JUUL Partners with JD.com, Plans $100 Million Push into China

According to people close to the information, JUUL had begun to conduct research on the China market as early as 2016. However, since domestic small cigarettes had not yet formed an industry at that time, plans to enter China were put on hold.Around June 2019, JUUL reached a cooperation with Bain Consulting, which was responsible for JUUL's initial team building, corporate planning, talent recruitment and supply chain implementation in China. In addition to the China market, Bain is also responsible for JUUL's overseas business in other regions.

In the early days of cooperation, JUUL had contact with many domestic leading e-commerce companies, and Jingdong was the first e-commerce platform to reach cooperation with it.

In addition, JUUL is reaching out to talents in the e-cigarette supply chain through multiple channels, hoping to build a localized and own supply chain in China.Sources revealed that JUUL had previously had a foundry in the Wujiang area of Suzhou, but considering the future demand of the domestic market, it may seek a new location in Suzhou to expand production scale.
 

It is worth mentioning that in terms of team building in China, JUUL has contacted executives of many well-known domestic companies, including Wang Huinan, founder of maternal and infant e-commerce Baby Tree. Baby Tree responded after the news was exposed that the founder has no plans to work in any other company.

Wang Huinan has not confirmed joining JUUL for the time being, but will fly to JUUL's headquarters in the United States for negotiations within the month.

Why did JUUL choose to sail to China at this time?

Compared with 2016, China's consumption of small cigarettes has been ripened, and JUUL, which has been besieged by the US government, also needs to accelerate its entry into the China market to ensure its own growth.

JUUL e-cigarettes are mainly used as replacements for cigarettes, hoping to bring smokers a new nicotine intake experience. However, in the later period, they gradually became a cool standard for many young people. Therefore, JUUL came under pressure from various aspects of public opinion. Later, JUUL closed its social media accounts and stopped selling flavored e-cigarettes in stores, but obviously the market did not buy it.
 

The San Francisco City Regulatory Commission recently passed a regulation stating that no e-cigarette products can be sold or distributed in San Francisco without passing the review of the U.S. Food and Drug Administration (FDA). This regulation will take effect in early 2020, and the headquarters in San Francisco JUUL has naturally been pushed to the forefront.

JUUL had expected brand sales to exceed US$3.4 billion in 2019, which is about three times that of 2018, so going to sea will become an important way to achieve its goal.

In July 2018, JUUL officially entered the UK, which was also the largest e-cigarette outside the United States at that time. At that time, Bain Consulting provided a number of on-site services for it.In addition, since the British market has different requirements for the nicotine concentration of tobacco oil from the United States, JUUL has adjusted the product formula for this purpose, but the core promotion point is still to replace cigarettes.In June, JUUL announced plans to put products on shelves in 1300 McColl stores, which will increase its number of retail stores in the UK to 7000.