After the National Standard, Where Is the E-cigarette Industry Headed?

The e-cigarette industry has followed much the same path as blockchain did during last year’s boom: from quiet beginnings to explosive popularity, capital frenzy, uneven product quality, chaotic competition among all parties, then national regulation and market standardization. It is reported that the mandatory national standard for E-cigarettes is currently in the approval stage and could be released as early as this year. As the strict national standard approaches, where will China’s cloud-filled domestic e-cigarette industry go next?

As the national standard approaches: capital cools, the market becomes standardized, and competition turns transparent

First of all, it must be emphasized that the introduction of a national standard for e-cigarettes is good news for the entire industry and for consumers. Reports show that from 2017 to 2021, the industry’s compound annual growth rate reached 32.5%. The rapid rise of the e-cigarette industry quickly attracted capital from all sides, and many listed companies have already entered the business. The frenzied influx of capital further pushed many brands to pursue expansion speed excessively while neglecting products and consumer experience. Blind expansion led to uneven product quality, exaggerated specifications, excessive e-liquid ingredient levels, substandard device quality, weak safety assurance, poor consumer experience, and many other problems. Once the national standard is officially introduced, brands that fail to meet quality requirements will inevitably collapse quickly. Capital at the top level will also become more rational, no longer spending blindly, and instead shift investment toward high-quality vaping products.

Secondly, it will bring about a more standardized market. Brand owners will no longer be able to use borderline tactics to market to teenagers, and products will be required under the national standard to meet basic quality benchmarks. Consumers, in turn, will no longer be misled by terms such as nicotine salt content, throat hit, healthier cigarette replacement, or smoking cessation miracle device, nor will they have to pay the price for harm caused by inferior products.

The national standard for e-cigarettes will also promote fair, open, and transparent competition. Brand owners will not be able to manipulate product competition, nor disrupt market rules through price wars or public opinion wars. Counterfeit and copycat manufacturers will likewise no longer be able to produce low-quality products and pass them off as genuine or premium goods.

Quality as the foundation, experience as the guide, and everything centered on the consumer

The most profound change brought by the national standard will be to the products themselves. From a product perspective, the introduction of the national standard is also a major opportunity to improve e-cigarette quality. The most important product-level change will undoubtedly involve the e-liquid, since it contains a variety of substances and requires stricter oversight and more clearly defined standards. It is understood that the national standard will set clear requirements for nicotine, e-liquid ingredients, additives, and related substances. The nicotine levels currently promoted by most brands, such as 3% and 5%, will be adjusted to the greatest extent possible. As a result, experiences such as so-called throat hit, craving satisfaction, and cigarette replacement performance will also inevitably change in response to policy.

At the end of the day, the introduction of the national standard will put consumers first, ensure product quality and safety, and provide maximum protection for consumer interests, so that the market can develop in a healthier direction.

The e-cigarette industry is about to face its strongest regulation yet, and a large number of brands with a speculative, opportunistic nature will be eliminated by the market. In the second half of the industry, the core principles of standardization, transparency, and healthy development will be quality and consumer experience. If product quality can be reliably ensured, all kinds of e-cigarette brands will also gain more sustainable long-term development.