How RELX Ran 10,000+ Offline Brand Trial Events in One Year

Perhaps most people are still unaware that although e-cigarettes are not widely popular in China, they actually originated from the country.
In 2003, a pharmacist named Han Li developed the world's first e-cigarette, "Ruyan," which peaked at nearly 1 billion yuan in sales within a year. However, in 2006, it was exposed by CCTV for false advertising, leading to a decline in sales, and ultimately, the brand had to abandon the domestic market and shift focus abroad.
After 2018, e-cigarettes returned to the public eye and showed a "concentrated explosion" trend.
According to the latest statistics, on June 5, 2019, 14 domestic e-cigarette companies completed financing, with a total amount of approximately 574 million yuan, far exceeding the total financing amount for the entire year of 2018.
Tobacco is a trillion-dollar market, and e-cigarettes are seen by the industry as the next big opportunity worth pursuing.
Since it is a significant opportunity, competition is inevitable. In this competition, price wars are unavoidable. As e-cigarettes are still in their infancy and market education phase, sales primarily rely on channel profits. Limited channel resources mean scarcity, creating a zero-sum competitive situation where brands must engage in fierce price battles for channel dominance.
Brands compete on discount strength, intensifying vicious competition. While brand owners carry heavy burdens, they are already overwhelmed by issues such as distribution difficulties, cost coverage challenges, and profitability struggles.
Recently, New Distribution interviewed Mr. Jiang Long, co-founder of RELX, a leader in the e-cigarette field. Mr. Jiang graduated from Tsinghua University and is the second employee of RELX. We hope to hear his views on branding, channels, and the industry from his perspective.
RELX, as one of the earliest entrants in the e-cigarette field, was established in January 2018. Less than a year later, it grew into a leading e-cigarette brand in China.
Many people believe that RELX's rapid growth is due to its timing with the e-cigarette boom. In fact, when RELX entered the e-cigarette market in 2017, the industry was still barren. China is a major producer of e-cigarettes, manufacturing nearly 90% of the world's e-cigarettes, yet there was not a single Chinese brand in the market.
User value is the competitive barrier
The growth of a brand mainly follows three logics: first, acquiring user recognition through marketing; second, seizing channels through discounts; and third, focusing on product quality to impress consumers by creating user value. Given the uniqueness of the e-cigarette market, marketing is ineffective, channels are easily contested, but competition is too fierce. Ultimately, RELX chose the third path, building its brand through product quality.
In terms of product positioning, RELX targets the 1 billion smokers worldwide, with China as its core market, gradually expanding globally to provide smokers with a healthier and more enjoyable way to smoke. Therefore, from the very beginning, RELX invested tens of millions in establishing a research and development center in Shenzhen.
Mr. Jiang stated that the best decision RELX made was to drive the brand with its mission and values, adhering to the principle of putting products first. When faced with difficult decisions, aligning everything with values makes it easier to resolve issues.
For example, when designing product packaging, all e-cigarettes on the market were in small packages with instructions in foreign languages. RELX chose the unpopular large packaging with Chinese instructions. Since RELX aims to serve Chinese smokers, it must think from their perspective. Today, RELX's packaging has become the mainstream design.
Mr. Jiang mentioned that consumers are easily moved, but the key is whether one is attentive and pays attention to details. In its early days, RELX initiated a crowdfunding campaign, bringing participants into QQ and WeChat groups. A service response mechanism was established, requiring any questions raised by users to be answered within 30 seconds. One customer service representative even refrained from using the restroom for over ten hours just to respond to inquiries.
Last year, RELX faced a quality crisis due to production capacity issues, resulting in e-cigarettes leaking oil. Those in the know understand this is a significant incident. However, because consumers had previously established an emotional connection with RELX, when the crisis erupted, consumers not only did not abandon RELX but also enthusiastically offered solutions.
User value is the competitive barrier because when a brand creates enough value for consumers, they become indispensable and voluntarily bind themselves to the brand. Channels can be taken away, but consumer emotions are hard to penetrate.
Today, RELX's service requirements for users remain stringent, with customer satisfaction needing to reach 99.8%. The supporting force behind this is the consistent values shared by RELX's team. #p#分页标题#e#

Dual empowerment, proactive approach

In the e-cigarette market, offline channels represent another red ocean of competition outside of brands. While it is said that where there is money, there is competition, the big question is how to help channels earn money better.
Essentially, channels exist to improve product accessibility, meaning consumers should be able to buy products whenever they want. However, e-cigarettes have a natural disadvantage: they lack static sales power.
RELX's methodology is as follows. The lack of static sales power for e-cigarettes at the terminal is due to the market not being fully educated, and consumers have too little understanding of e-cigarettes. Therefore, as long as consumers are attracted and brought to the terminal, the problem can be solved. Based on this idea, RELX's channel strategy is a dual-channel empowerment system.

From the top down, RELX empowers channels primarily through products. By creating user value, consumers establish brand loyalty. At the same time, sufficient profit guarantees are provided to agents, such as investment returns far exceeding those of similar industries.

From the bottom up, RELX empowers channels from the consumer side, mainly through city integrated marketing to build a communication bridge between retailers and consumers, cultivating user awareness. For example, pop-up stores, new product testing, and trial activities. According to Mr. Jiang, in 2018 alone, RELX conducted over 10,000 promotional events, assuming each event covered 100 people, totaling 1 million users reached.

By establishing a complete channel empowerment system, RELX has accumulated 20,000 terminals offline, while typically successful brands only have about 3,000. In terms of overall channel layout, online includes e-commerce platforms like Tmall and JD, while offline includes self-operated stores, traditional channels, convenience stores, Carrefour, Yonghui, and other key accounts, as well as new retail channels.

Mr. Jiang stated that the purpose of self-operated stores is to provide better service and experience for consumers. Currently, RELX has opened 200 stores across 50 cities in 19 provinces, including Suzhou, Shenzhen, Guangzhou, and Chengdu, which are new first-tier cities. In the future, RELX plans to expand to 1,000 stores.

Staying open and embracing change

Currently, the scale of China's e-cigarette market is about 4 billion yuan, accounting for only 5% of the global market. Although the market share is small, China is the world's largest producer and exporter of vapor e-cigarettes. Among the top five brands in the U.S. market for small e-cigarettes, three are produced by Chinese e-cigarette companies, and all top five brands for open e-cigarettes are produced and exported by Chinese companies.

The future of China's e-cigarette market looks promising. However, for the market to thrive, it cannot be separated from policy regulation. Recently, the most concerning issue for e-cigarette industry practitioners is the introduction of e-cigarette regulatory legislation. Mr. Jiang expressed that RELX is very much looking forward to the announcement of national standards to better regulate the market and products, which would be beneficial for the entire e-cigarette market.

In terms of market competition, due to the low technical barriers in the e-cigarette industry, price war competition is easy to enter. This raises the question of whether brand owners want to make quick money in the short term or operate for the long term. RELX advocates focusing on long-term value. A healthy market is certainly not one where bad money drives out good. Therefore, as long as products achieve differentiation, possess uniqueness, and create user value, for consumers, you become a unique brand that is hard to replace.

RELX believes that the domestic market is still in the education phase, and the entire industry must not be shortsighted. Everyone must work together to educate the market to promote further development. If the focus is on homogeneous competition, engaging in price wars, and doing things that harm user experience, it is detrimental to the entire industry. For example, there is a saying in the industry that it takes 5 million to create a brand, but it should actually refer to 5 million to create a product. However, the experience of such a product is questionable.

From the consumer perspective, there are currently 350 million smokers in China, all of whom are potential consumers of e-cigarettes. What RELX needs to do is to deeply understand consumer needs. RELX will consider why users smoke? Because users need nicotine, which produces dopamine in the body.

So what role should e-cigarettes play? Mr. Jiang believes that e-cigarettes are a harm-reduction alternative to traditional cigarettes, so RELX advocates a healthier way to smoke. Of course, smokers can be divided into "true smokers" and "false smokers." For "false smokers," RELX will launch nicotine-free e-liquids to satisfy consumers' desire for the "smoking" experience.

In conclusion

The e-cigarette boom has just begun. Consumer awareness of e-cigarettes is gradually spreading. With new national standards about to be introduced, small brands and workshops will inevitably be eliminated, while leading companies will move towards better quality and more correct values. #p#分页标题#e#

Existence is reasonable, but to gain long-term value, the original intention is crucial!