarette industry exports will be about 138.3 billion, a year-on-year increase of 180%. And there are now 82 million e-cigarette users in the world, with an annual growth rate of 20%. From the perspective of social benefits, this is a good business. Because of this, countries such as Southeast Asia are currently eyeing the industry chain and poaching Chinese e-cigarette companies. For such an advantageous industry, we can’t hand it over to others. While regulating the orderly development of the domestic e-cigarette industry, relevant departments should also provide convenience and support for enterprises to earn foreign exchange through exports, and try their best to keep the industrial chain and advanced production capacity in China. As the Bao’an District of Shenzhen City, which gathers about 90% of the domestic e-cigarette production capacity, it should cherish and care for such a naturally formed 100 billion-level export industry.

Some experts suggested that the policy should also take into account the short-term tolerance of the industry. It only took more than a month from the implementation of the new regulations. Shenzhen and Dongguan, the main production areas of e-cigarettes, were affected by the epidemic again, and their production capacity could not be fully utilized. In such a short period of time, it was necessary to digest inventory, develop new products, and change franchise stores There is a lot of work to be done, and it is considered an almost impossible task. In addition, after the new regulations, flavored electronic cigarettes, which account for more than 90% of the market share, will withdraw from the market. According to the data of the Electronic Cigarette Industry Committee, there are about 50,000 offline stores nationwide, and a total of 5.5 million people are employed in the upstream and downstream of the industry chain. If the implementation of supervision is promoted too quickly in the short term, it is necessary to consider the impact on employment and taxation in the short term.

With the implementation of supervision, an e-cigarette industry that grows wildly and is full of Internet tactics will become history, and a new industry with healthy standards is coming to us, which is a boon for the industry and consumers. At present, the industry is turning sharp and steep, and all parties should give sufficient buffer time, and scientifically promote the smooth implementation of policies.

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Author: Kailee Zhou

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