No matter how perfect the model is, it still needs to be in awe.
Editor’s note: This article is from WeChat public account “ Geek Park ” ( ID: geekpark), author Jingyu.
No matter how perfect the mode is, it still needs to be in awe.
Guo Fan realized that the tens of thousands of yuan in deposits paid last year were “no hope.”
In 2019, when he started to represent a newly-branded e-cigarette, and opened 5 offline e-cigarette stores in one city in Shandong, Guo Fan thought that he was “stepping into the air.” But less than half a year later, the situation has changed drastically, and manufacturers’ supply has been slower and slower. There was no news about the security deposits that were pressed on the brand for the purchase of electronic cigarette vending machines.
Before the media revealed that the e-cigarette company had been suspended for two months, the capital chain was tight, and large-scale layoffs, bad news spread among the agent group from around the Spring Festival. Guo Fan said that two months before the New Year, the brand had promised that he would settle the payment before the year. But he did not wait to settle the bill. Later on, “the chief financial officer’s phone number couldn’t be reached.”
The network embargo in November 2019 and the epidemic in 2020 have hit the industry twice in a short time. Not only the brands mentioned above, according to media reports, due to various problems, another e-cigarette brand has laid off 50% of its employees since November.
The chain reaction brought by the epidemic situation is acting on the entire industry chain. Although offline e-cigarette stores have worked hard to circle old users into “friend circles,” because people are closed at home, sales performance will not look good. An e-cigarette brand’s offline store staff told reporters that due to the closed park, there was little business.
If you push the time back one year ago, the emerging industry of e-cigarettes, which was born less than two years ago, is still a hot venture in China. Almost overnight, those who made mobile phones, printers, and even public accounts all joined the wave of e-cigarette entrepreneurial gold rushes.
Instead of tobacco, 350 million “smokers” are potential people; one-time investment, once they have hit the market, they can use cigarette bombs to repurchase and steadily obtain high profits. Such a near-perfect business model attracts people. Equally crazy is the investment agency, which hits hundreds of millions of yuan on the electronic cigarette track within two years.
In just one year, the e-cigarette fell from the air vent and approached the turning point. Perhaps a simple outbreak of pneumonia cannot sum up all the changes in the industry.
Gold rush e-cigarette
In 1849, when the Saudi mill in California discovered gold, within a year, 300,000 people flocked from the U.S. states to the California valley to find their “American dream.”
Compared with California ’s “Gold Rush” two hundred years agoSimilarly, in 2019, e-cigarettes have become a new outlet in people’s eyes. The American e-cigarette company Juul received a huge investment from tobacco giant Altria Group two years after its start-up, and its valuation reached a staggering $ 38 billion.
For a while, everyone wanted to be Juul in China. Hammer Technology’s designer Zhu Xiaomu founded “Fu Lu”, “Uncle Tong” Cai Yuedong founded “Grapefruit”, Hammer Technology Peng Jinzhou founded “Ono”. E-cigarettes have become a new outlet for serial entrepreneurs on the Internet, and the “hundred tobacco war” has been launched in China. There are also various venture capital agencies moving in the wind, and hundreds of millions of yuan of investment have entered the electronic cigarette industry.
Many e-cigarette practitioners who have been engaged for many years are surprised by everyone’s sudden enthusiasm, because e-cigarettes themselves are a very small market. Although 90% of the global e-cigarettes are produced in China, most of them are exported to overseas markets, and not many of them remain in China. At the same time, most domestic consumers’ understanding of e-cigarettes still rests on “ruyan” 20 years ago.
The wind is coming and everything in the industry is accelerating. Because Shenzhen has a full-chain factory for e-cigarettes, new e-cigarette companies, companies and brands that have just entered the bureau will directly find foundries for OEM production and will start selling online after shipment. In the second half of 2018, it was once rumored that 5 million can build a complete set of e-cigarette companies from brand to supply chain. If properly marketed, monthly profits can reach 10 million, which seems to be a good business that is stable and profitable.
Due to the similarities in the supply chain, e-cigarette entrepreneurs with their own “Internet genes” have been focusing on brand promotion from the beginning. In order to attract attention, e-cigarette companies will not only invite celebrities to endorse, they will also promote copywriting. The superscript new innovation highlights the “harmless” and even “healthy” elements and confuses the concept of “quit smoking”. At the same time, colored cigarette rods and fruit-flavored smoke bombs have also greatly attracted minors, and this has also hidden dangers for the high-pressure countermeasures that will be supervised later.
For many years, e-cigarette practitioners often call themselves “bulking and making money.” Although e-cigarettes essentially use e-liquid, they have a competitive relationship with the tobacco industry due to the characteristics of the nicotine salt generated in them. However, due to the influx of entrepreneurs and the entry of capital, the low-key e-cigarette suddenly became a hot spot, and it was unavoidably noticed by the national regulators. Early e-cigarette practitioners believed that it was the high-profile and radical nature of these “newcomers” that eventually led to the supervision of “boots”.
In the March 15th party in 2019, e-cigarettes were “on the list” and became the object of criticism by name. At the end of October, the state also introduced regulations that completely ban e-cigarettes from being sold on the Internet, directly blocking the most profitable channels in the e-cigarette industry.
According to the previous practitioners’ views, if there is no wave of entrepreneurship of electronic cigarettes, the industry will develop slowly, but it will slowly cultivate users, conduct compliance, and become more complete.
However, the bee