Vaping companies grow rapidly, up 71,000 in three years

Since 2013, companies related to e-cigarettes have grown rapidly. In 2017, 18,000 new such companies were added; in 2018, 23,000 were added; and in 2019, 30,000 were added, representing a year-on-year increase of 30%.

May 31 marked the 33rd World No Tobacco Day, with the theme “Protecting young people from traditional tobacco products and e-cigarettes.” The Chinese Center for Disease Control and Prevention released the 2019 China Secondary School Student Tobacco Survey results. The results showed that while cigarette use among junior high school students declined significantly, e-cigarette use rose markedly.

For decades, the tobacco industry has attracted large numbers of young people to buy tobacco and nicotine products. China currently has 350 million smokers and is the world’s largest producer and consumer of tobacco, with a smoking rate above 38%. The smoking rate among Chinese adolescents is 6.9%. At present, China has 1.623 million active and existing companies related to the tobacco industry, of which 144,000 are e-cigarette companies.

Registrations of tobacco-related companies in China accelerated after 2016
 
In terms of regional distribution, Guangdong Province has the largest number of registered tobacco-related companies, with 316,000. Zhejiang ranks second and Hunan ranks third, with 285,000 and 163,000 respectively.
 
Over the past decade, registrations of tobacco-related companies have shown a fluctuating upward trend. From 2009 to 2014, annual new company registrations hovered between 90,000 and 100,000, with relatively modest growth. After 2014, the number of new companies increased year by year. Growth accelerated starting in 2016, and in 2019, 285,000 new tobacco-related companies were added, a year-on-year increase of 25%.
 
In the first quarter of 2020, a total of 59,000 new tobacco-related companies were added, while 4,000 were deregistered or had their licenses revoked. Compared with the first quarter of 2019, the number of newly added tobacco-related companies increased by 18% year on year, while deregistrations and revocations fell by 75% year on year.

E-cigarettes, promoted under the banner of “smoking cessation,” have developed rapidly in recent years
 
As living standards improve, growing attention is being paid to the health effects of smoking. E-cigarettes are marketed as electronic products that can replace cigarettes and contain far fewer harmful substances, creating an image of being healthier and trendier, and they have developed rapidly in recent years.

According to Qichacha data, as of now, China has 144,000 active and existing companies related to e-cigarettes. Shandong, Guangdong, and Jiangsu rank in the top three in terms of related company registrations, with Shandong taking first place with 26,000 companies. Hebei, Henan, Anhui, Zhejiang, Shaanxi, Sichuan, and Hubei also rank in the top ten.
 
Since 2013, e-cigarette-related companies have grown rapidly. In 2015, a total of 11,000 new e-cigarette-related companies were added. In 2017, 18,000 were added; in 2018, 23,000 were added; and in 2019, 30,000 were added, a year-on-year increase of 30%. Over these three years, 71,000 new companies were added.

At present, the impact of e-cigarettes has already drawn the attention of regulators. According to media reports, on May 30, an offline e-cigarette store in Nanshan District, Shenzhen, was formally investigated on-site by the Shenzhen Tobacco Control Office for failing to post the required signage, and it may face a fine of 2,000 yuan. Earlier, on October 1, 2019, the revised Shenzhen Special Economic Zone Smoking Control Regulations officially came into effect, and e-cigarettes were included on the tobacco control “blacklist.”