China banned the sale of flavoured vapes in a broad crackdown against the industry. E-cigarettes were sold mostly online in China before, where the governments regulations on the products are still weak. This seems to be all the more crucial now that China has banned all online sales of electronic cigarette devices, forcing domestic manufacturers to comb through exports, and to pursue foreign distributor even more aggressively than they did before.
Last November, Chinese laws were amended to put the vaping industry under the purview of the state-run State Tobacco Monopoly Administration (STMA), which regulates Chinese tobacco products, and is literally housed in the same building as the Chinese National Tobacco Corp., the largest cigarette maker in the world.
The ban came in response to concerns over vaping by minors in China, and is likely to severely impact the Chinese domestic vaping market, which has been growing fast. The country may also choose to strictly police any e-cigarette markets, just like the traditional tobacco industry, leaving few opportunities for outside players -- currently, the sale of tobacco products in China is mostly controlled by the government-run monopoly.
Local administrative units within the STMA will be tasked with inspecting vapor manufacturers in their areas, according to the China Briefing, and will carry out technical reviews on products made by these companies. Delving further into the market, the reporters learned that Shenzhen airport had recently said that it had worked with related parties, like the electronic cigarettes professional committee at Chinas electronic commerce chamber, to co-research and publish a whitelist of e-cigarette products, as a response to the air transport chokepoints of domestic electronic cigarettes.
China, especially Shenzhen, is a production center for the majority of electronic cigarettes and related products in the global market, as well as a headquarters for a number of companies that are well-known on the international markets.
As is the case for most other Chinese vaping brands, the U.S. market plays a dominant role. In terms of consumption, North American electronic sales amounted to about $5 billion in 2017, 36% of the world total; western European vaping consumption was 30% of the global total, the worlds second largest; and regional Chinese shares were smaller, about 5%. According to a Blue Book on Exports in 2022 for the Electronic Cigarette Industry, Chinese exports of e-cigarettes are expected to hit CNY 180 billion in 2022, an 30 percent increase from a year ago.
There is no doubt that Chinese e-cigarette manufacturers will take advantage of the industrial chain to actively expand overseas markets.