Is China's 2019 Vaping Market a New Boom Opportunity?

Is the 2019 vaping market in China a new boom opportunity? In today's landscape where giants are continuously entering the new retail sector, and vertical e-commerce is steadily maturing, and social e-commerce is exploding, e-cigarettes have become popular. A single product has become a trend, with a very low entry barrier, and it is a product that carries an "original sin," attracting continuous entrepreneurial stars like Luo Yonghao and various capital investments.

Without discussing the "original sin" issue, I have been pondering the key factors that have led to its emergence as a trend.

I believe it is the coexistence of market choices driven by trends and individuality, along with the vast market space in the domestic e-cigarette market compared to the already mature e-cigarette markets in Europe and America.

What does it mean for trends and individuality to coexist? Let’s first discuss the history of retail development, especially the retail development history since the advent of the internet.

The 1.0 phase of e-commerce is about connecting people and goods. From the beginning, B2B was essentially about connecting people with information; the real connection between people and goods began with C2C and B2C. The 2.0 phase of e-commerce is about connecting people, goods, and places, where new retail emphasizes reconstructing the relationship between people, goods, and places, while traditional retail is also a business of "goods, places, and people," but at that time, the place occupied a central position.

The 3.0 phase of e-commerce is a variant of scenario-based e-commerce, which, to some extent, is the core of new retail.

However, scenario-based e-commerce has significantly driven another explosion in vertical e-commerce, combining vertical e-commerce with offline consumption scenarios, which is the highlight of e-commerce 3.0.

Vertical e-commerce is a dual-dimensional concept, including verticality in product categories, focusing on the integration of upstream and downstream resources in the industry, creating unique features for standardized products, and branding non-standard products; it also includes verticality in target demographics, simply put, it is about uncovering the core needs of specific groups.

We are currently entering the 3.0 phase of e-commerce, where the true core is to explore the inherent potential of each product and the core needs of specific demographics.

Thus, starting from the single product of e-cigarettes, deeply exploring the personalized needs of China's vast number of smokers, which differ from traditional cigarettes, is a trend-driven necessity.

In China, over 90% of projects that attract investors have successful cases in Europe and America, which is determined by the user base in China. Once the e-cigarette industry can disrupt the traditional cigarette industry, it will be a blue ocean project with a market value exceeding 100 billion.

Therefore, it is not surprising that this sector can become a trend; there will always be trends every year, but the market is the ultimate judge of the product, and the product needs to bring value.

Regarding e-cigarettes, the extent of their harm to the human body still lacks a final conclusion, so their emergence is destined to carry an "original sin." There is still a long way to go in terms of how they exist within the entire market, including relevant laws and regulations.