Friday, March 29, 2024

Juul will return to the Chinese market and the Japanese head will take charge of the Asian market

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On August 10, sources told blue hole that the U.S. e-cigarette brand Juul will return to Asian markets including China.

It is reported that the Asia regional head may be hirate Haruhiko, the newly appointed head of the Japanese market.

For the highly concerned Chinese market, people familiar with the situation told blue hole that the new head of the Chinese market was a China expert, but not a Chinese, and might officially take office in August.

Juul entered the Chinese market last year

Juul entered the Chinese market on the eve of double 11 last year, but in a curvilinear way. Juul opened online stores in tmall and Jingdong through two Chinese distributors, but then stopped its trial in China because of the new regulations on e-commerce sales ban in November and other reasons.

Taoyatao, a dealer in Hangzhou, launched the Juul tmall store, while jinyonghe launched the tmall store, and then both closed down.

Last year, it was reported that Wang Huainan, the chairman of baobabushu, would be the person in charge of Juul in China. However, with the implementation of the new regulations on electronic cigarette sales ban, Wang Huainan’s post also dissipated. Instead, Wei Xiaowei, the business partner of baby tree, joined Juul. However, Wei He’s then marketing team also left, and Juul’s entry into China failed.

Juul in the world: exit from multinational markets

In addition to exiting the Chinese market, Juul has adopted a business reduction approach in other Asian markets and European markets.

This has something to do with Juul’s plight in the United States.

Juul has two main mountains in the United States.

One is the ban on flavoring e-cigarettes implemented in January 2020. Juul removed flavoring products, including a variety of fruit flavors, and retained only tobacco and mint flavor puffs.

Second, Juul has been accused of juvenile epidemics in the United States. Several states in the United States have launched lawsuits against Juul, accusing it of using the Internet to publish ads to attract young people. Dozens of schools have launched lawsuits against Juul, which have not yet been concluded.

In addition, the e-cigarette lung disease that began in September 2019 also affected e-cigarette brands including Juul. Finally, CDC of the United States believed that the products causing lung injury were thc electronic atomization products added with vitamin E from the black market, and ultimately had nothing to do with nicotine e-cigarettes, but the panic caused was irreparable.

Juul started two rounds of layoffs, cutting nearly 5000 people to save money.

The core figures, including co-founder James munses and chief engineer Cole harton, are also leaving in the process of adjustment.

In addition to global layoffs, Juul moved its headquarters from San Francisco to Washington in order to maintain good communication with regulators.

According to current news reports, Juul withdrew from the South Korean market in May. The reason is that in the government’s health warnings, it can no longer gain market share.

Also in May, Juul significantly reduced its European operations and stopped sales in Austria, Belgium, Portugal, France and Spain.

Juul’s reasons for leaving these countries are uneven.

Sales in Spain and France are relatively high compared to most European markets, but not enough to justify the need for the necessary staff to deal with the troubles caused by local regulators.

Insiders say Austria, Belgium and Portugal are considered too small to continue investing.

In the past few months, Juul has delayed its launch in New Zealand and stopped selling in Indonesia.

In February, Juul fired two executives in charge of Europe and South Asia and reduced the size of its Singapore office.

In 2019, sales in Europe and the Middle East will be about $107 million, well below the sector’s target of about $600 million.

Other markets that have proved ineffective include Thailand, India, Singapore, the Philippines, Laos and Cambodia.

Juul also delayed its launch in the Netherlands and stopped sales in Israel.

Juul status: estimated at $12 billion, market share down 10%

Juul currently has 3000 employees.

Sales of mint flavored products soared after Juul stopped selling flavored puffs, according to Nielsen in April.

Previously, fruit flavored products accounted for 33% of the total sales of e-cigarettes, falling to only 9% in April this year. But in the next few key months, peppermint and menthol products quickly dominated the e-cigarette market.

According to Nielsen data, menthol related products increased from 33% in November to more than 62% in April. Juul captured 91% of that increase.

From the retail channels tracked by Nielsen, the overall market for mint and menthol products increased from about $95.5 million per month to $209.5 million per month.

Sales of tobacco flavor products also increased from about 17% of the market to 22% of the market.

Juul had $2 billion in sales last year, but lost $1 billion, the Wall Street Journal reported.

Juul’s sales in the first quarter of this year amounted to $394.2 million, according to the latest disclosure by the company. If this trend is maintained, Juul could surpass $1.3 billion in sales in 2018, but not as much as last year’s $2 billion.

In May, Bloomberg reported that Juul had cut its valuation by 35% to about $13 billion a few days after it planned to cut about a third of its workforce.

This is a far cry from Altria’s valuation of $38 billion when it acquired 35% of its shares with $12.8 billion in 2018.

Due to regulatory pressure from the U.S. government and the enforcement of the flavoring ban, as well as the accusation of the epidemic of e-cigarettes among teenagers, Altria made two write downs of $8.6 billion in 2019, reducing Juul’s valuation from $38 billion at the time of investment to $12 billion.

That’s not much different from Juul’s internal valuation.

Juul’s market share has fallen about 10% in the past year, although it still accounts for 60% of convenience store and similar store sales, according to IRI, a market research firm.

Crosswaite, Juul’s chief executive, said he was comfortable with the shrinking business as long as he followed the right strategy.

The good news is that Juul has submitted a PMTA application to the FDA to stay in the U.S. market and continue to sell.

Juul in Japan: new head has been appointed

On July 2, according to the Wall Street Journal, Juul was considering entering the heavily regulated Japanese market.

In a statement, Juul said that Haruhiko Hirayama, a former employee of Takeda pharmaceutical company in Tokyo, was hired to lead the work and was appointed as the representative director and chairman of the newly established Juul labs Japan Co.

Mr. hirsuto served as the executive director and vice president of Takeda Pharmaceutical Industry Co., Ltd., and has participated in the Boao Forum for Asia annual meeting on behalf of Takeda.

In 2017, he participated in the Boao Forum as the chief executive of corporate communication and public affairs of Takeda.

According to online data, Takeda pharmaceutical was founded in 1781, founded by Takeda nagoyama I. It is Japan’s largest pharmaceutical manufacturer with more than 200 years of history. Its employees are located in more than 80 countries and regions around the world, focusing on the research in the four major therapeutic fields of tumor, digestive (GI) neuroscience and rare diseases. It officially entered China in 1994.

Takeda once created the largest M & A in the history of Japanese enterprises in 2018, with us $64 billion acquisition of shire pharmaceutical. After the merger, Takeda pharmaceutical has an annual total revenue of more than $30 billion.

Takeda has a market value of nearly $60 billion, and his background and strength in the pharmaceutical industry can not be underestimated.

For Juul, entering the Japanese market will be a challenge. Nicotine containing e-cigarettes are classified as drugs in Japan and need to be licensed for sale in Japan, and no company has yet been approved.

But Japan has become a battleground for another kind of alternative cigarette products, namely heating and non combustible products like iqos.

If Juul enters the market, it will compete with tobacco giants such as iqos and British American Tobacco’s glo.

Juul must be a responsible and science oriented company and must win the trust of public health stakeholders and society, hirsuto said in a statement.

He looks forward to ensuring that Juul labs Japan Co. Ltd. takes this methodical approach to explore bringing its electronic nicotine delivery system to the 19 million smokers in Japan.

In a statement, crosswaite said the new head of Japan could help Juul win trust and get in touch with Japanese regulators.

Blue Hole observation: more difficult

To be honest, it’s very difficult for Juul to enter any market.

If Juul enters China, it is bound to comply with some of China’s current regulatory provisions on e-cigarettes. For example, the most direct one is the online ban on e-cigarettes, which means that Juul can only participate in the competition through offline channels.

Secondly, there is no successful precedent for overseas tobacco companies to enter the Chinese market. How they will enter the Chinese market will also test Juul’s wisdom.

Juul has submitted the PMTA to apply to stay in the e-cigarette market in the United States. Whether there is enough time to consider other markets is still unknown.

Can Juul do well in the complex Chinese market? What will be the reaction of Chinese e-cigarette brands?



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