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In recent years, major participants in the e-cigarette industry such as RELX, SnowPlus, Moti, Yooz, Smoore International have enjoyed the dividends brought about by the rapid development of the industry. However, since e-cigarettes were banned from online sales on November 1 last year in China, rumors about e-cigarettes were overwhelming, and many small companies in the industry could not hold up declaring bankruptcy, leaving behind some mainstream big brands.
Most of the remaining big brands are following the “brand authorized store” model, and this model happens to be sought after by e-cigarette enthusiasts. For a while, the number of “brand authorized stores” has grown rapidly. Taking RELX as an example, it is reported that in the next three years, it will spend 600 million to open 10,000 stores. This model enables the China “brand authorized store” that formal cigarette channels to gradually expand in scale.
But how long can such rapid growth last? Although new types of tobacco are sought after by young people, they may reach the ceiling of penetration. The e-cigarette industry has a low threshold, many players participating in the competition, and serious homogeneity, which has led to the continuous narrowing of the incremental market and intensified competition in the stock market. It will be difficult to maintain the rapid growth in recent years in the next few years.
Only through continuous improvement from raw materials, maintaining high and stable quality, or highlighting differentiation to break through the ceiling restrictions and find new opportunities, it is possible to be outstanding
Compared with the traditional tobacco market, the concentration of the electronic cigarette market is relatively scattered. E-cigarette companies often launch disposable products with different flavors and refill products to meet the rigid needs of consumers. According to the price points of various brands currently understood, disposable products are mainly concentrated in the low-end price range of 39-49. The products are mainly concentrated in the mid-end price range of 199-399, and there is little difference in product price between companies.
The proportion of R&D investment in the e-cigarette industry is generally not high, most of which are OEM products, which actually come from the same factory. Both experienced tobacco players and new e-cigarette enthusiasts can easily participate in industry competition. Taking RELX as an example, it has been continuously improving in performance, widening the gap with other brands.
However, many e-cigarette companies currently do not have too many technical barriers in design or manufacturing. First, OEM has become a common phenomenon in the industry; second, with the current supply chain level, any new product promotion plan will usher in more than a dozen competitors in a short time. Under this situation, how will China e-cigarette brands maintain rapid growth?
As the incremental market of the e-cigarette industry continues to narrow and competition in the stock market intensifies, there has been a trend of evolving into a price war. With the launch of e-cigarette sticks for 9.9 yuan by yooz, some mainstream brands have continued to follow up and launched disposable e-cigarettes at the same price. Take disposable e-cigarettes as an example. The overall cost of having built-in batteries, chips, and circuit boards is not low, but the selling price is 9.9 yuan, basically no profit at all. How far can the price war industry go?
△Where are the new opportunities?
I believe that e-cigarette companies can start with raw materials and continue to innovate and improve the disadvantages of the original e-cigarettes, and find new opportunities in the fierce competition.
In the future, synthetic nicotine can be used to eliminate the restrictions imposed by traditional nicotine. Synthetic nicotine has the same molecular formula as natural nicotine. As an additive, it may not be included in the e-cigarette regulations of the Food and Drug Administration.
There are more and more similar competing products, and consumers will only choose from the brands they remember when making decisions. You can choose to use a differentiated strategy in product positioning and price system, find your own advantages and sell points, and carry out continuous marketing maintenance. Only when you become a representative of the category can you get an initial victory.
If the company’s innovation ability can continue to export, then the product will have a lot of room for growth; conversely, the ceiling may appear.
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