Two Oddballs in the E-cigarette World Worth Remembering

The most challenging aspect of creating an e-cigarette brand is coming up with a name
 
Since 2018, the e-cigarette industry has exploded, with various brands emerging almost daily.

This is a positive development, indicating that the industry is growing and attracting many entrepreneurs.

I once fantasized that even if all these people failed, the employees of these companies would become the most loyal promoters of e-cigarettes, eventually spreading across the country like seeds, contributing to the popularization of e-cigarettes in China. This could be considered one of the most hardcore advertisements in modern history.

What surprises me is that despite the multitude of new brands, they all seem to share a remarkably uniform style.

A 300 yuan image photo

Registering a company for 2000 yuan

Publishing an article on Baidu Baijiahao, often titled "XX e-cigarette secures XX million in funding"

And just like that, a brand is established.

Brands like Xihu, Snow加, Xiaoye, Cigar, Xike, Qinglan, Meike...

The Chinese language is so complex that "the most challenging aspect of creating an e-cigarette brand is coming up with a name."

This surreal reality reminds me of the craziness of micro-businesses from a few years ago.

History serves as a mirror, revealing the rise and fall of brands.

These emerging brands have precedents to learn from, namely Shanlan and YOOZ.

When Shanlan e-cigarettes were launched, they garnered significant attention in the industry. They were also among the first to popularize the trend of having "founders as IP" in the e-cigarette sector.

Shanlan in the e-cigarette world is akin to Smartisan in the smartphone industry. It is a company that clearly suffers from "design overcapacity." However, after extensive promotion, Shanlan seems to have lost its former glory. Both e-commerce and offline sales have been criticized by peers as "too small."

YOOZ was once in the spotlight, purchasing the most advertising at the international e-cigarette exhibition in Shenzhen in April, showcasing its extravagance. The strategy of having a star founder worked better for YOOZ than for Shanlan.

However, YOOZ has also fallen into channel difficulties, losing out to several competitors in offline channels. Its online business has remained lukewarm. Micro-businesses seem to have become their last reliable option.

Three months ago, I predicted that "any e-cigarette brand engaging in micro-business will only become weaker." As expected, after several rounds of failed financing, YOOZ's co-founder, the original "Huang Taiji founder He Chang," quietly exited, later founding a new brand LAMI, which has since vanished after its first round of pre-sales, leaving many puzzled.

"Strategic losses" lead to "strategic fatigue".

It is still early to draw conclusions, and we cannot definitively say that XXX is the previous XXX.

However, in this emerging industry, both consumers and investors should adopt a more rational perspective on this "addiction product frenzy."

Chinese people have experienced shared bicycles, blockchain, and VR. We seem to have forgotten a fundamental trait of the Chinese: being grounded.

Companies like JD, Luckin, and Didi have created "strategic losses" that have led to "strategic fatigue" among the Chinese populace.

It is time to take a breather. The essence of business is simply "making money."

In the e-cigarette industry, who is still focused on making money? It seems no one wants to do that.

Doing e-cigarettes while being grounded and making money feels like picking up cans in a nightclub, looked down upon by others.

If this is considered healthy development, I cannot imagine what unhealthy development would look like.

Picking up bottles in a nightclub
  #p#分页标题#e#

RELX is a rare company that has found a balance between being grounded and being extravagant. They know how to create buzz and are adept at making big moves, always shaking the industry with their actions and driving everyone towards new goals. Their style is noble, even somewhat selfless.

Some call it "international style," which is not something that a "smart enterprise" can replicate by encouraging all employees to use Google search. It is a kind of pride embedded in the company's DNA.

If there is a second company, I believe it is Huoqi. This name may sound unfamiliar to outsiders, but it is quite well-known within the industry.

In 2018, this company signed a contract with Wu Jing before the release of "Wolf Warrior 2," bringing the first "celebrity endorsement" to the e-cigarette industry. They fired the first shot in the e-cigarette industry's "burning money" campaign, living up to their name, "Huoqi."

Then, while RELX was preparing its Tmall flagship store, Huoqi managed to open over 300 offline stores in just three months, a number that was unimaginable in 2018. At that time, everyone thought, "This company is going to thrive." Unexpectedly, Huoqi's product quality encountered significant issues, severe enough that even the benefits from "Wolf Warrior 2" could not sustain them, leading the company towards decline.

Just when everyone thought Huoqi would fade away like other old e-cigarette brands, in the spring of 2019, Huoqi's team, with sly smiles, pulled out their "big treasure"—the ammo replacement vaping device.
 
Ammo lived up to its name, striking the hearts of all practitioners like a bullet—no one knew how terrifying it would be when starving offline channels met excellent products.

They recruited 34 provincial distributors in just 254 working hours.

One month, zero days.

In early summer 2019, three months after the launch of the ammo product, they announced a new record of "200,000 main devices sold monthly and nearly 3 million pods sold." Even if we halve this potentially inflated number, it still represents an astonishing sales figure of nearly 1.5 million pods.

After the product hit the market, the feedback was overwhelmingly positive, with a low probability of oil leakage. Huoqi also claimed, "We have solved the difficult problem of oil entry."

I shared this conclusion in an industry WeChat group, and it was recognized by over ten distributors from different brands across four cities in mainland China. Everyone had a significant change in perception regarding Huoqi's product quality. Such a low start and high rise is commendable.

Compared to the hot sales, Huoqi's "noise" was as quiet as if it had a silencer. There was little news about Huoqi in the industry, and the most one could hear were astonishing production numbers from factories, which left many puzzled.

"They had all their employees at our factory overseeing production in April, with even a dozen employees personally on the production line. Every batch of goods was shipped directly to the company without any remaining stock."—the sales director of Huoqi's OEM factory said in an interview.

No one knows what these people are thinking because they don’t speak; they just collect money.

After RELX, another elder picking up bottles in the nightclub has emerged.

Conclusion

The e-cigarette industry is so noisy, and every participant is like a beautiful woman jumping into the dance floor after drinking, swaying their bodies to attract more attention.

However, I feel that the girls sitting calmly with red wine on the side, engaging in deep conversations, are even more alluring.

Companies like RELX and Huoqi, which focus on doing business steadily, are always welcome. Behind the dazzling sales and hype, stable profitability is the ultimate lifeline for a business.

"Odd and elegant, refined and beautiful," these two oddballs in the e-cigarette circle have not made any grand gestures; they have merely done some grounded work.

This in itself is worth pondering.