A New Shift in China's Offline Vape Retail Channels

The following is a summary of the layout and changes in the online channels of six e-cigarette brands summarized by Blue Hole.

Self-author: Representative of a certain Internet celebrity brand in Henan Province.

Agency time: two months.

Current record: 18 city representatives have been signed, with a city coverage rate of 78%, and large-scale business has been carried out.

Number of terminals developed: 587, excluding circulation channels such as convenience stores.

The following is a self-written article, with blue holes slightly deleted.

Why did I choose to sell e-cigarettes?

Although I started my business for many years, it only took a short decision-making time to enter the e-cigarette industry. It was also because I had the occasional opportunity to come into contact with e-cigarettes and successfully quit smoking that I decided to enter the industry.

Around the Spring Festival of 2019, we saw the news that a certain V had created a fruit brand e-cigarette in the circle of friends and multiple self-media platforms and sold millions of e-cigarettes in the circle of friends. Based on their sensitivity and curiosity for information, mainly because I was bored during the Chinese New Year, I used various search tools to have an in-depth understanding of this brand and the e-cigarette industry, and found several important information about this industry:

The American brand Juul has been valued at US$38 billion in just three years since its establishment. Many domestic e-cigarette entrepreneurial projects have learned from Juul's model.

Many domestic emerging e-cigarette brands have received large investments from well-known institutions.

E-cigarette products are shifting from niche large smoke products in the past to popular small cigarette products.

The incremental market for e-cigarettes is huge.

The composition of e-cigarette liquid is simple and relatively healthy.

E-cigarettes contain nicotine and are still addictive, so users are highly sticky and have a high repurchase rate.

The search and popularity index of e-commerce and Internet platforms has soared.

Based on the above information, I judged that the e-cigarette industry will enter a period of rapid growth in the 19th century, so I decided to enter the e-cigarette industry.

How do I choose a brand agent?

The process of selecting a brand was particularly prudent. The whole process lasted for nearly two months, and he spent more than 10,000 yuan to purchase products from most brands in the market for actual measurement.

I choose a brand in several dimensions:

Background of the founding team;

Whether there is institutional investment;

Whether product positioning and brand positioning are suitable for your advantages;

Whether the price system is reasonable;

Whether there is an effective market strategy;

The character of the O-level person and the motivation of the company (I didn't think much about this before, but later found out that this is the most important).

After a few months, I have contacted the founding teams of at least twenty brands, but after screening the above conditions, you will find that very few people meet the requirements in the Thousand Cigarette War.

In the end, I chose a certain Internet celebrity brand, signed a contract with a provincial representative, and began to expand the market.

The market is still in a large blank state

In order to enable this project to operate efficiently, I registered a company separately and brought in senior FMCG veterans, as well as SaaS technicians responsible for developing distribution systems with regional protection functions and offline drainage functions, as partners, and also introduced self-media and e-commerce operators and resources.

I have rich personal experience. I have opened a factory, operated a Tmall store for ten years, and established an O2O model chain store, so I positioned myself at the provincial level from the beginning and had complete plans.

After a period of practical exploration, I found that in fact, the current e-cigarette market, especially the offline market, is not as good as expected. The stock market is still very small, the market is still in a large blank state, and consumers still have a lot of understanding about e-cigarettes. Market education will take a long time.

I feel that the e-cigarette industry is not an Internet project. I very much hope that brands will not be too impetuous and be able to calm down and make products well. Agents at all levels should pay attention to the development of blank channels.

future plans

Achieve no gaps in city-level cities across the province;

Jointly develop 1000+ bomb replacement terminals and 5000+ disposable small cigarette terminals with the city representative;

Open 30-50 specialty stores;

Assist city representatives in refining and deepening channels;

Launch your own products when necessary to deal with price wars.

Changes in e-cigarette channels: from extensive to specialization and refinement

Since the emergence of the three major Internet celebrity brands in 2019, the e-cigarette industry has rapidly expanded from small-circle products to some consumers. Many companies have quickly obtained financing and quickly launched their brands.

Blue Hole noticed that many new brands have adopted some different approaches to offline channels during the past nine months, including changes and upgrades.# p#pagination title #e#

Blue Hole selected six e-cigarette brands that we know better for a review. Any omission does not represent the channel actions of the overall brand, and is for reference only.

1. An Internet celebrity brand reconstructs its agency channel

After running rapidly in the first half of the year, a certain Internet celebrity brand has begun to slow down, including some personnel adjustments, supply chain adjustments, and even channel system adjustments.

Blue Hole learned that the brand is likely to readjust the provincial and municipal representatives it signed earlier, from the previous extensive model to refined operation.

For example, in the first half of the rapid testing and rapid development, each city used to sign an exclusive city representative, but after a period of development, it was found that one city representative could not fully cover all channels in the city.

At present, the main offline channels include e-cigarette specialty store channels, big KA channels, 3C digital channels, convenience store channels, night bars and other channels. Obviously, relying on only one city representative is impossible to cover all channels in the city in a short period of time. Therefore, signing a contract for a city to a unique generation is obviously inefficient and cannot defeat other opponents.

It is better to distinguish different channels in a city and select people with resources and capabilities for each channel to expand. This will be more reasonable.

In addition to refining municipal channels, some brands will also cancel provincial representatives and directly develop municipal representatives to quickly spread the market.

At present, many brands will slow down after running at the beginning of the year, think, and speed up again.

2. Lingxi mainly promotes direct sales and KA channels

Another popular online brand, Lingxi Electronic Cigarette, is very cautious about the agency model. Currently, it mainly adopts a direct sales model and KA channels to expand the market.

According to Lingxi CEO Zhang Jinyuan, Lingxi is currently cooperating with Lang people in Shanghai and other regions to conduct deep penetration in nightclubs, bars, and couple's wife stores, all adopting a direct sales model.

The advantage of this is that the headquarters can have a good grasp of business data and can thoroughly understand terminal stores in a city. On the other hand, it is relatively stable and there will be no situations such as fleeing goods or pricing. The disadvantage is slow copying.

At the same time, Lingxi headquarters has also signed contracts and cooperated with major domestic KA channels to facilitate the nationwide roll-out faster.

"Starting an e-cigarette business is a long-distance journey. We accumulate experience while running. Running too fast will waste time and then turning back." Zhang Jinyuan said.

3. Boulder likes mobile retail talents

Platinum's approach is to introduce mobile retail executives to improve the professionalism of channel network construction.

On July 26, Blue Hole reported that Platinum announced that two senior executives would join. Cheng Yuncai, former national channel general manager of Duowei Mobile, joined as Platinum's national channel director, and Duan Fei, former OPPO sports store retail business, joined as national retail director.

Cheng Yuncai has successively served as director of North China, East China, and South China Duowei Mobile, and finally served as general manager of Duowei Mobile's national channels. He is responsible for the construction and management of national channels and has rich mobile phone channel resources and experience.

Duan Fei, another national retail director, was responsible for the retail business of OPPO's specialty stores for a long time before joining Platinum. She has been responsible for product lines such as mobile phones, accessories, and smart peripherals. She is familiar with 3C Digital's ecological chain products and supply chain services, especially with the expansion of the retail system, brand exposure, store promotion, etc., has rich experience and management capabilities.

Judging from the idea of introducing these two channel executives, Platinum prefers the 3C digital channel approach.

OV sinking mobile phone brother can be said to be the exclusive store to the extreme, almost can be said to be the township capillary level penetration, platinum introduced mobile phone executives, may soon sink electronic cigarettes to a wider area.

4. Xuejia prefers FMCG talents as channels

As a new brand that wants to join the top camp, Snowpack's voice in the industry is often regarded by its peers as a high-pitched attack. From announcing a maximum of US$40 million in financing in the first half of the year to shipping 800,000 units in July, everything has aroused controversy.

Focusing on Xuejia's channel talent introduction, Xuejia particularly likes FMCG talents, which is completely different from Platinum's talent style.

On July 26, Xuejia announced that former Heineken China sales executive Liu Shuo had joined as the national channel sales leader, responsible for Xuejia's channel sales and consumer sales business.

Liu Shuo has rich experience in the FMCG industry and has engaged in marketing and sales management at Anheuser-Busch InBev's global headquarters, Heineken China and Kraft Heinz China.

On August 22, Xuejia announced that Liu Chaohua, the former vice president of sales of Wrigley Candy (China) Co., Ltd., had joined in July as the vice president of national offline sales, responsible for national offline sales business.# p#pagination title #e#

Liu Chaohua has successively served as vice president of sales for Colgate and Wrigley Candy (China), and head of sales integration at Mars Wrigley. While responsible for the national sales of Wrigley Candy, he led an executive team of more than 10,000 people and opened up direct coverage of 1.3 million retail terminal stores in more than 300 cities across the country.

These two executives are responsible for on trade and off trade businesses respectively, and are both accountable to CEO Wang Sa.

It can be seen that Xuejia understands e-cigarette consumption as a fast-moving consumer product, and has invested heavily in relevant talents to penetrate the fast-moving consumer channels.

5. VOZOL Micro Vertical simply clings to mature distribution channels

VOZOL Weizong is a newly established e-cigarette brand. It has just announced the completion of an angel round of financing and is strategically invested by E-cigarette overseas distribution platform Yileu. This is a typical channel leader.

Yile Valley is a well-known channel distribution platform that has been engaged in e-cigarette channel distribution business for nearly 10 years and has overseas channels in more than 70 countries and regions around the world.

The current situation is that once the products produced by VOZOL Micro Vertical Electronic Cigarette are produced, they can immediately enter Yile Valley's original sales channels covering all key e-cigarette markets around the world.

This was clearly a channel for his father. The effect brought by Big Dad is that VOZOL's first product, the D1 disposable cigarette, achieved a predetermined quantity of nearly 100,000 cigarettes in less than a week after being launched in Yile Valley.

It's nice to have thighs.

6. KMOSE carved rice to form its own channel team to conduct it through with one point

KMOSE Kermi is also a newly created e-cigarette brand. It has just announced that it has completed tens of millions of financing. Their channel approach is to cover it by forming its own channel team.

So far, KMOSE Kermi has built 8 well-known domestic convenience store chains (including exclusive cooperation KA channels), covering more than 4000 terminals.

In terms of the single-point channel penetration strategy, KMOSE Kermi implements zoning management, and channel customer conditions and brand activities are carried out simultaneously to achieve refined operation of the area and achieve the goal of all-channel coverage in the city.

CEO Liu Haonan patted his chest and said that KMOSE's K1 products have been readily available in Xiamen.

A friend in Xiamen can help Blue Hole test whether it is as he claims. If not, we will make him pay by sending at least 20 K1s to the users who left messages for this article.

Conclusion: Those who get channels get the world

Online e-commerce can ensure a certain brand exposure and sales, but to reach more consumers, we still have to rely on offline. Previously, we predicted that e-cigarettes would enter an offline decisive battle. Now it seems that in addition to continuing to speak out on the brand side, manufacturers also need to engage in real close combat offline.
 
After all, judging from Juul's sales channel survey, only those who have channels can win the world.