‘It's mostly for the fruit flavor. If it's gone, we could lose 70 to 80 percent of our customers.' Mr. Ding, an e-cigarette shop owner in Qingdao, told Yere financial reporters that his e-cigarette business is encountering unprecedented pressure.

On October 1, the Mandatory National Standards for Electronic Cigarettes (hereinafter referred to as "National Standards") were officially implemented. The "National Standard" states that "electronic smoke compounds should not be induced by minors, and should not make the characteristics of the product flavor other than tobacco flavor. That means fruit-flavored e-cigarettes are completely banned.

Is the e-cigarette business Dying?

Without the handler, business is bleak

The reporter found in many e-cigarette sales stores in Qingdao that there were only five or six kinds of products placed in the counter, and only two or three kinds of tobacco flavors in line with the new national standard were available for selection from a single brand. Before the display of a wide variety of fruits, e-cigarette shells have been all removed from the shelves.

Reporters noted that in line with the new national standard products also changed before. Take Yue Kern as an example, a Yue Kern e-cigarette store manager in Qingdao told reporters that the smoke rod, the launch of the national standard product phantom "Xinghe dream" atomization rod, smoke bomb, launched the phantom "forget river trail mountain roast 25" and phantom "forest Renaissance mountain roast 53" atomization bomb.

According to the sales staff, GB products in the appearance of in addition to printed "dissuade teenagers from smoking electronic cigarettes ban primary and secondary school students to smoke electronic cigarettes" "the company hints that smoking electronic cigarettes harmful to health do not smoke electronic cigarettes in non-smoking places" and other several rows of words, smoke rod also added a child lock function. In addition to the new warning, the main change is a reduction in the nicotine content to 2%, compared with 3% to 5% in the fruit-flavored version.

Mr. Gu, an e-cigarette enthusiast, told reporters that he found that the taste of the national standard products did not change much after he tried them. However, some consumers said that they only like the original fruit taste, but can not accept the tobacco taste, "after the stock of fruit-flavored cigarettes in advance of smoking, I may really quit smoking." Smoking electronic cigarettes for nearly 2 years, Mr. Wei told reporters.

In an e-cigarette store near Nanjing Road in Qingdao, the owner, Mr. Ding, introduced that after the implementation of the new national standard, the e-cigarettes in the store changed from purchasing from brand parties to purchasing through the national unified e-cigarette trading management platform, and the e-cigarette brands sold should not be less than 3, the sales volume has decreased significantly.

"More than 80 percent of the customers in the neighborhood mainly buy fruit-flavored e-cigarettes. "In October, only tobacco-flavored e-cigarettes were available, but the number of customers who came to our stores dropped sharply." As for future sales, Mr Ding admits he will wait and see for three months.

However, some e-cigarette store practitioners told reporters that they are still optimistic about the later market of e-cigarettes. "Although the current sales volume is not as good as before, according to the future trend, it should still pick up some." "Said one shopkeeper.

Only 43 companies get e-cigarette 'birth permit'

As of October 1, the "national standard" will be implemented together with the "e-cigarette management Measures". According to the regulation, shopkeepers like Ding are required to sell e-cigarettes from brands to a unified national e-cigarette trading management platform, and to sell no fewer than three e-cigarette brands.

Industry insiders believe that the implementation of compulsory national standards for e-cigarettes means the end of the long period of production without national standards for e-cigarettes in China, which is of groundbreaking historical significance for the industry. E-cigarette products produced in accordance with national standards can be sold and circulated on the national transaction management platform, and e-cigarette factories and small workshops will be officially separated. This link will greatly change the previous series of goods, disorderly prices, fake goods rampant situation, before the e-cigarette provincial generation, municipal generation, micro business warehouse officially quit the stage of history.

At the production end, the speed of "obtaining licenses" is also accelerating. The data compiled by blue Hole of e-cigarette new media show that up to now, 43 e-cigarette brands have passed the technical review of compulsory national standards for e-cigarettes. Among them, 58 cigarette sets and 135 cigarette bombs were involved.

This means that at least 80% of e-cigarette brands will leave the e-cigarette market. According to reporters, in 2019, the peak year of e-cigarette development, China's e-cigarette market achieved sales of $1.61 billion. There are 907 e-cigarette manufacturers in China, of which 85.7% are located in Shenzhen, and 86, 72%, are located in Shenzhen.

According to statistics, the most examined GB smoke brand: snow and 6 ranked first, Yue Engraved 4 ranked second. In addition, pomelo, Magic Flute, Platinum, VAZO, MR Fan Rui, Ben fog and YPEN, all of which are 2 styles, and the other brands are 1 style.

The brands with the most tested national standard smoke bombs: 12 models of Yuetke ranked first, 8 models of Xuejia and Platinum tied for second, 7 models of Magic Flute ranked third, 6 models of pomelo and Mii tied for fourth, and 5 models of VAZO, MR Fanrui, Xiangyu, YPEN and Xiaoqing were tied for fifth.

It's worth noting that getting a license may just be a fresh start. The new national standards on product taste, additives, design restrictions are more clear and strict, resulting in reduced differences between products. Among the homogenous products, how to stand out becomes the core problem that e-cigarette enterprises will face next.

Answer the same question, the industry meets the life and death test

In the same question, which e-cigarette companies still have a chance?

Galaxy Securities research report believes that policies to raise the threshold of e-cigarettes, the industry will focus on the head. The policy directly stipulates the parameters and standards of e-cigarette products, increases the difficulty of product research and development and production, and eliminates backward enterprises; On the other hand, the policy limits the use experience of e-cigarettes to a certain extent by means of taste, nicotine content and release amount. However, how to improve the user experience as much as possible under the restrictions of policy standards depends on whether the enterprise has enough R&D technical strength.

According to Blue Hole estimates, in the next year, there may be a large number of licensed brands will voluntarily exit the domestic market. In other words, the industry will be concentrated at the top while the backward enterprises are eliminated.

According to Blue Hole's ongoing September survey, Yuecker topped the list with 99% of respondents, meaning that 99% of licensed stores choose Yuecker when stocking their shelves. Pomelo ranked second with 62% and magic flute ranked third with 60%. Xueja, Lemi, Ben Fog and Mirox ranked fourth to seventh; Other brands accounted for only 10%, ranking eighth.

It is generally believed by the industry insiders that brands with high popularity, strong R&D strength, sufficient capital reserves and superior comprehensive strength will stay in the market and maintain certain market competition, but will further concentrate on the top 3 to 5 national brands, and some brands may enter the region and become local brands.

On the retail side, the remaining two months of the year will be a make-or-break period for shopkeepers.

On the one hand, the fruit-flavored products and national standard tobacco products stored by users will be consumed in parallel for a period of time, which may lead to a cliff decline in shop operation. A number of shops with high rent and weak tobacco sales capacity may be forced to quit. On the other hand, judging from the first batch of national standard tobacco taste feedback, users still need to accept for a period of time. It is expected that the national standard review may be gradually relaxed in the scope of 101 whitelist additives in the future, and the experience of users will be further improved.

"We have rent until the end of the year, and look at the sales in the three months. If it doesn't go well, we won't renew it at the end of the year." Mr. Ding told reporters.