Thursday, May 23, 2024

Huge profits of e-cigarettes – The sales price is 200 yuan, and the factory price is about 50 yuan!


In recent years, e-cigarettes have been pushed to the spotlight by capital. However, the current hottest E-consumer goods have not performed well in the capital market recently. What is the matter?

Negative news hit the stock price of e-cigarette company and encountered “roller coaster fall”

Since August 6 this year, the A-share e-cigarette index has risen all the way. In just over a month, the e-cigarette index rose 25.36% to September 11 this year.

In the following period, the e-cigarette index fell all the way. As of the close on October 16, the e-cigarette index fell 9.41% in more than one month.


Wu Li, deputy director of Tianfeng Securities Research Institute: around September, several states in the United States had some negative reports about this kind of atomized e-cigarette in the United States. Therefore, the market was worried that the performance of e-cigarette enterprises might be affected.

More than 2 million e-cigarette industry worker are employed in China, 90% of vapes are exported

Electronic cigarette is a kind of electronic product that imitates cigarette. It is a kind of product that can let users smoke after nicotine is turned into steam by means of atomization and so on. In recent years, e-cigarettes have developed rapidly and become popular all over the world.

According to the data of electronic cigarette industry committee of China Electronic Chamber of Commerce, China is the largest producer and exporter of electronic cigarette products in the world. In 2018, the number of domestic employees of electronic cigarette exceeded 2 million, with an annual sales volume of 33.75 billion yuan and a total export volume of 28.69 billion yuan.

Ou Junbiao, chairman of the electronic cigarette industry committee of China Electronic Chamber of Commerce: the export data only represents the electronic cigarette kit, not the vape juice. Thevape juice is ten or twenty times of that of the device, and tens of billions, or hundreds of billions, which together should be hundreds of billions of markets, and will soon develop into a trillion level market.

Huge profits attract entrepreneurs to join in, a number of capitals speculate e-cigarettes

A set of electronic cigarettes including atomizers and carts, the market price is 300 yuan, and the market price of disposable electronic cigarettes can also be sold to about 50 yuan. Is the electronic cigarette industry profiting? How high is the profit of electronic cigarette?

Wu Boke, who is engaged in e-cigarette sales, told reporters that the popularity of the e-cigarette industry this year has exceeded his expectation, and he has to receive several customers to talk about cooperation every day.

Wu Boke, general manager of Shenzhen Yinfan Life Technology Co., Ltd.: our monthly compound growth rate in the past month has reached more than 30%, which is a stage of rapid development. According to the sales data of our sales platform in the latest quarter, the overall gross profit rate of the sales terminal has reached more than 60%.

According to the insiders, a set of electronic cigarettes with a retail price of about 200 yuan will cost about 50 yuan for the factory, while a set of disposable electronic cigarettes with a retail price of about 40 yuan will cost only about 10 yuan for the hardware. High return, coupled with the huge space for brand growth, has attracted a number of capital to test the e-cigarette industry.

Ren Yi, partner of BLESS (Shenzhen) Technology Co., Ltd.: nearly ten capitals have contacted us in just half a year, and we have completed three rounds of financing in this half a year. By the end of this year, it is possible to complete the financing with a valuation of 1 billion yuan, which is far beyond our expectation.

This year, Luo Yonghao, founder of Smartisan mobile, announced to enter the e-cigarette industry in a high-profile manner, and the founding team of Internet new media “Tongdao uncle” has also successively entered the field. A large number of entrepreneurs swarmed into the e-cigarette industry, and China’s e-cigarette market ushered in an investment opportunity.

Not long ago in June, the SnowPlus e-cigarette team just announced the completion of round a financing with an amount of more than $40 million. In September this year, MOTI electronic cigarette has completed a round of financing of US $50 million. According to incomplete statistics, IDG, Zhen Fund, Jingwei China, source capital and other venture capital institutions have successively entered the field of e-cigarettes.

Wu Lingyun, director of Xuri big data center: since 2019, the capital market has paid great attention to the e-cigarette industry, and there are about 43 companies that have successively obtained financing in China. Now a large number of well-known capital and some related capital have entered the industry in large quantities, which belongs to the stage of capital speculation.

Vape produces a variety of harmful substances, the industry calls for the introduction of industry standards as soon as possible

China is the first country to produce e-cigarettes. Due to the lack of clear industry standards and regulatory mechanisms, some non-performing businesses pursue short-term profits and harm consumers from time to time. Industry insiders also call for the introduction of industry standards as soon as possible.

In the promotion of e-cigarettes, most of the e-cigarettes use electricity to heat the vape juice. After the e-juice is atomized at high temperature, the effect of ordinary cigarettes is also achieved. But experts say that in addition to nicotine, the main harmful substance of traditional tobacco, e-cigarettes will also produce derivative harmful substances in the process of heating and transmitting the vapor.

Zhi Xiuyi, vice president of China Association for tobacco control: at present, apart from the nicotine content in electronic cigarettes, there are other harmful substances, including formaldehyde and propylene glycol, which also affect our health.

According to the data released by China Business Industry Research Institute, the production of electronic cigarettes in China also increased from about 600 million vapes in 2014 to about 2.2 billion vapes in 2018. But what’s more worrisome is that e-cigarettes have been separated from the regulation for a long time, which has become a health hazard that anyone can sell or buy. In recent years, the lack of electronic cigarette regulation has become the biggest problem for practitioners.

Tian Ze, general manager of Amber Industry (Shenzhen) Co., Ltd.: at present, the national standard has not been issued, and the industry is not standardized. For the sake of short-term interests, some bad businesses have not been well controlled in product quality, which has brought many negative effects to the industry. Based on the same origin of medicine and food, we will increase efforts to develop healthy products.

Yao Jide, chairman of Hengxin Technology Group: in 2017, the Association issued e-cigarette standards, but these are not national mandatory standards. I hope that the country can seriously and timely issue this standard, so that our whole industry can have laws and standards to rely on, so that the whole industry can develop healthily.

On October 1 this year, the newly revised regulations on smoking control in Shenzhen Special Economic Zone came into effect, and electronic cigarettes have been included in the scope of smoking control.

Globally, the U.S. Food and drug administration has issued a statement warning consumers to stop using electronic cigarettes with tetrahydrocannabinol. At present, there are more than 1000 cases of lung diseases related to electronic cigarettes in the United States, the statement said. San Francisco is the first city in the United States to ban e-cigarettes.

It is understood that India, the Philippines, Vietnam, Singapore and other countries have issued strict e-cigarettes ban, while most European and American countries regulate e-cigarettes as tobacco or medicine.

Pictures from CartoonStock

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