During the peak, according to IT orange data statistics, every 34 electronic cigarette brands around the world shared a foundry. Since March 22, my country has released the draft of electronic cigarettes, and it can be seen that in the entire industrial chain, manufacturers have been minimized by policies, and in the long run, manufacturers with core competitiveness are the future. Seed players who have won the market.
Source | Manager Media’s “Manager” magazine
■ Reporter of this magazine/Jiang Xin
In Shenzhen, the manufacturing industry that can occupy 90%of the world’s production capacity is not an electronic cigarette manufacturer, and it is also gathered on a street in Shajing.
This is not a secret. But if you study electronic cigarette manufacturers carefully, you will find a few very interesting places:
The first is that although my country is invented and the main production place for electronic cigarettes, so far, my country is not the main sales market of electronic cigarettes, but in other countries such as the United States, Japan, South Korea.
The second is that the size of the manufacturer is not large before the listing of Simo International (Simoore International Holdings Co., Ltd., 06969.HK), the world’s largest electronic atomizer manufacturer (Simoore International Holdings Co., Ltd., 06969.HK), mostly, mostly small and medium -sized enterprises.
Third, unlike other manufacturing foundries, since the birth of electronic cigarettes, manufacturers have always occupied a strong right to speak in the industrial chain, and most of them have their own brands. During the peak, according to statistics from IT orange data, every 34 electronic cigarette brands around the world share a foundry.
However, the influence of the public solicitation on the “Decision on the Implementation Regulations of the People’s Republic of China” (for the Draft for the Implementation of the Tobacco Monopoly Law “(referred to as the” Draft for Opinions “), which was publicly issued on March 22 this year, Obliactions may be affected.
Fourth, after the savage growth in the early stage, many people with existing e -cigarette companies have strong strengths from electronic manufacturing or purely transformed by the electronics industry.
First of all, starting with the electronic cigarette industry chain and the global market structure.
From the perspective of the structure of electronic cigarettes, the industrial chain of electronic cigarettes can be simply divided into upstream of raw materials and accessories suppliers. Midstreams composed of manufacturers and brands, and channel vendors (can be divided into online and offline, which can be divided into online and offline. However, due to the influence of new policies, online channels are directly banned) downstream. The entire industrial chain is not very long, which can also be explained from the side, why electronic cigarettes on the market update speed and market response speed like fast -moving consumer goods.
From the perspective of manufacturers, 90%of the production capacity has been concentrated in Shenzhen, my country. According to statistics from the Foresight Industry Research Institute, my country’s electronic cigarette companies can be divided into three echelons. As shown in the following page figures, the first echelon is by Huizhou Jiri Technology Co., Ltd. (referred to as “Jiri Technology”) and Shenzhen Mikel Co., Ltd. (referred to as “Mike Veor”), Shenzhen Avipus Technology Co., Ltd. (“Iveipus”), Shenzhen Zhuoeryue Electronic Technology Co., Ltd. (“Zhuoer Yue”), etc. ; The second echelon is represented by 8 companies including Shenzhen Purcer Electronic Technology Co., Ltd. (referred to as “Purcer”) and Shenzhen Aizhuo Electronic Technology Co., Ltd.; Five companies such as Co., Ltd. are represented.
It can also be seen from the figure on the right that almost all of the registered places for electronic cigarette companies are concentrated in Shenzhen. In this series of companies, many of them are foundries of internationally renowned electronic cigarette brands. For example, Mcwell’s predecessor is Simo International, and the shareholders behind it are also Simo International. Simo International has a unique family in the e -cigarette manufacturing market. Its customers cover the world’s leading tobacco companies and top -level tobacco companies and top -level tobacco companies and top -level tobacco companies such as NJOY and VUSE, MOTI, Romings Asia Pacific, RELX (Mist Core Technology), the United States NJOY and VUSE, MOTI. Independent electronic atomization company.
In addition, in the first echelon and the second echelon, there are also many manufacturers recognized for people in the circle. For example, Jiri Technology also planned to go public in the United States in 2014. It was claimed to be “the world’s largest electronic cigarette manufacturer and electronic cigarette solution provider”; ) Acquisition for 750 million yuan. So far, Jiri Technology is still a competitors that cannot be underestimated in electronic cigarette manufacturers. For example, the Kung Fu series HNB (heating and not burning) electronic cigarettes under the Sichuan Sichuan Sichuan Sichuan Tobacco Corporation of China is its foundry.
Most electronic cigarette manufacturers will launch their own brands, but the brand is weaker than the brand. From the “low -key” in the early days, to more and more manufacturers choose to go public. Why does this phenomenon cause this phenomenon? In fact, this is related to the market development trajectory of electronic cigarettes.
Earlier, because of the “Learning of the Car” and the positioning and supervision of electronic cigarettes in my country, most domestic electronic cigarette manufacturers were very low -key and cautious, but almost all of them will launch their own brands or export sales. Or sell directly on the domestic line. Since the e -cigarettes returned to the domestic market in the form of subculture in 2014, many domestic manufacturers such as Jiri Technology, Mcwell (retired), and Avipus (Shenzhen Avipus Technology Co., Ltd.; OC: 834285 ; Has been retired), five rounds of electronics (Shenzhen Five -wheel Electronic Co., Ltd.; OC: 833767), etc., and so on. On March 12 this year, the Shenzhen Securities Regulatory Bureau also released the latest counseling progress of Shenzhen Zhuolian Technology Co., Ltd. intending to list in A -share GEM.
Despite the Fengyun Society, the electronic cigarette manufacturers who move towards the capital market have their own ownership after a round of shuffling, but for nearly 17 years, the manufacturer still occupies a strong right to speak in the industrial chain.
The first reason is of course because manufacturers have the capacity of global electronic cigarettes. Why do so many investors prefer to set the factory in Shenzhen? Why don’t foreign brands invest in building a production line by themselves?
The first problem, the main reason is that Shenzhen has become the main position of the global electronics industry. It not only has complete industrial chain, but also a large number of practitioners in the electronic industry. The second problem is that foreign brands ultimately considers the final considerations of factors such as market, logistics, manpower costs, and efficiency. Wanbao Road once launched its own electronic cigarette brand and smashed tens of millions of automated production lines in the United States, but it was not enabled after completion. The reason is that after the production line is built, this product has been abandoned by the market.
It can be seen that the production capacity of global electronic cigarettes eventually converges in Shenzhen, which is actually the result of fine division of labor in the context of global economic development. The difference between electronic cigarettes and fast consumption products is that the key components of its atomizer/heater, smoke bomb and other core technologies are still in the manufacturer. Therefore, it has created the position of the manufacturer’s position in the entire industrial chain. Essence
Interestingly, when the electronic cigarette market is in the wind, many companies that transform or invest in more or less have the background of the electronics industry. Look at such a list:
In 2019, a person in the circle revealed the dominant supply chain manufacturer of JUul, the largest atomizer brand in the United States. He Shuo Union Technology Co., Ltd. (subsidiary of ASUS Group), Kunshan Huosheng Precision Machinery Co., Ltd. (FHS), Huimei Medical Device (Suzhou) Co., Ltd. Tengnectivity (Te Connectivity), Huizhou Weizhuang Technology Co., Ltd., Suzhou Zhuoqun Electromechanical Technology Co., Ltd., Shenzhen Mayor Yingying Precision Technology Co., Ltd. On this supply list, except for Huimei Medical, six other companies do not involve in the electronics industry without exception.
After a preliminary understanding of the entire electronic cigarette manufacturer in my country, let’s take a look at the impact of this solicitation draft.
Most of the electronic cigarette manufacturers are 2B companies, and although their own brands are their own, they are mainly exports. Therefore, in the short term, the release of the domestic solicitation draft this time has little impact on the existing business of the manufacturer. Taking Simo International as an example, RLX is the fastest in its existing customer structure and is the largest customer in the domestic market, but it is not a major customer. In 2019, RLX accounts for 12% Left and right, 20%in 2020. And RLX has obtained the qualifications of electronic cigarette permits, and the impact of the policy on Simoore International is even smaller.
The main set of frustration is mainly to produce some manufacturers who sell domestic sales in China and even provide foundry in domestic sales. After all, under the strict management of the policy, the brand and online channel vendors are affected to the greatest, and the impact may be transmitted to the manufacturer of cooperation, such as urging the payment to the brand. In the manufacturer’s own production scale and capital strength. Under this pressure conduction, some manufacturers will definitely leave the field in advance.
In the long run, the release of the comments draft is good for electronic cigarette manufacturers. As early as November 1, 2019, the State Tobacco Monopoly Bureau and the State Administration of Market Supervision and Administration issued the “Notice on the Prohibition of Selling Electronic Cigarettes to Minors” clearly stated that electronic cigarettes “supplemented by traditional tobacco products such as cigarettes”, this First of all, the legal identity is determined; the release of the discussion draft is actually based on this, further establishing the supervision method of electronic cigarettes to end the disorderly management status brought about by the vague positioning of their electronic products, cigarette products, drugs, etc. Essence However, the final regulatory party is the Ministry of Industry and Information Technology or the tobacco monopoly bureau, and it is finalized by the policy. From the perspective of policy supervision, this can promote the healthy and orderly development of the entire domestic electronic cigarette market, and manufacturers can benefit from it.
Why is it a long -term benefit for the manufacturer?
Soliciting comments stated that the electronic cigarette must “refer to the cigarette regulations”, and in accordance with the logic of strong supervision of the cigarette market in my country, from raw materials such as upstream nicotine, flavors and other raw materials to downstream channels, etc. It will also be subject to similar strong supervision. For the manufacturer, its core technology is concentrated in the atomizer/heater, smoke bomb and other links. The main energy is also focused on technological innovation and research and development. The biggest impact of policies on its production is whether production is compliant, or will introduce specific industry standards for key components. If you cannot obtain legal qualifications or your technology does not meet the industry standards, electronic cigarette manufacturers will indeed face a large wave of shuffling. This is definitely a good thing for manufacturers who are devoted to research and development.
In addition, the key to the development of manufacturers in the future is that one is to be able to bind a qualified brander; the other is to strive for their own brands to apply for qualifications and have more rights to speak. In this way, they can develop the Chinese market. As a new incremental market.
If you can’t apply for qualifications by yourself, in the domestic market, you can only cooperate with Zhongyan or qualified brand vendors. Will this change their previous discourse status in the industrial chain? Perhaps this is the main problem of the future domestic market changes under the policy stick.