ZIPPO Vaping Signs with Lenovo: The Offline Battle for Vaping Begins

On June 30, a representative from ZIPPO's electronic cigarette brand VAZO stated in an interview with Beijing Business Daily that offline specialty stores remain a core channel for the company, and it will further increase the number of stores to enhance nationwide coverage.

Previously, ZIPPO signed a cooperation agreement with Lenovo's Laiku Technology to leverage hundreds of Laiku stores for the sales of its electronic cigarette sub-brand VAZO.

Beijing Business Daily has found that many electronic cigarette brands are seeking new sales models in offline channels. For example, Qichang Electronic Cigarette Collection Store has developed a multi-brand electronic cigarette collection smart unmanned retail cabinet, deploying unmanned retail cabinets in various scenarios through a direct sales + franchise model. Brands like Yuzu, Bode, and Xiaoye are also building offline stores, announcing plans to invest in subsidies to open thousands of specialty stores in 2021.

Additionally, some brands are choosing to "stick together for warmth," collaborating to open electronic cigarette collection specialty stores, including partnerships between Wuxiyue and Weita, Xihu, LAMI, and Moti to layout offline multi-brand collection stores. Before cooperating with Lenovo Laiku, VAZO entered Yonghui Supermarket in 2020. Relying on large retail giants for channel coverage is a breakthrough for VAZO in expanding new retail models.

Industry insiders believe that from offline specialty stores, electronic cigarette collection specialty stores, pop-up stores, to channel cabinets and unmanned retail scenarios, electronic cigarette companies are building a diversified sales matrix offline and have developed various offline channel layouts. However, regardless of how they layout offline, funding support is necessary, which will inevitably eliminate some smaller brands with insufficient strength.

Shen Meng, director of Xiangsong Capital, stated, "The investment in offline channels is much greater than online, and the management difficulty is also higher. Therefore, in the future, whoever occupies more offline channels and has higher channel efficiency will have a competitive advantage."

However, winning the offline channel battle is not simple for brands, as strengthening monitoring of offline channels to protect minors from tobacco harm is a primary issue facing all electronic cigarette brands.

On June 18, the State Administration for Market Regulation and the State Tobacco Monopoly Administration jointly released the "Special Action Plan for Protecting Minors from Tobacco Harm: 'Guarding Growth'" (hereinafter referred to as the "Plan"). The Plan emphasizes increasing the crackdown on tobacco-related illegal activities, focusing more on prevention, combining treatment and comprehensive governance, and effectively protecting the healthy growth of minors.

In response to the protection of minors, various brands are strengthening monitoring in offline channels. According to the unmanned retail cabinet, "Unmanned retail scenarios are close to the consumption habits of young people, and the cabinet will use facial recognition to verify the consumer's age for online payment. Through a unified ordering system, cabinet operators can monitor product sales in real-time via the cloud."
Ao Weinuo, secretary-general of the Electronic Cigarette Industry Committee of the China Electronic Commerce Association, stated in an interview with Beijing Business Daily that whether in intellectual property or industrial supply chain, China's electronic cigarette industry has great potential. As cross-industry cooperation unfolds, other industries will also integrate with the electronic cigarette industry, which is beneficial for promoting sales. Technological changes can provide more possibilities for electronic cigarettes, such as the development and upgrade of atomization technology that may be applied in future medical and health care fields.