New E-Cig Trends from the Shenzhen E-Cigarette Expo

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By TobaccoChina Online

On April 14, 2018, the 4th Shenzhen International Electronic Cigarette Industry Expo (IECIE) took place as scheduled in halls 6-9 of the Shenzhen Convention & Exhibition Center. Over 50,000 visitors, 1,500 brand owners, and 350 domestic and foreign media from 45 countries participated in the expo.

Its display area was expanded to 7,500 sq.m. while the total area of the expo halls reached 37,500 sq.m. The number of exhibitors and visitors reached the highest level in history, not only refreshing the market’s original knowledge of e-cigarettes, but also making felt the strong rise of Chinese brands in the global e-cigarette market.

Exhibitors included suppliers of batteries, atomizers, and e-liquids in the upstream; e-cigarette design and manufacturing companies in the midstream; and both professional e-cigarette manufacturing companies and international tobacco giants’ e-cigarette manufacturing departments, and self-owned e-cigarettes in the downstream.

The number of self-owned e-cigarettes brands and the intensity of brand competition in China has increased significantly. At the event, cool hip-hop and catwalk shows attracted a large number of spectators to watch, together with other events such as the vaping contest, steam talent show, and precision winding contest alongside fashionable elements like electronic music, modified cars, tattoos, and graffiti, making visitors realize that e-cigarettes are not just a vaping tool, but more of a tidal demonstration.

Expo visitors were overwhelmed by a dazzling variety of brands and new products, featuring powerful functions, latest technology, and intricate details. Some of the new features include double nebulizer and ergonomic designs perfectly fitting the palm, multi-switches, and a new warm-up function, all of which enhance the user experience. Some exhibitors said that e-cigarettes have gradually become as “smart” as mobile phones.

The good news is that at IECIE, a growing number of domestic e-cigarette companies have moved from the “low-end, low-cost” primary stage to demonstrate great importance given to rebranding and reshaping e-cigarettes in China. This has been done by seeking increasing perfection. For instance, the domestic SKEY brand is the world’s first pin-type heating. The company innovates traditional tobacco technology, leading to a new era of healthy smoking. Combined with smart pumping counts and quality taste, it can be described as an advocate of healthy and eco-friendly smoking.

With a factory that has passed eight international quality system certifications, the Blunderbuss brand has strict professional production lines, r&d capabilities, and excellent liquid formulation team. Moreover, it has also built up China’s only center that has received qualification for liquid detection and analysis, providing quality control for the transportation of liquid on the market. The center is equipped with the most advanced analysis and detection instruments in the world and has established a complete raw material analysis database.

Given the products, e-cigarette manufacturers have significantly stepped up efforts in technical r&d and design innovation. This is reflected in several aspects. First is the improvement of liquid storage and infusion technology, and the addition of new models such as top injection and overall replacement, bringing basic control over conventional liquid leakage issue. Flavored liquids come in a wide variety, from purely mimicking the aroma of cigarettes to mints, fruits, coffee flavors, tea aromas, and mixed aromas. The concept of nicotine salt has also been proposed, claiming to be less irritating, low hazardous, and offers a high degree of satisfaction. Heating technology has grown more mature, from single-chip heating to breakpoint heating, improving overloading and overheating occurrence. Also, great efforts have been made in packaging innovation. Miniaturization, art, and portability have become fashionable, and wood, silicone, and other new materials have been adopted. The shape of electrical appliances, pens, arcs, and other packaging go more in line with aesthetic and ergonomic requirements, more adaptable to the fashionable and stylish features of e-cigarette products.

Shenzhen Yijiate Technology Co., Ltd. is mainly engaged in high-end e-cigarette products. It has its own brand, Aspire, and hundreds of product patents. The company’s new products on display at IECIE include the Skystar Revvo Kit featuring 210W high power and large vaping protection, high-end touchscreen, and ultra-fast response; and the Cleito EXO series, characterized by a large amount of liquid up to 4ml, top injection and air intake, leak-proof design, and supports RTA self-winding.

In addition to e-cigarette devices, another major element of IECIE was e-liquids. Its series include tobacco series, fruit series, beverage series, mint series, food, and candy series, as well as new tea series smoke oil and national tobacco series smoke oil. Some manufacturers have fully complied with EU regulations and closely followed European e-cigarette trends, developing the most popular flavors at any time to meet customer needs. In the first quarter of 2018, from the perspective of foreign markets, the most popular flavor of liquid was sweet/sweetened (36%), followed by fruit (32%), then iced mint (13%), and tobacco flavor (14%) targeting mainly old smokers, and finally the taste of various beverages (5%). In contrast, the tastes in the domestic market are relatively small and the experience is slightly worse.

From discussions during IECIE, we learned that many consumers have raised their own concerns. The first consumer concern is that the qualifications of most manufacturers are unclear, and product quality and after-sales service are not guaranteed. Second, national and industry standards are not put into place, and various additives and extracts are not certified and detected, causing obvious health risks. In particular, some manufacturers make liquids used in the domestic market significantly lower quality than that for the international market. Third, consumers believe that manufacturers generally exaggerate when promoting their products.

China Tobacco corporate’s booth was not seen at the show, even though China Tobacco Yunnan Industrial Co., Ltd., Shanghai Tobacco Co., Ltd., China Tobacco Hubei Industrial Co., Ltd., and China Tobacco Sichuan Industrial Co., Ltd. have rolled out mature e-cigarettes and heat-not-burn tobacco products. On April 6, 2018, cigarettes from China Tobacco (Sichuan) and Yunnan Tobacco International started to storm the Korean market. On April 16, Yunnan Tobacco International Co., Ltd. and South Korea’s IF Tobacco Co., Ltd. signed a distribution agreement in Kunming for a heat-not-burn product branded MC, marking that Yunnan Tobacco’s first batch of heat-not-burn products officially entering the Korean market. China Tobacco should take the initiative to participate in domestic and international exhibitions. Any product must meet with consumers and undergo market inspection. Going directly to the exhibition to listen to the opinions of consumers is also an opportunity for self-improvement.

According to the 2016-2022 Report on China E-Cigarette Market Analysis and Investment Prospects released by Bosi Data, in 2016 the market size of China’s e-cigarette industry was RMB720 million, an increase of 24.14% year-on-year from RMB580 million in 2015. Its growth rate outperformed other industries. With the advantages in electronics and foreign trade industry chain, Shenzhen now serves as a global gathering place for e-cigarettes. In 2016, global sales of e-cigarettes reached US$10 billion, in which about 90% of e-cigarettes were produced in China, and the output value of e-cigarettes in Shenzhen accounted for 90% of the country’s total output, meaning Shenzhen e-cigarettes accounted for more than 80% of the world’s output values. A staff said that Chinese consumers use e-cigarettes mainly for quitting smoking, which in foreign countries this is more a subculture. Vaping is for the sake of playing. Therefore, it is difficult to cultivate the domestic market. At present, the US represents the largest e-cigarette market.

In the UK, e-cigarettes have been fully recognized as a smoking cessation tool, becoming one of the fastest growing markets. In the US, although FDA has enhanced its supervision of vaping products, it also in effect acknowledged their harm reduction function. The popularity of heat-not-burn cigarettes in Japan and South Korea has expanded to the world. The global e-cigarette market has changed dramatically, providing a new round of growth opportunities for China’s e-cigarettes, especially the heat-not-burn cigarettes. As a regulatory agency for tobacco products, the State Tobacco Monopoly Administration should intensify its efforts to respond to the market for e-cigarettes and heat-not-burn tobacco products in terms of legal supervision, Chinese-style products, and safety criteria.