Fueling Finance ( ID: rancaijing) original
Author | Dawn
Edit | Wei Jia
A major earthquake triggered by the regulatory stance is spreading rapidly in the e-cigarette industry.
On the afternoon of November 1, the State Administration of Markets and the State Tobacco Monopoly Bureau jointly issued a notice stating that minors should be prevented from purchasing and smoking e-cigars through the Internet to further protect minors from e-cigarettes.
The specific implementation of three points: First, clean up the online e-cigarette sales platform, second, the online e-smoking products are banned, and the third is to ban Internet e-cigarette advertising. All in all, it is to completely ban e-cigarettes online.
Subsequently, the relevant person in charge of the State Tobacco Monopoly Bureau made a clear statement in an interview with Xinhua News Agency, and will take more stringent measures to clean up and rectify the Internet e-commerce platform, e-cigarette enterprise marketing website and e-cigarette shop, and crack down on illegal and illegal regulations. The act of selling electronic cigarettes.
The e-cigarette industry has always been in a “three-stateless” without supervision, production standards, and no safety certification. At the beginning of 2019, e-cigarettes became the ventricle, and all the way was controversial and blind. The industry’s eagerly e-smoking national standards have not been introduced in October this year. This notice is at the policy regulatory level since 2019.The most important one that ushered in.
Online sales are banned and will undoubtedly have a huge impact on the e-cigarette industry.
The announcement has caused the e-cigarette industry to explode, and e-cigarette companies have expressed their support. Yueteng’s first public release stated that it would terminate all sales and advertising on the Internet. In the next three hours, a number of e-cigarette brands such as Bode, Fulu, Magic Flute and Whale Light Smoke expressed their determination and agreed to support it.
A person close to the National Tobacco Bureau told the Finance Department that this announcement was only a “preheating” and aimed at the e-commerce channel of e-cigarettes. A larger and more detailed regulation will be introduced soon.
Where does the wind blow?
To some extent, this announcement is a ratification of last year’s policy.
On August 28, 2018, the State Administration of Markets and the State Tobacco Monopoly Bureau issued the Notice on Prohibiting the Sale of Electronic Cigarettes to Minors. At that time, the policy was introduced because stationery stores near primary and secondary schools in some areas sold e-cigarettes to students, and some e-commerce platforms also had so-called “student e-cigarettes”. The announcement emphasizes the prohibition of direct promotion and sale of electronic cigarettes to minors.
But one year has passed. According to the new circular, “There are still minors who know, buy and smoke e-cigarettes through the Internet. Even e-cigarette companies are blindly pursuing economic interests and publicize, promote and sell through the Internet. E-cigarettes.” Obviously, compared to the last general appeal, this time directly targeted the target of the Internet platform.
Therefore, three rules for the Internet have emerged:
We urge e-cigarette production and sales companies or individuals to close e-cigarette Internet sales websites or clients in a timely manner;
We urge e-commerce platform to close e-cigarette stores in time and remove e-cigarette products in time;
We urge e-cigarette production and sales companies or individuals to withdraw e-cigarette advertisements posted via the Internet.
These three rules are all online channels that point to e-cigarettes. In other words, the sales and marketing of e-cigarette brands on the Internet platform will be banned.
For the e-cigarette industry, this is a subtle time node. First, the national standard for electronic cigarettes is brewing, and the second is on the eve of the e-commerce double eleventh war.
Before, although the industry has heard the sound of e-cigarettes every three times, it is more criticized at the macro level, and there are no specific regulatory measures. Whether it is the CCTV 315 name in March this year, or the statement of the National Health and Health Commission in July this year, they are only commenting on the hazards of e-cigarettes and stressing the need to strengthen supervision.
Graphic / Visual China
The “National Standard of the People’s Republic of China – Electronic Cigarette” document, which is considered to have the meaning of a permit, was originally planned for October this year. But until today, the national standard is still under review.
However, in September, US President Trump called on the FDA (US Food and Drug Administration) to ban all non-tobacco-flavored e-cigarettes to avoid youth use. The directive directly points to the US e-cigarette player juul, the $38 billion e-cigarette startup that faces the biggest accusation of tempting teenagers to smoke.
Many people in the industry told the Finance and Economics that the negative news transmitted by the United States delayed the introduction of the national standard to a certain extent, and also promoted the appearance of this notice.
The e-cigarette entrepreneurs believe that behind the policy, the elimination of the use of minors is one side, and the intricate interest linkages of the tobacco industry is another. Even China Tobacco, which pays one trillion yuan a year, can only be sold online. However, e-cigarettes have put sales channels online, which is in addition to avoiding the purchase of minors and is still rushing with traditional tobacco.
Is the e-cigarette cool?
After the announcement, the e-cigarette industry suddenly became a hit.
Before the press release,At present, most of the mainstream electronic cigarette brands in the market have already publicly expressed their attitudes, and the caliber is surprisingly consistent.
“Full cooperation”, “Resolute support”, and “Resolute execution” are high-frequency vocabulary in various brand statements. Most brands stand at the height of industry and social development and express strict self-discipline to protect minors. Some brands also said in the statement that they are “very happy” and “happy”.
Interestingly, in the first few hours of the announcement, Luo Yonghao also posted a new platform for Xiaoye’s upcoming launch on Weibo, and posted a link to the double eleven pre-sales page.
After the announcement, the official website of Yuezheng could not be opened. In response to the enthusiasm, the company said that the website is being adjusted according to the new regulations, the new rules are strictly enforced, and the page linking e-commerce is revoked. Subsequently, Yuezheng official website has returned to normal.
But the major e-commerce platforms reacted differently. At present, Suning and Gome’s e-commerce platform has not searched for e-cigarette products, but as of 7 o’clock this morning, Tmall and JD.com can still browse and purchase.
Search e-cigarettes on some e-commerce platforms
A practitioner has questioned the legal effect of the notice. Some people believe that the notice has the following doubts: First, the issuer is suspicious. This is not a document of the State Council or the Ministry of Industry and Information Technology. Second, the statement uses “urging” instead of “prohibiting according to law”. Third, there is no punishment, lacking. Specific law enforcement basis.
In this regard, Li Changqing, a senior partner of Beijing Longan Law Firm, told Combustion Finance that this notice belongs to “departmental normative documents”. The names of normative documents are generally called methods, regulations, decisions, rules, notices, etc. Although its effectiveness cannot be completely equivalent to administrative regulations, as long as it does not contradict the provisions of the upper-level law, its effectiveness should be higher than locality.Regulations and regulations are legally binding.
However, Li Changqing also believes that since the notices are mostly declarations or call-to-action clauses, there are no specific normative measures and punishment methods, and the actual implementation effect is still questionable, which means that the current notices are more of a policy. Guidance and warning.
Zhang Jianshu, president of the Beijing Association for Controlling Smoking, told the Finance and Economics that last year’s notice was not implemented. Specific rules should be required to rise to the level of legislation, at least departmental regulations, and penalties.
Many e-cigarette entrepreneurs said that in any case, the online channel that banned e-cigarettes would have a certain impact on the e-cigarette industry. Although there are no specific rules to be introduced at present, it will inevitably lead to a chain reaction of policies. As for whether to close the flagship store in Tmall and Jingdong, they said that they are still waiting to see the notice.
“The direct impact on the industry is small, but it will affect the psychology of consumers, and those who are willing to take the risk to try e-cigarettes will decrease,” said an e-cigarette brand founder.
The upcoming double eleven, this will be the first concentrated battle of the electronic cigarette industry. Some e-cigarette brands have said that the relevant person in charge of Taobao has come over more than a month ago, and informed him of the relevant policies of this year’s double eleven in order to prioritize the delivery.
The brush list is a common phenomenon in the electronic cigarette industry. Some e-cigarette entrepreneurs have revealed that the current e-cigarette industry, the e-commerce brush list is “daily operation”, a real order, will be matched with two fake orders. Prior to 618, there was a large amount of brushing behavior.
But according to the current situation, this year’s double eleven electronic cigarettes are not only the sales of e-commerce platforms, but even the single industry chain, they are “completely cool.”
Where is the electronic cigarette?
Online channels will be banned. Where will the domestic e-cigarette industry go?
An industry insider said that the state’s control over the electronic cigarette channel is inevitable, and this announcement is only a warm-up. “E-commerce is not allowed to sell. It is expected that the end of November to mid-December will be published. In addition, convenience stores and tobacco stores cannot sell e-cigarettes.”
Another statement is that the future tobacco bureau will increase control over nicotine and control the uniform production, circulation and production of nicotine through a licensing system.
In any case, the future control of the domestic e-cigarette industry is inevitable. From the current point of view, if the online channel is banned, then the offline channel and the sea will beIt is important.
Jiang Mengyu, an analyst at Tianfeng Securities Research Institute, believes that the e-cigarette industry currently accounts for 1/4 of the online market. For hundreds of domestic brands, the online future can only consider selling nicotine-free products. The Tobacco Bureau issued approvals for e-cigarette supervision and tobaccoification. The high probability is regulated by China Tobacco and the competition under the offline channels is more intense.
In fact, the offline channel has always been the focus of the major e-cigarette brands.
In the past, tobacco was forbidden to be sold online. The user’s e-cigarette purchase habits were not developed. In addition, the e-commerce platform’s traffic price was expensive, which made the e-cigarette companies focus on offline channels.
The e-cigarette brand has already played a channel war online. Through agency distribution, with the help of large FMCG channels, e-cigarette brands have laid the product to the offline scene where smokers appear more frequently. Nightclubs, bars, supermarkets, convenience stores and other places are all offline channels that are well sold.
Graphic / Visual China
The e-cigarette store that has been popular since the first half of this year is the channel layout that various brands are currently implementing. Due to the low cost of joining the opening business, the ability to experience on-site and the after-sales service, the store has become a trend. It is the practice of the electronic cigarette industry to provide subsidies for the opening of exclusive stores. E-cigarette brands are using time to change space, grab money to grab the market, and go to the head of the industry to gain policy tilt.
For e-cigarette brands with deep online distribution and store resources, the current policy will not have much impact on them, but it will easily form an advantage in the competition. “This turned over to be the owner, and the store is smashed.” A provincial agent of an e-cigarette brand said.
In addition, The e-cigarette brand that has the advantage of going abroad has limited impact.
Before the rise of this wave of e-cigarettes, the domestic e-cigar industry is dominated by OEM exports. According to statistics, 95% of the world’s electronic cigarettes are produced in Shenzhen, China. The industrial chain of domestic e-cigarette production and export is very mature. If the market is turned overseas, it is another way out. It is reported that Yue carved in last yearIn the second half of the year, the company began to enter the sea, and its products have entered 43 countries around the world, accounting for 23% of overseas revenue.
For some e-cigarette brands, this announcement is an industry earthquake, but for the domestic e-cigar industry, this may be just the beginning.