This VAPEAST rewrite explains RLX Technology’s Strategic Expansion: Integrating Overseas Operations and Boosting Global Revenue with a sharper focus on market context, brand positioning, and what the update may mean for the wider vape industry.
Recently,RLX Technologyupdated its20-F report(the annual report for non-US companies) on the USSEC websiteon April 19. This report, enriched with details about the company’s overseas operations, revealed significant insights compared to the earlier2023 annual report.
On March 15,RLX Technologydisclosed its total revenue for 2023, amounting to1.586 billion yuan. The latest20-F reportbreaks this revenue down by region, with theChinese marketaccounting for approximately1.358 billion yuanandoverseas marketsgenerating around229 million yuan. This means that in 2023,RLX Technology’s overseas revenueaccounted for14.4%of its total revenue.
Unique Corporate Structure of RELX
“RELX,” a well-knowne-cigarette brand, was established byRLX Technologyin January 2018. RLX Technology operates theRELXbrand, similar to the relationship between “WeChat” and “Tencent.”
Officially,RELXbegan exploring international markets in 2019 and established a new company,RELX International, in 2021 to handle its overseas operations. This included launching theWAKAbrand of disposable e-cigarettes for international markets in November 2021.
RLX TechnologyandRELX Internationalsigned a non-compete agreement on December 15, 2020, which allowed each entity to operate independently in their respective markets. Thus, RLX Technology handles theRELXbrand’s operations in China, while RELX International manages theRELXandWAKAbrands outside China.
Stock Market Dynamics
On January 22, 2021,RLX Technologywent public on theNYSEunder the ticker “RLX,” becoming the first Chinese e-cigarette brand to be listed. Notably,RELX Internationalwas not integrated into RLX Technology at the time of the IPO, and its financials were not consolidated intoRLX Technology’s financial reports. This separation may have been due to the nascent stage and the losses of RELX International’s operations, along with the uncertainties in its largest market, theUnited States.
Strategic Acquisitions and Expansions
In a complex transaction detailed in a July 10, 2023, announcement byBoton Groupin China,RLX Technologyacquired several vaping-related businesses in December 2023 to drive international expansion. These acquisitions included 100% stakes inSS North Asia Holding Limitedand its subsidiaries (“SS North Asia“),Sunnyheart HK Limitedand its subsidiaries (“Sunnyheart“), andRelx Indonesia Holding Inc.and its subsidiaries (“Relx Indonesia“).
These acquired companies primarily operate in the vape product sales inNorth AsiaandSoutheast Asia. Both the company and the acquired entities were controlled by Ms.Wang Ying(Kate).
This strategic move, costing approximately173 million yuan, brought in an overseas revenue of229 million yuanforRLX Technology.
Future Directions
With the termination of the non-compete agreement withRELX Internationalin the third quarter of 2023,RLX Technologyis now free to enter markets previously reserved forRELX International. During the Q3 earnings call, it was revealed that the listed company would gradually transition to using the brands “RELX” and “WAKA.”
This strategic realignment suggests thatRLX Technologyis increasingly integrating its overseas operations into the listed entity, potentially diminishing the role ofRELX International.
Final Take
RLX Technology’s Strategic Expansion: Integrating Overseas Operations and Boosting Global Revenue is worth watching because it reflects how quickly the vape market keeps shifting. The practical next step is to track verified launches, regional availability, and how brands respond in real retail channels.
