What Is the Outlook for the Vaping Market?

What is the prospects of the e-cigarette market？At the end of 14, I opened an engineering cost company and was still a veteran smoker with two packs a day. In 15 years, I invested in an e-cigarette physical store owned by my current partner Wang Heyu. Since then, we have reached a cooperation with Brewell in the United States, the world's largest producer of e-cigarette smoke, in the form of a branch in China. In one year, we have brought the Brewell brand from zero to the number one import volume that year, and successfully created multi-layer hit products that deeply influenced the development history of China's e-cigarettes. So far, we have directly or indirectly helped 18000 people successfully use e-cigarettes instead of cigarettes. Today, I would like to share with you my thoughts on e-cigarettes so far in my career and the products our team wants to build together in the future. Welcome to bid.

1. The past and today of e-cigarettes

E-cigarettes were invented in 2003 by China pharmacist Han Li based on nicotine replacement therapy recommended by the International Health Organization. In 2004, Ruyan brand e-cigarettes landed on the CCTV TV Shopping Channel as a functional product with the main effect of smoking cessation. At that time, they grabbed nearly 100 million yuan in sales. However, because they excessively exaggerated the smoking cessation function of e-cigarettes, in 2008, after being exposed by CCTV that its smoking cessation effect was falsified, sales fell sharply and gradually turned to export. The launch of e-cigarettes in European and American markets has also aroused very strong responses.
The first scene of e-cigarettes appeared

The popularity of foreign markets eventually led to the return of e-cigarettes. In 2014, the emergence of e-cigarette physical stores appeared in China. In this bud, the definition of e-cigarette products is no longer the health care product concept Ruyan had in those days, but a fashionable personal consumer electronic product that advocates healthy living. We call this wave an upgrade in the consumption of traditional tobacco products.

Since 2017, the sales volume of two major categories of e-cigarette market in China, heating non-burning e-cigarette and smoke-oil e-cigarette, has exceeded RMB 20 billion. It can be said that we have come to the eve of the outbreak of domestic e-cigarette market.

Xiao Bian: Let's keep a secret here. If you want to know more about the popular science introduction of e-cigarettes, please see the section Q A at the end of the article. Everyone is also welcome to leave a message to express their views on e-cigarettes and their experience with using them ~

Stars seem to like it very much

Although the e-cigarette industry is in a promising situation, there are still problems in the development process of not being seen, not being sold well, and not being affordable. This is also an opportunity of the times to create a firearms e-cigarette e-cigarette brand. I personally summarize the current problems in the domestic e-cigarette market as the contradiction between the people's growing health needs and the abnormal development of e-cigarette retail.

Not seeing is reflected in less. If you haven't even met a user, there will naturally be no demand. Who knows if this thing will work if I don't suck it into my mouth?

Bad buying is reflected in chaos. The current retail method does not allow you to touch or try it. After you buy it back, there is no way to explain if you leak oil, squeeze oil, and you can't smoke out;

The inability to afford it is reflected in the high price. You can buy one for three to four hundred yuan, but now you can't buy anything for one thousand or eight hundred yuan in a physical store. On average, it's equivalent to spending 40 to 50 yuan a day, which is much more expensive than smoking.

The market has created this kind of atmosphere for e-cigarettes: I can't see them because I NB, and you don't want to use them; if I can't buy them well, my things are like this, if you like to buy them or not; if I can't afford them, I'm sorry, we don't accept them for poor people. This seems to me to be a way of doing things that goes against values. The products I want to make are to benefit the people of the country. They are e-cigarettes that can be seen, bought and used.

Let's start with a profile picture of firearms and electronic cigarettes

2. E-cigarettes that follow the mass line

Now that I have made the choice, I want to let the extremely cost-effective e-cigarette products find users directly, quickly and at low cost.

The picture is not as beautiful as the real thing

In terms of products, we have integrated the world's top e-cigarette equipment and tobacco oil suppliers. In fact, even on the basis of leveraging the world's best quality e-cigarettes supply chain, it took nearly half a year for firearms e-cigarettes to go from research and development to market. Especially in the blending of tobacco oil, it has made more than a thousand attempts. In fact, the current production technology of e-cigarettes has actually matured. All our purpose is to create an ultimate experience product with a truly milestone significance.

In terms of pricing, e-cigarettes should benefit more people. Compared with the common gross profit of 70 - 80% in the industry, we chose to directly lower it to 30%, and directly reduce the retail price of e-cigarettes to less than 50% of competing products. The future cost of using the flagship firearms e-cigarette product will be reduced to less than 20 yuan per day, while the other product will achieve the ultimate cost performance ratio of 9 yuan. Therefore, the positioning of firearms and e-cigarette brands is to follow the mass line.# p#pagination title #e#

In terms of promotion and channels, what we are willing to do is let the goods find people and let the experience find people. Compared with other brands, they are still sinking through the traditional channel method of recruiting agents to let users find them (after all, the overall supply chain system of the domestic retail industry is far less developed than that of European and American countries, so the success cases of some foreign e-cigarette brands do not have Too much reference value). After our thinking, instead of integrating various fragmented domestic channels little by little, we might as well create a new channel. To this end, we have created a new profession called e-cigarette experiencers. They can work part-time, work on WeChat, or even be Didi drivers. As long as they are willing to share firearms and e-cigarette products with friends or even strangers, they can use the sales response module of the Weixin Mini Programs Mall to get the corresponding commission. In the end, the experiencer can quickly complete the experience service and sales without having to pay for the goods, thereby quickly establishing a brand and producing a fission effect.

Beauty is really important

3. Firearms, e-cigarettes and our future

At present, all series products of our flagship model have been completed, which perfectly solves the problems of oil leakage and poor tobacco taste experience common to all products on the market, and has received very good feedback from customers.

In terms of channels, several of my partners and I recently experimented as e-cigarette experiencers in the form of Didi Shunfeng in Shenyang and Dalian. In the absence of particularly intensive orders, nearly 20 new customers have been transferred to physical stores, and the feasibility has been initially verified. In the next 18 months, firearms e-cigarettes hope to enter an explosive growth period and use a bottom-up approach to quickly build brands. As our BD, the e-cigarette experiencers profession can expand the recruitment of more than 50,000 e-cigarette experiencers across the country and achieve full coverage of first-tier and second-tier cities in China. Based on the current 3 million e-cigarette users in China, we hope to create 500,000 e-cigarette sticky users, with annual sales reaching 2.5 billion yuan. This figure may sound a little uncertain at first glance, but compared with the 1.5 trillion tobacco consumption market, the ceiling of domestic e-cigarettes is actually high enough, so our ambitions are also big enough.

Finally, we are now in the angel round of financing and plan to raise 4.5 million yuan and sell 15% of the shares for product mass production, channel promotion and team building. I account for 75% of the current shareholding structure, and the other three partners are 16%, 5% and 4% respectively.

It is a great honor to share my project with you here today. Everyone is welcome to join us, ask questions and debate. Of course, it is also best to share some valuable opinions.

　　Q&A

Q1: May I ask Brother Sijun, what does the name Firearms E-Cigarette mean? If you take the civilian route, what is the unit price?

　　A1：This Saves Lives。

The customer unit price is as low as 9.9 yuan for one-time electronic cigarette products as extremely cost-effective. The flagship product mainframe is priced at 99 yuan, and the price of cigarette consumables is about 35 yuan, which can meet the two-day usage of users with a pack of cigarettes a day.

Q2: Do you produce tobacco oil yourself? How to tell whether the cigarette oil is good or bad? I smoked e-cigarettes for a while and suffered from pharyngitis. I didn't investigate the environment or climate, or did I smoke bad?

A2: There are professional suppliers of tobacco oil. We are the only brand in the industry that uses zero-flavor, pure tobacco extract tobacco oil.

Throat discomfort caused by e-cigarette oil may be caused by propylene glycol allergy. The proportion of Chinese people allergic to propylene glycol is still quite high. It is recommended to check the allergen source and use it with caution.

Q3: I would like to ask what is the difference between heated non-burning e-cigarettes and e-cigarettes? How to control national policies?

A3: For products, please see the picture below. I think that e-cigarettes and heated non-burning e-cigarettes are two very parallel markets, both of which are a manifestation of consumption upgrades for traditional tobacco products. From a product level, heating a product without burning is a very low perception for users, because he knows that he is still smoking, so his perception of the whole tobacco has not changed.

In terms of policy, simply speaking, heating but not burning is actually treated as an illegal product in China. Starting this year, the central level has joined forces with local industrial and commercial bureaus and customs to investigate. In the short term, what the central government is paying more attention to is actually the market for heated and non-burning e-cigarette products. It is worth noting that heating does not burn products because some consumables also contain tobacco products, so they must be controlled by the state. Tobacco oil is an e-cigarette, and currently China Tobacco will tend to follow the EU PDD to set relevant testing standards. Last month, China Tobacco has reminded three related new national standards, which is to establish a new national standard for e-cigarette cigarette oil and some technical indicators during the entire atomization process. In the future, we will adjust the products accordingly based on the relevant conditions of the standards to comply with the new national standards.# p#pagination title #e#

IQOS Heating Without Burning VS Plum Smoke Oil

Q4: The price of the fuselage is so low. Where is the optimized profit margin from imported known brands? Why is the price so much different? In addition, if a box of cigarettes costs 35 yuan, there is not much difference between them and products purchased overseas. For consumers, more cigarettes are consumed than cigarettes. How to solve the problem that customers cannot afford them?

A4: The price of the fuselage is low because we divide e-cigarette products into two parts: cigarette rods and cigarette bombs. The electronic cigarette stems are mainly lithium batteries. The optimal use time should not exceed three months, after which the performance of the lithium batteries will decline accordingly. Prices are low. We hope that in the future, products will rely on a cycle every three months, so that users can iterate on their own based on their usage conditions. Then the iteration rate of our cigarette bombs is much higher than that of competing products. The capacity of each cigarette bomb is 2ml (the concept of 2ml is compared to JUUL, a mainstream product in the U.S. market. Its cigarette bomb has a capacity of 0.75ml. There is also a very serious oil leakage problem). The price is three times that of the product. The selling price is indeed the same as JUUL, so my daily cost of using it is actually much lower than before.
Q5: The transformation you mentioned is that these people gave up cigarettes and switched to e-cigarettes?

A5: In fact, there has been no detailed clinical analysis on heated non-combustible products in foreign markets. It can only be said that heated non-combustible products can be shielded during smoking cigarettes because of the series of harmful substances produced by combustion. In fact, in the e-cigarette industry, the main reason why the Ruyan brand first emerged in China and then disappeared was the original propaganda that exaggerated the effect of smoking cessation. The e-cigarette itself was recommended by the International Health Organization to various member states in 1996. Therefore, strictly speaking, e-cigarettes are regarded as a substitute for tobacco, rather than a smoking cessation product with clear functionality. So now we hope that you can use e-cigarettes to reduce the fuel you use to smoke cigarettes, so as to achieve a healthier effect.

Q6: I used to work in channels, and I was still a little worried about easily and significantly lowering prices. Price reduction is a very risky back-to-back fight. From a promotion perspective, micro-businesses also need to get rebates. The more rebates, the more they are willing to push. They all rely on profits to support them. If the profit is less, the commission will be less. Is it really good to play this way?

A6: At present, the domestic e-cigarette industry generally retains 70% to 80% of the gross profit, and even retail stores at the end of the year require merchants to retain 70% of the gross profit. Such a phenomenon is actually very unreasonable. The reason why we believe that e-cigarettes are very successful in European and American countries is because the price of e-cigarettes in the local area is much lower than that of cigarettes.

Our confidence is that we do not sell products through traditional channels. I do not need to pay any fees to agents at all levels during the channel sinking process. I directly use this flat model to quickly build a brand, and then use e-commerce to retain users, so that our sales costs will become very low. Unlike friends who invest a lot of money in channels, price reduction is not a way to fight back, but we want this product to be close to users.

Offtopic: Speaking of financing, I came up with the idea of financing around this time last year. When I arrived in Beijing in November, my understanding of the capital circle was completely pure. I was interviewed by more than a dozen investors by various scammers or by several institutional platforms. In the end, the result is still hit by obstacles everywhere. The only gain is that humans refuse various classic lines in the field.

I know that if the project wants to get money, the founder must grow up first. Although many friends around me have given very friendly help, it is really difficult for me to grasp the key point. When I saw competing products around me receiving financing one after another this year, I was very anxious for a while. It was during the period when I was most confused and anxious that I found the organization.

Today is the tenth day I joined the Yuyuan Gang. What I have gained in these ten days is even much greater than in the previous seven or eight months. I want to express my heartfelt thanks to Lao Wang, the leader of the Fuyuan Gang, and all my colleagues in the gang. Thank you to Brother Yi for creating such a warm platform, and also thank you to all of us who are also walking on the road and sometimes feel lonely here for warming up. No matter whether the final venture is a success or a failure, at least when you recall such an experience many years later, you will be grateful for the days when you fought together.# p#pagination title #e#