In-Depth Analysis of the Vaping Industry’s Current State and Future Pain Points

An in-depth analysis of the current state and future pain points of the vaping industry aims to assist practitioners. The e-cigarette industry, which has existed for 20 years, suddenly became the first hot spot in 2019. Since last year, well-known investment institutions such as IDG, Source Code, and Zhenge have all placed their bets, and internet figures like Cai Yuedong, the founder of the original Tongdao Dashi, and Zhu Xiaomu, an employee of Smartisan, have also joined the fray. High margins and low entry barriers have excited both newcomers and onlookers, as one can start making money by simply finding an e-cigarette manufacturer for OEM.

However, while entrepreneurs are frantically acquiring users, engaging in viral marketing, and expanding channels, they are also beginning to realize that, under the uncertain policy environment, tightening market regulations, and the challenges of a capital winter, it is not easy to carve out a place in the e-cigarette industry.

On March 7, the ammo e-cigarette industry forum kicked off in Beijing, gathering over 200 representatives from investment institutions and startups to discuss the industry's "crisis" and "opportunity." Among them, five guests delivered keynote speeches, sharing their thoughts and outlook on the industry. At the ammo e-cigarette industry forum, Li Xiang delivered a speech titled "Current Product Pain Points in the E-cigarette Industry."

He believes there are four major pain points in the e-cigarette industry today.

First, there is oil leakage, which occurs in two ways: condensation liquid entering the mouth and e-liquid seeping from the oil chamber;

Second, the burnt coil is a persistent issue that cannot be changed with the current ceramic atomizer structure;

Third, unrestrained vaping leads to more pod sales but seriously deviates from the values of promoting e-cigarettes;

Fourth, product homogenization and severe plagiarism.

Below are Li Xiang's remarks, organized by ammo:

We entered this industry in 2015. When we first entered, the supply chain for small devices was still very immature, but we believed that the future would be a market for small devices, so we sought out OEM factories. However, at that time, most factories were making large devices, and very few were making small ones, so we had to develop and produce them ourselves, encountering various problems along the way.

Based on these issues and some of our later solutions, I would like to share with you.

Currently, there are still many product pain points in the e-cigarette industry. The biggest problem is oil leakage. There are two types of oil leakage: one occurs when condensation liquid remains in the central tube during atomization, accumulating over time and easily entering the mouth. The other is seepage from the oil chamber, as the pod needs to intake oil, intake air, and expel air all in one place, and the glycerin component in the e-liquid is hygroscopic, making this issue difficult to resolve.

Some products have the highest after-sales costs concentrated on oil leakage. Currently, due to oil leakage, 3 out of 10 pods on the market have after-sales issues.

Our solution is to directly lock the e-liquid at the top; consumers only need to pull a string for the oil to flow down and contact the atomizer, thus reducing many transportation and storage issues. This design can keep oil leakage under 3%.

Another issue is burnt coils. Any pod using a ceramic coil will generally have this problem. Currently, most pods have a capacity of two milliliters, and after using two-thirds, the remaining liquid usually has a burnt taste.

The structure of the ceramic coil consists of many irregular holes, some large and some small. The small holes retain less oil when locked. When it starts working, the natural extracts turn into carbon in the small holes, and the longer you vape, the more carbon accumulates, leading to a burnt taste.

We found that burnt coils are a persistent issue with ceramic atomizer structures. Therefore, we now use cotton coils directly. Additionally, to prevent burnt taste after using two-thirds of the pod, we reduced the e-liquid amount to 1.35 ml, so it won’t burn.

Another pain point is unrestrained vaping. Nicotine addiction can be psychological or physiological. The nicotine content in traditional cigarettes is fixed; generally, after about 10 puffs, the half-life is about 1-2 hours, and the metabolite cotinine remains in the body for about 5 hours before being excreted.

Although unrestrained vaping can lead to more pod sales, it seriously deviates from our values of promoting e-cigarettes. The Nine Puffs team has conducted extensive research and experiments and concluded that taking nine puffs of vapor can achieve a good state both physiologically and psychologically. Thus, the Nine Puffs team developed a vaporizer with an intelligent reminder function. #p#分页标题#e#

Another issue is homogenization. The e-cigarette industry is characterized by low entry barriers and high growth. How low can it go? This afternoon, I registered a brand, went to a factory to stick a label, and I could start promoting it tomorrow. Therefore, you will see that many of the best-selling brands on the market look very similar; if you remove the logo, you can’t tell who is who.

Currently, everyone is competing in marketing promotion and channel building; in the future, the competition will be about product experience, flavor retention, and brand tone. Today's young people pursue individuality and upgrade their consumption. Good products have a unique temperament, which is sustainable. If a brand is merely a copycat, it won’t last long and won’t attract the target audience. Many products on the market currently exhibit plagiarism.

I hope that practitioners in the e-cigarette industry can reflect on their market positioning: are you selling products or building a brand? E-cigarette manufacturers looking to build their own brand need to carefully consider their resources, as building an e-cigarette brand is not an overnight task.