It Turns Out Gier E-Cigarettes Had Such a Big Connection with JUUL!

On October 2, 2018, Huabao International (00336.HK) announced that it had sold all of its equity interest in VMR to JUUL, the leading U.S. e-cigarette brand, for US$75 million, making VMR a wholly owned subsidiary of JUUL. At the same time, rumors began circulating within China’s industry that JUUL’s acquisition of VMR was aimed at expanding into the domestic e-cigarette market.

Especially toward the end of 2018, JUUL became a major topic of discussion because of two labels: “an average year-end bonus of US$1.3 million per employee” and “a valuation of US$38 billion.” It became a phenomenon-level topic among China’s white-collar workers and startup circles, and quickly became widely known to the public.

This was followed by extensive media coverage. An article titled “JUUL Has Already Entered the Chinese Market, and You Know Nothing About It” spread widely across WeChat Moments. The article mentioned that JUUL intended to expand into the Chinese market and had launched a local e-cigarette brand.
 
After looking into it, it turns out that Gier e-cigarettes have extensive ties to JUUL!
According to public information, Gier is a brand under Nanjing Duermei Electronic Technology Co., Ltd., and began selling e-cigarettes in China at the end of 2017. The brand has a clear positioning, focusing on the compact cigarette-alternative segment, and has opened flagship stores on JD.com and Tmall. Its most recent brand exposure came from receiving RMB 12 million in financing from an e-cigarette accessories factory in Suzhou.

Gier’s official website states that the brand is exclusively licensed by VMR Products of the United States. VMR is a long-established U.S. online e-cigarette company, and its V2 brand was once among the top three e-cigarette brands in the United States. At the same time, GR Gier e-cigarettes are also introduced on the brand information page of VMR’s official website.
According to an insider, Nanjing Duermei Electronic Technology Co., Ltd. originally planned to obtain exclusive distribution rights for the V2 brand in China. However, because the V2 trademark had already been registered in China, it used the Gier brand instead, while product design, supply chain, and other support were all provided by VMR. In other words, Gier can be understood as V2’s brand in China.

What truly connected Gier with JUUL was JUUL’s acquisition of VMR equity.

In summary, the relationship between Gier and JUUL is more intuitively shown in the following chart.
 
Gier claims to be a China brand under a JUUL subsidiary, and strictly speaking, that is not inaccurate. However, what we need to understand is that the two have independent product lines, and Gier still continues to use the V2 product line.

At present, both JUUL and Gier enjoy fairly good reputations. JUUL is expanding into the South Korean market, while Gier, after securing financing, has also launched its “Liaoyuan Plan” to recruit distributors nationwide.
 
At this stage, the e-cigarette industry should focus on development rather than brand infighting. Regardless of what kind of relationship they have, the editor hopes that brands can work together for mutual support and jointly promote the sustained and healthy development of the e-cigarette industry.