Vape Weekly: JUUL China Pricing Revealed; 23% of Tobacco Retailers Sell Vapes

The weekly newspaper will take stock of and share major events that have occurred in the domestic and foreign e-cigarette industry in the past week, striving to make readers become senior figures in the e-cigarette industry.

1. Domestic developments

1. The first semi-open bomb-changing e-cigarette idols Aidou will be released
 
Blue Hole learned from YouMe Group that the company will release the first semi-open ammo replacement e-cigarette in China on September 20. The brand name is idols Aidou. The e-cigarette can be directly replaced with cigarette cartridges or injected with cigarette oil independently.

It is reported that the idols standard set (1 shot +2 bombs) is priced at 288 yuan, and there is also an upgraded set with an additional 11 yuan, including one shot and two bombs and a bottle of 10ml tobacco oil, equivalent to 5 cigarette bombs, priced at 299 yuan.

YouMe Group is a new consumer goods company. In May this year, it announced that it had received 73.6 million yuan in angel round financing and has 6 smoking brands in 4 major markets including the United States, Europe, Southeast Asia and China.

2. Changying precision enters the e-cigarette industry, and its new customer is JUUL
 
Changying Precision (300115.SZ) disclosed in its 2019 semi-annual report that the company has obtained supplier qualification from JUUL Labs, an international e-cigarette company. It is reported that in June 2019, the company established a wholly-owned subsidiary, Dongguan city Alpha Electronic Technology Co., Ltd., which mainly conducts ODM and EMS for e-cigarettes, Internet of Things hardware, wearable devices, service robots and other products.

Analysis believes that Changying Precision has successfully entered the supply chain of international e-cigarette giant Juul Labs, indicating that the company is expected to share the huge e-cigarette market pie in the United States and even around the world in the future. At the same time, the name of Juul Labs supplier is also expected to help Changying Precision has received more orders from other companies in the e-cigarette field.

3. Merui Health International once again increased its holdings of Longwu Technology, already holding 13.8%
 
Blue Hole reported on September 4 that Merui Health International, a Hong Kong-listed company, issued an announcement stating that Merui Health International had acquired approximately 7.8% of a shareholder of Shenzhen Longwu Electronic Cigarette Co., Ltd. through its wholly-owned subsidiary, involving approximately 10.8 million yuan., with a valuation of approximately 130 million yuan.

Previously, Merui Health International had completed its equity investment in Shenzhen Longwu through a capital increase agreement and obtained 6% of the shares at a consideration of 8.27 million yuan. After the acquisition is completed, Merui Health International will hold 13.8% of Shenzhen Longwu's shares. It will also have the right to further increase its shares by no more than 10%. If the acquisition is completed, it will hold 22.43% of Shenzhen Longwu's shares, and will pay the relevant acquisition price with internal resources.

4. Survey results: 23% of tobacco sales outlets sell e-cigarettes
 
China Tobacco Control Association held a press conference on the results of the 2019 Tobacco Point of Sale Survey on September 3. A survey of 741 tobacco sales points in 8 cities, 7 counties and 3 townships in 8 provinces showed that tobacco advertisements at tobacco sales points rebounded significantly: He County/towns surveyed found tobacco advertisements at tobacco sales points; up to 63.7% of tobacco sales points found tobacco advertisements, and only 36.3% of sales points found no advertisements. In addition, up to 23% of tobacco outlets sell e-cigarettes.

5. Wu Chenguang, former vice president of Little Information, is suspected of joining Xuejia
 
According to Shangpin New Consumption Report, Xuejia Electronic Cigarettes recently introduced a senior executive in charge of public relations marketing, suspected to be well-known media person Wu Chenguang.

According to public information, Wu Chenguang has served as a reporter, editor, and deputy editor-in-chief at CCTV, Southern Weekend, and Blog World Magazine. He is also the founder of new media of China News Weekly. In April 2015, Wu Chenguang resigned from Sohu and transferred to the position of vice president and editor-in-chief of mobile APP Yidian Information.

6. Relevant persons responded that they could not retrieve the national standard information of e-cigarettes: query system maintenance and upgrade
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On September 6, it was reported that Blue Hole New Consumers logged on the official website of the National Standards Committee to check the progress of national standards related to e-cigarettes, and found that it was no longer possible to find standards related to e-cigarettes.

However, according to e-cigarette information, a person in charge of customizing the national standard said that the national standard has not been offline, but because the homepage query system is maintained and upgraded, all standards cannot be searched. Currently, you can inquire at the following address: std.samr.gov.cn/gb/search/gbDetailed? id=5DDA8BA24A8D18DEE05397BE0A0A95A7

7. Juul e-cigarette pricing exposure in China
 
On September 8, Blue Hole learned about the product pricing of the American e-cigarette giant JUUL e-cigarettes in China. JUUL currently launches three types of products for sale in China: First, the JUUL atomizing cigarette set is priced at 369 yuan, and a set of 4 cigarette cartridges worth 149 yuan (equivalent to 1 stick +6 cartridges) will be given. The nicotine content is 5%, which is consistent with the nicotine content of JUUL cigarette bombs in the United States; the second product for sale is pure tobacco rods, costing 299 yuan per stick; the third product for sale is pure tobacco bombs, costing 149 yuan for four bombs, which is 37.25 yuan per stick.

It is unclear whether the products sold by JUUL in China are consistent with overseas products, or whether it has carried out localized research and development for the China market.

2. Foreign developments

1. The U.S. Food and Drug Administration proposes an e-cigarette supervision plan
 
  According to news from the American Tobacco Industry News Network, recently, Ned Sharpless, head of the U.S. Food and Drug Administration (FDA), announced to the outside world that they have formulated a regulatory plan for e-cigarettes. Some of the contents of the plan include:

The first is to restrict young people from using electronic nicotine delivery devices;

The second is to carry out inspections on retailers and manufacturers of e-cigarette products;

The third is to strengthen the review and supervision of the production qualifications of manufacturers of such products;

The fourth is to strengthen strict review of new tobacco products such as e-cigarettes before they are marketed, and require detailed product data information to be provided in pre-market applications;

The fifth is to prevent smoking among young people through strict law enforcement education, and at the same time carry out more scientific research work in this regard.

2. South Korea ranks as the world's second largest heated tobacco market
 
The latest data from Euromonitor International shows that in 2018, South Korea's heated and non-burning market value reached US$1.67 billion, far exceeding the US$453 million in 2017, becoming the world's second largest heated tobacco market.

In 2018, the total size of South Korea's tobacco market was US$15.6 billion, and growth is expected to be limited by 2023, but Euromonitor International said that the country's heated, non-burning market is expected to grow by 21% annually and increase to US$4.4 billion by 2023.

3. Minnesota passes indoor smoking ban on e-cigarettes
 
According to foreign media reports, recently, Minnesota, the United States, has passed a new "Indoor Clean Air Act." This is an amendment to the state's previously enacted tobacco control bill: in addition to the previous ban on the use of traditional cigarette products in most indoor public places, a new indoor smoking ban on some new tobacco products is added.

A statistic from the Minnesota Department of Health shows that in 2018, 20% of local high school students used and consumed e-cigarettes, an increase of nearly 50% compared with 2014.

4. India's Karnataka state classifies nicotine as a Class A poison
 
According to foreign media reports, the Karnataka government of India recently revised the 2015 Karnataka Poison (Possession and Sale) Rules to list nicotine as a Class A poison.# p#pagination title #e#

Under Rules 26A and 10A, Karnataka will ban the sale, manufacture, import and distribution of all Nicotine Delivery Systems (ENDS).

5. The Australia government will conduct scientific surveys related to e-cigarettes
 
According to Vaping Post, people from the public health community in Australia submitted relevant proposals to local regulatory agencies, requiring scientific investigation and research on e-cigarettes. After the efforts and consultation of many parties, this research on e-cigarette products has been determined to be led by Professor Emily Banks, an epidemiologist at the National Center for Epidemiology and Population Health of the National University of Australia, and the team led by her will conduct the research work on this project.

According to reports, this research work on e-cigarette products has been officially launched in 2019 and is expected to be completed in December 2020.

6. Michigan bans flavored e-cigarettes
 
On September 5, according to CNBC and other foreign reports, Michigan Governor Gretchen Whitmer announced that the state would ban the sale of flavored electronic liquids and atomized products, including mint and menthol. If the Michigan ban is successful, it will become the first statewide ban in the United States.

The ban will take effect immediately after the state Department of Health and Human Services (DHHS) issues rules, including online sales, and retailers will have 30 days to sell existing inventory. DHHS will establish permanent rules during a six-month temporary ban.

7. JUUL launches a new era verification system
 
According to vapingpost, JUUL recently launched a new era verification system for point-of-sale in an attempt to regain credibility in the face of accusations that it is trying to target minors. At the same time, in order to encourage retailers to adopt the system, Juul will provide more than $100 million in rewards to stores that adopt the standard by May 2021. In addition, manufacturers plan to stop distributing products to any retailers that do not implement the system.

Currently, more than 40,000 outlets in more than 50 retail chains have established Juul's age verification system, including convenience store chains ExtraMile and Cumberland Farms.

According to reports, once the age verification feature is implemented, scanning Juul products will lock the point-of-sale system until a valid government ID (similar to an ID card) is scanned. The system will also automatically limit the number of Juul products a customer can purchase.