Nearly 13 billion investment, 2 billion year-end bonus A year ago, Juul, an American e-cigarette brand, seemed to have a bright future. But in a short period of one year, it has lost in the global market, and different countries and regions have closed the door to it. How did it all happen? Why on earth should countries boycott Juul? This article is from the New York Times by Sheila Kaplan, ANDREW JACOBS and Choe sang Hun. The original title is “the world pushes back against e-cigarettes and Juul”. Translation: Michiko.
International market with high expectations
In January 2019. Howard A. Willard III, chairman of Altria group, the world’s largest cigarette manufacturer, made a special trip to California, where he held talks with the executives of Juul lab in Silicon Valley and signed an acquisition agreement: according to the agreement, Altria will purchase 35% of Juul’s shares for nearly $13 billion.
Juul is the unicorn of the electronic cigarette industry in the United States. Its products are light, portable and full of sense of technology. Nowadays, in American society, many people are disgusted by Juul’s seduction of teenagers to smoke, but Altria group ignores these negative emotions and thinks that it sees the development prospect of the international market of the e-cigarette brand.
“I believe half of Juul’s revenue will come from the international market in the next five years,” Howard said publicly at a business gathering of 200 executives Kevin burns, Juul’s chief executive, is more optimistic: “I told my team to achieve this in a year!”
At that time, hearing of such ambition, everyone on the stage laughed. But a year later, no one laughed again.
For several years, with the increasingly strict control of cigarette products in the United States, Altria began to focus on the more friendly environment and loose policy overseas market. But now, both Altria and Juul, which it acquired, have suffered a complete failure in their overseas market expansion.
Cold in overseas market
While Juul is looking at the global market, many countries have also issued restrictions on electronic cigarettes in the same period. As a result, Juul’s ambitious overseas expansion plans are doomed from the very beginning.
Last autumn, Juul launched a plan to enter the Chinese market, but it was aborted four days later. It also had to give up the Indian market after the government introduced the ban on electronic cigarettes. Thailand, Singapore, Laos and Cambodia have also introduced regulations banning the sale of electronic cigarettes. These promising cigarette markets have closed their doors on Juul. In the Philippines, the president is even more extreme, directly ordering the arrest of people who smoke outside the smoking area.
In addition, Juul also postponed plans to enter the Netherlands and announced its withdrawal from the Israeli market. Juul’s sales and user numbers in the Korean market began to plummet after South Korea issued a formal warning about the dangers of e-cigarettes.
Kathleen Hoke, director of the school of public health at the University of Maryland, said: “this is an unexpected rise and fall. Countries that don’t seem to pay too much attention to public health are now resisting e-cigarettes and making them part of their own culture. “
Even Indonesia, which has no smoking ban and the highest proportion of smokers in the world, doesn’t like e-cigarettes very much. Last month, Juul announced that it would no longer ship pipes and bombs to the Indonesian market.
Backyard fire: American society is phasing out Juul?
In American society, electronic cigarette is becoming a popular product among young people. Public health departments in other countries are worried that young people in their own countries will “follow suit”.
Last summer’s outbreak of e-cigarette lung disease in the United States still left many people with a lingering fear. According to the findings of the US Food and Drug Administration (FDA), the electronic cigarettes popular in that period contained a large amount of THC sesame oil and vitamin E acetate, leading to respiratory diseases in thousands of people.
Although Juul replaced thc with nicotine salt, many consumers still didn’t buy it. In the end, Juul had to give up selling fruit flavored and mint flavored cigarettes in the United States (because these two flavors are the most popular and criticized by teenagers), and after the electronic cigarette ban, Juul could no longer sell products to minors.
But it’s a different story in the overseas market: Juul offers people of all ages a variety of flavors, including peppermint, mango nectar, Royal cream, berry, apple, and so on. But according to Juul’s latest statement, the production of cream flavored tobacco bombs will be phased out recently.
Redefining strategy: no one still pays
Recently, two executives of Juul’s global business resigned and the Department was restructured. Nevertheless, the company believes that the global market is their main direction of development.
“We have been working to reduce smoking rates among young people and to focus on the health of adults who smoke for a long time,” said Juul’s spokesman. Now we have decided to promote different strategies in different countries and regions to meet local regulations and needs. “
However, the public sectors and people in different countries will not eliminate the fear of e-cigarettes because of this sentence.
At home, conflicts between authorities, tobacco advocates and Juul are growin.