Chinese E-cigarette Companies Have Two Major Advantages

Leveraging the global market of billion dollars, Chinese e-cigarette companies have two major advantages.

 

Presently, there are approximately one billion traditional cigarette consumers in the world. However, with the increasing strictness of tobacco control in various countries and the alarming consumers’ health awareness, the traditional cigarette market has been declining. Nevertheless, the market size of electronic cigarettes(HNB heatsticks) based on “harm reduction” shows a good development trend.

 

Traditional tobacco giants actively transform and lay out new markets for e-cigarettes.

 

The global e-cigarettes (heat not burn heat-stick) market scale continues to expand. According to Euro monitor data, global e-cigarette product sales in 2019 were approximately US$48.55 billion. The growth rate lowered, but the proportion is still increasing and its proportion of all tobacco products has risen from 2.29% in 2014 to 5.94% in 2019.

 

At the same time specifically to electronic atomized cigarettes, the global sales reached US$20.2 billion in 2019, a year-on-year increase of 28.43%. At present, the consumption of electronic atomized cigarettes is mainly concentrated in the United States, the United Kingdom and other European and American countries which as well account for 47.77% and 13.40% respectively. While on the other hand, China only has 6.85%. This is related to the relatively late development of China’s e-cigarette market. However, despite the influence of policy and regulatory tightening factors, the global market is currently showing a good development trend after undergoing adjustments. This is because e-cigarettes provide traditional cigarette consumers with more choices. In the current market structure, e-cigarette products represent the mainstream global development trend in this field in the future. This can be seen from the active and rapid deployment of the world’s four major tobacco companies in the e-cigarette market.

 

  1. Philip Morris International
  2. British American Tobacco
  3. Japan Tobacco and lastly
  4. Imperial Tobacco which occupy the market through acquisitions and launch of its own brands.

 

The dual advantages of China’s e-cigarette industry chain

 

Although China’s e-cigarette market has developed late and the market scale is small, Chinese companies can still use the two-wheel drive of industrial chain status and brand development to enhance the value and status of Chinese e-cigarette companies(heatsticks manufacturer heechi) in the global industry chain.

 

First of all, Chinese e-cigarette companies are in an absolute leading position in the middle and upper reaches of the industry. China is the world’s largest e-cigarette production base. In 2019, a total of 218 countries and regions around the world purchased e-cigarettes from China and has formed a complete industrial chain from upstream raw material suppliers to midstream e-cigarette designers, manufacturers, as well as downstream sales companies.

 

In addition to that, although Chinese e-cigarette manufacturers mostly use the OEM/ODM model to produce for international brands, these models help domestic companies to accumulate rich technology and supply chain experience. In other words, long-term foundry experience, technological precipitation and industrial supply chain aggregation have enabled domestic companies to have advantages in cost control and management.

 

Furthermore to manufacturing advantages, Chinese e-cigarette companies (HEECHI heat not burn) have another level of brand building. In addition to the cost-effective advantages brought by a complete supply chain system, Chinese companies often pay more attention to consumer experience especially the experience accumulated in the consumer electronics and fast-moving consumer goods markets. 


Post time: Jan-07-2022