Which Vape Brand Is Best? A Senior Investment Banking Brand Analyst Gives the Answer

 Recently, Jingdong commissioned an analysis of which brand of e-cigarettes is better in the e-cigarette market. The Baidu search data really scared me. Almost all of the top few were bought with money and have no reference value at all. With so much false e-cigarette brand ranking information, it is estimated that it will mislead Many new friends who want to choose an e-cigarette brand to get started, today I want to talk about e-cigarette brand competition based on the length of the e-cigarette competition track.

  The category represented by the three words e-cigarettes is so big that everyone has a different cognitive understanding of it. Just as a friend of mine left a message below a photo of Safin brand inhaled vitamins in my circle of friends: Inhaled vitamins? Not an e-cigarette? I suspect that in his understanding, the definition of e-cigarettes includes the dividing line of whether they contain nicotine. Indeed, it is called e-cigarettes, but it has nothing to do with cigarettes.   What does this mean? Whether a concept is clear or not greatly affects the brand's marketing direction. The unclear historical concept that has been used has led to a high degree of dispersion in cognition, further affecting the issue of brand positioning, and which line are they competing in?   The category is large, the industrial chain is long, and the ability to expand is strong, so the competition track of the e-cigarette industry itself has become very long. Coupled with the highly discrete consumption perceptions in the contact growth stage of top-grade products, this has caused us to feel about the current development of the e-cigarette industry: a string of rapidly growing numbers, a lively and prosperous scene, but it is really confusing and unable to see the direction.   Long tracks are a good thing, which means that every segment and segment has the possibility of creating a big brand. There are many entry points to choose from, and there are not so many life-and-death situations. But conversely, each brand can focus enough on a certain link, but for a common target group, the cost of information to receive is high. Who will tell him how to choose e-cigarettes? You should know that the most basic role of a brand is to reduce the trouble of choice and reduce the cost of information connection.   Who is the number one brand of e-cigarettes? Or if the scope is even smaller, who is the first in the country? Perhaps it is difficult to have any centralized consensus in the answer. Of course, from a corporate perspective, it is easy for us to rank one, two, three, two, two, but from the perspective of the company's production capacity and sales, but brand evaluation on the consumer side is not so easy.   Opportunities are everywhere, but few people dare to choose a path ALL IN. This is the feeling of being an outsider. Of course, there are also wait-and-see views from insiders.   A while ago, I had dinner with friends from IDG and talked about domestic e-cigarettes from IQOS. He said that there is a lot of capital outside the venue waiting and judging. He wants to invest based on trends and realistic figures, but he is really unsure and doesn't know what to invest in, who to invest in, and when the policy will be implemented.   Branding is difficult! But that doesn't mean that you can't fight, and it doesn't mean that there is no opportunity to make the chaos simple and clear. This first requires the transformation of the company's strategic thinking. There is a cognitive gap that needs to be bridged between building a brand and building a factory. For example, the first step is to give your brand an easy-to-remember name……   Taking the opportunity to finish the chat in one breath, I republished the content I had written about e-cigarettes and found that whether it was the issues discussed last year or three or four years ago, it still seems worth discussing today. One is from last year and the other is from 2014. There is no need to read the ones I have read. There are so many words.   August 2017   5 questions about the future development of e-cigarettes   The e-cigarettes we want to talk about this time refer specifically to electronic atomizing cigarettes. Regardless of whether people in the tobacco industry are concerned or optimistic about this category, the rapid expansion of domestic e-cigarette consumption in recent years is a fact. A while ago, Deep Blue contacted several companies manufacturing e-cigarettes in Guangzhou and Shenzhen. In addition to the continued growth in export volume, domestic shipments have increased sharply in the past two years. The increasing number and scale of large-scale exhibitions, the rapid expansion of the number of e-cigarette counters in various cities, the visible users on the streets, and the crazy fancy performances of steam players in the circle of friends can all give us an insight into the growth of the e-cigarette market. Intuitive perception and judgment.   On the one hand, the emergence of domestic demand has enabled manufacturing companies to see greater market opportunities and broader profit margins for domestic sales, and have begun to shift their strategic focus to domestic brand operations; on the other hand, the national team has developed products under clear policy requirements. R & D and reserves are almost in shape, waiting to be queued to enter the market. Although the emergence of demand has become an objective reality and more participants have entered the market, for such a new category, or such a new species that is still unclear and has huge possibilities of mutation, all participating teams It is necessary to put aside empiricism and systematically think about and study the underlying logic that supports the development of this new species.   1. About category awareness   I don't know what kind of title and explanation foreign countries have for e-cigarette. In Chinese context, the three words e-cigarette represent the most generalized category cognition, namely, cigarette with auxiliary electronic equipment, electronic atomized cigarette with professional subdivision and heated non-burning cigarette represented by IQOS belong to the same category, but in fact, there are essential differences between them.   Domestic users first experienced Ruyan's conceptual awareness education, and then it was the overwhelming round of TV advertisements that widely promoted the term e-cigarettes as a smoking cessation artifact. If the earliest electronic aerosolized cigarettes retained the content of nicotine in tobacco oil due to the nicotine replacement therapy they followed, so they can still be related to traditional cigarettes, then when you find that the largest amount consumed on the market today does not contain nicotine ingredients. It is just a large category of fruit-flavored, mint-flavored tobacco oil. In fact, this thing has nothing essentially to do with cigarettes, only the smoking action.“”   To put it simply and crudely, the combination of atomization equipment and tobacco oil is basically the same thing as the humidifier, aromatherapy machine in your home, or atomization therapy in the hospital, except that no one wants to call it a cigarette. When you have nothing to do, take the initiative to puff a few puffs into your mouth and spit out a few tricks.   Therefore, the emergence of a new species of e-cigarettes has caused a split in people's understanding of the concept of smoke in people's original brains: it is not called smoke, which is divorced from the physiological addictive attributes of smoke but is attached to the ritual of smoking. Sense, category name that opposes the harmfulness of smoke but is inseparable from smoke“”……   Customers 'minds hate chaos. Although no one can explain this twisted state, it must exist. Then, any team that can solve this chaos will have a chance to win more customers.   2. About category value   Consumers 'minds are not easy to change. The simple category recognition of e-cigarettes already exists, but it does not mean that it is impossible to redefine a category. Cars are not called horses on wheels. This possibility requires the support of qualitative consumer research. First of all, we must understand what this thing and some related concepts are in the minds of consumers. Want to understand what the category value of e-cigarettes is? What aspects of customer needs are they meeting?   I saw a report a while ago that the e-cigarette industry association held a meeting. The general idea was to unify concepts. In the future, no one is allowed to publicize e-cigarettes and smoking cessation effects together. Deep Blue seems that this is such an important meeting and can be regarded as a key decision for the industry to save itself. What types of consumer goods are sold for the purpose of shrinking the market for themselves? It seems that 350 million smokers are potential customers to quit smoking, but in fact, what proportion of smokers are willing to quit smoking? And this cake is still selling smaller and smaller. If smoking and smoking are of value, then this market size can directly see the end.   The category value of e-cigarettes must not lie in quitting smoking, but where is it? There is no final conclusion at present, and this is a big topic that market participants need to study together. At the same time, because this is a new species that continues to evolve, there is more space and the possibility of redefinition for the mining of category value. For example, some companies are already developing cigarette oil containing Chinese herbal ingredients with health effects, which is no different from the aerosol treatment in hospitals. At that time, e-cigarettes may really not be e-cigarettes. For another example, it is unclear whether the interest lies in atomizing equipment or smoking oil. As species evolves, this thing may become similar to smart electronic products in the future.   Based on some basic research and observations I have personally done, when e-cigarettes are separated from nicotine, this thing will ultimately become more like an adult toy, which is like putting two walnuts in your hand and rubbing a string. The meaning is similar. Judging from the consumer groups they currently come into contact with, many people are indeed playing with this thing, rather than smoking like cigarettes.   3. About who is consuming   It is undeniable that many consumers of e-cigarettes currently regard it as a tobacco substitute, demanding its low harm and aid in quitting smoking. Just as many consumers of e-cigarettes are women, and the users are their husbands or fathers. But what we should pay more attention to is the new group accompanying this new species.   Among the group composition of e-cigarettes, there are both smokers and non-smokers. When this group of people regard e-cigarettes as toys or trend symbols in the subcultural circle, this thing really has nothing to do with smoking, nor has it anything to do with quitting smoking. The consumer group of e-cigarettes is forming its own steam culture. Active communities can be searched on many social platforms. An offline store, a live broadcast room, and a steam competition have become the social media for this niche circle.   The current niche does not determine the size of the potential market. Think about how much mass popularity stems from the tipping point created by small circles. You can find many cases from "Tipping Point" and "Super IP". So for those e-cigarette companies that want to shift their focus to branded operations in the domestic market, what they must do at this time is to find out who is consuming e-cigarettes and dig deep into their individual and group value points for e-cigarettes. This will help see opportunities for niche groups to spread to the public.  #p #Pagination Title #e # 4. About contact and experience scenarios   The characteristics of consumer groups are directly related to the differences in product contact environments and purchase channels. Currently, offline specialty stores and e-commerce are the main sales channels for e-cigarettes. Traditional cigarette retail terminals currently have basically no connection with e-cigarette production channels. If we understand the previous question about who is consuming, then following the trajectory of crowd behavior, we can imagine what other usage and experience scenarios of e-cigarettes have not yet been explored, and these scenarios can directly act as a contact medium for the product. Access to new users.   5. About the entry of the national team   Based on intuition alone, anyone can imagine that the industry's channels and million-level terminal resources are the essential difference between the national team and private brands at the starting point. But we cannot reverse and assume that these resources can truly smoothly match product sales and scale expectations. If the actual results of consumption surveys show that there is no strong correlation between smokers and e-cigarette categories, then under the influence of existing category awareness and consumption habits, the scale and crowd traffic resources owned by offline cigarette retail terminals will be difficult to convert into sales of e-cigarettes.   However, there are other possibilities, that is, the national team relies on administrative power to monopolize the production and sales of nicotine-containing tobacco oil, which truly conforms to the strict category of new tobacco products and guides a new tobacco consumption habit for smokers. After all, the latest FDA research report pointed out that there is no evidence that nicotine is the main factor in cancer. It should be noted that under the current explicit rigid demand of smokers for harm reduction and addiction reduction, nicotine-containing e-cigarettes have predictable market space and truly have the opportunity to make up for the decline of traditional cigarettes as cigarette substitutes. At the same time, I also firmly believe that the national team has sufficient competitive advantages in back-office research and development. On top of solving the underlying interest demands of reducing harm and relieving addiction, the experience creation of taste must also have incomparable advantages that others cannot match. Moreover, the endorsement of the national team, enterprises and brand credit is also a key point to impress early adopter consumption.   About the ending   Whether it is a national team or a private brand, it can be said that there is no mature reference paradigm for the new category or new market of e-cigarettes. Both camps first need a transformation in brand operation thinking: the national team cannot use the idea of making cigarettes to make e-cigarettes, and private e-cigarette enterprises need to access professional management and marketing concepts from manufacturing factories to independent brand operations. Whether you are waiting to enter the market or are investing on a large scale, one question you need to ask yourself at present is: What group of people are e-cigarettes for, and what value are they satisfied in what scenarios? Try it, can you answer clearly?   In the early stage of a category contact growth, all companies can receive the dividends of growth driven by the increase in natural sales from consumer groups. The current opportunity lies in who can be the first to accurately find in the early extensive and chaotic development. Category value and brand positioning, combined with open marketing methods, will have the opportunity to achieve upgrading and gain the greatest dividends as a category market pioneer.   August 2014   Talking about the e-cigarette market   Director Ling proposed in the report of the national conference: We must grasp the development trend of the international tobacco market, attach great importance to the research and development of new tobacco products such as heated non-combustible cigarettes, e-cigarettes, and mouth-cigarettes, and regard it as a strategic and overall issue related to the sustainable development of the industry. For major issues related to the sustainable development of the industry, the National Bureau has established a new tobacco products leading group with the main leaders as the team leader and the leaders of each bureau as the deputy team leader to coordinate the advanced planning, system design, major special projects and orderly promotion of new cigarettes. rdquo; This is the first time that the National Administration has regarded new tobacco products as a major topic. From the wording of the report, we can feel the importance it attaches to this field from a strategic perspective.   Why choose e-cigarettes?   In my personal judgment, among the types of products mentioned above, the systematic research and promotion work on e-cigarette products may be relatively advanced. This interpretation is based on the following three points: First, in the international tobacco market in the past two years, the development of e-cigarettes has been a highlight, and the total scale has expanded rapidly, especially in the United States and Canada in the North American market, where growth has doubled. Several major international tobacco groups (companies) have set foot in the field of e-cigarettes, and mergers and acquisitions related to e-cigarettes occur frequently. Financial and market research institutions have paid enough attention to the development of the e-cigarette market to judge the trend of the e-cigarette market and guide investment in this field. There are reports that the total retail sales of e-cigarettes in the United States by 2017 may exceed 10 billion US dollars. One of the reasons for the rapid growth of the e-cigarette industry in some regions in the international market is the strict smoking ban measures. Although domestic legislation and actual implementation on smoking bans in public places are still quite different from those in those countries, when the domestic traditional cigarette market is facing ceiling pressure, the development of new tobacco products, including e-cigarettes, is defined as a strategic, overall and long-term major issue, that is, it focuses on effectively supplementing the industry's future income and profits. International tobacco giants are at the forefront of product research and development and sales. As a catch-up goal, based on the development trend of e-cigarettes in the international tobacco market, e-cigarettes may be the first breakthrough in the promotion of new domestic tobacco products.   Second, the production and manufacturing of e-cigarettes has formed a mature industrial chain system, and there are almost no production and manufacturing barriers (patent barriers). Moreover, my country is the world's largest manufacturing base for e-cigarette products, exporting to the global market. There are reports that domestic e-cigarettes exported from Shenzhen as a manufacturing base account for more than 90% of the world's total. Therefore, domestic tobacco companies have comparative advantages in procurement costs when entering the e-cigarette market, and local-based industrial cooperation also has low barriers and broad prospects.   Third, two or three years ago, through direct TV sales and online shopping platforms, some domestic e-cigarette manufacturers once collectively launched continuous and intensive advertising bombardments on local satellite TV stations across the country, and have initially realized that the new thing of e-cigarettes is accessible to a wide range of audiences. Cognitive introduction. Moreover, as citizens 'health awareness increases, more and more smokers who are willing to quit smoking have begun to pay attention to e-cigarette products, and the initial advertising awareness has begun to shift to actual consumption. It can be said that the consumer demand for e-cigarettes in the domestic market is gradually emerging. Compared with other new tobacco products, e-cigarettes are much better in terms of product awareness and acceptability.  #p#Pagination Title #e# Rapid response from private enterprises   Private enterprises entered the field of e-cigarettes early. Based in Shenzhen, they have gathered a large number of export-oriented manufacturing enterprises, most of which are extended businesses of electronic technology companies, because the manufacturing principle of e-cigarettes determines that there are no technical barriers. With the expansion of e-cigarette sales in the international market, these domestic manufacturing companies have the most realistic understanding of the development trend of e-cigarettes through the rapid growth of export orders received, which has also stimulated some companies to increase investment or new companies to get involved in e-Cigarette business. The main factor.   Public information shows that there are many listed companies in China involved in the field of e-cigarettes. Some of them have their main business involving the traditional tobacco industry chain and seek transformation through the layout of e-cigarettes. Yiwei Lithium Energy is a lithium battery manufacturer and currently has full battery orders for e-cigarette manufacturing. Last year, Shanghai Lvxin (a supplier of cigarette packaging materials) and Dongfeng Co., Ltd.(a core enterprise of mid-to-high-end cigarette label printing) jointly established Lexin Zhenjian Electronic Technology Co., Ltd., which mainly specializes in portable functional atomizers and disposable micro atomizers (e-Cigarette core components), e-cigarette appliances, etc. R & D, production and sales. Firearms e-Cigarettes are mainly engaged in the research and development, production and sales of e-cigarettes, and are currently the largest e-cigarette manufacturer and producer in the world. The actions taken by these companies are based on judging the trend of the e-cigarette market, and the other is to seek new business growth points by focusing on the impact that may have on traditional smoking-related businesses under the pressure of smoking bans. At the same time, they hope to use resources such as high-quality customers accumulated by traditional smoking-related businesses to help develop new businesses. In addition, it is also worth noting that these companies that are mainly engaged in tobacco-related business must also have a keen sense of tobacco industry policies.   Regulation and legislation come first   At present, the domestic e-cigarette market is in an irregular state at the beginning. There is neither product classification nor unified production, safety standards and regulatory legislation. It is in a fully open gray area. Not only domestically, although the U.S. e-cigarette market has grown rapidly in the past two years, it also faces potential policy risks and uncertainties. There is currently no comprehensive e-cigarette supervision plan, and there is no final conclusion on product characterization and tobacco control legislation. However, under the monopoly system, the National Bureau proposed to include e-cigarettes in major research topics. Compared with the current private enterprises in the domestic market investing in e-cigarette products, once the e-cigarette national team is ready to intervene in the market, there will be more room for discussion on the supervision and legislation of e-cigarettes. Regardless of the outcome, one thing that is certain is that supervision and legislation will definitely be the first institutional preparations, because this is directly related to issues such as game rules, market dominance, and advertising restrictions.   Judging from the information collected so far, the licensing and regulatory status of e-cigarettes among countries shows great differences, because there is still no unified conclusion on the basic issue of how to characterize the product. Classify it into general consumer goods, electronic products, drugs, medical devices or tobacco products? This new thing leaves these issues to market regulators. In addition to the State Tobacco Monopoly Administration, the actual formulation and implementation of supervision and legislation may also involve other government departments, such as the Food and Drug Administration. The lack of clear characterization means that it is not bound by existing laws and regulations. In terms of safety, there are currently no relevant national or industry-level standards. Some are just some safety tests commissioned by inspection agencies by manufacturing companies to conduct according to certain standards. For example, Beijing Cyberport Ruyan Technology Development Co., Ltd.(owner of the Ruyan e-cigarette brand) displayed a report called Poni Test on its official website and Tmall flagship store, and also claimed that it was the only nationally certified e-cigarette manufacturer.   According to the current Tobacco Monopoly Law, e-cigarette products are not within the scope of products specified by the law. This is where the space for policy discussion and imagination mentioned above lies. The key issue of supervision can be simplified to: characterize e-cigarettes as tobacco products or non-tobacco products? If it is the former, then the national e-cigarette team will have absolute initiative in entering the market, but the disadvantage is that the practice of relying on administrative orders to build market barriers may be criticized. If it is the latter, it means complete competition between the national team and private enterprises. It is clear from the small notes that what the report proposes is a new type of tobacco products. It seems that they are currently treated as tobacco products, but an attribute is only added. Does this mean that it is more likely to classify tobacco products into supervision? Or while amending the Tobacco Monopoly Law and incorporating it into supervision, it also seeks a balanced strategy in market operation because of the attribute of new type and allows private enterprises to produce and sell with conditions? All of this is just speculation at present.   competition and cooperation   “The sentence that the market plays a decisive role in resource allocation will become the keynote of discussions on market-oriented reform in a long period of time. The reform of state-owned enterprises and the relationship between state-owned enterprises and the private economy will also be the focus of public attention. China's tobacco under the monopoly system is also continuing to undergo market-oriented reforms. Therefore, judging from the current industry reform and the overall environment of the overall economic system reform, in the supervision and legislative process of a new thing such as e-cigarettes, it is very unlikely that it will rely on one-size-fits-all administrative means to set up barriers for private enterprises to enter the market. However, it is highly likely that the balanced strategy mentioned above will be adopted to allow private enterprises to participate in market competition under common standards and regulations. Whether the national team relies on channel monopoly to obtain monopoly benefits, or competes under open multiple channels, there is definitely no complete relationship between the national team and private enterprises, but there are many possibilities for cooperation.   The most realistic possibility of cooperation is processing upstream of the industrial chain. E-cigarette products can basically be divided into two parts: mechanical parts and cigarette bombs. The advantage of electronic technology companies in extending and transforming into e-cigarette products lies in the production and manufacturing of the original mechanical parts. Relying on mature production and manufacturing systems, large-scale production can be achieved. As the core of pharmacological functions, the research and development of cigarette bombs involves many technical and safety details, and may also become the key to affecting brand competition. However, China Tobacco Group can easily carry out the research and development of cigarette bombs relying on existing technology centers. Therefore, it is highly likely that in the future, China Tobacco will focus on the research and development of high-profit cigarette bombs with the core of science and technology, and hand over the processing and manufacturing processes to existing e-cigarette production companies to achieve outsourced processing cooperation. This is the most efficient. A cooperation model.   What may also arise is channel cooperation. If e-cigarettes are to be included in the supervision of the Tobacco Monopoly Law in the future, but private enterprises are allowed to manufacture, then the existing 5 million cigarette retail terminals in the industry are the only channel for these private e-cigarette brands to achieve sales, even without supervision, these companies will definitely want to intervene in this channel. By then, the industry's many years of network construction will enable new business expansion in addition to the traditional cigarette business in the industry, realize the transformation to a service provider with platform advantages, and provide cooperative enterprises with warehousing, distribution, sales and other services of e-cigarette products. Give full play to the advantages of the network. In terms of the international market, the sales terminals of e-cigarette manufacturers include pharmacies, convenience stores, online shopping platforms and self-operated specialty stores. When discussing the domestic market environment and trends, the monopoly system is a background that must be considered. The uncertainty of e-cigarette regulatory policies also prompts us to add a "if"in front of us when discussing channel cooperation.   Capital cooperation is a possible way to deploy long-term benefits through strategic investment based on judging the development trend of e-cigarettes. The report of this year's national conference focused on pursuing the potential of maintaining and increasing the value of funds, and the entire industry has basically completed the establishment of provincial-level investment company entities. ldquo; Deep Blue Tobacco Think Tank WeChat Public Platform once had an article that sorted out the diversified investments in the industry. The main investments involved industries such as finance, real estate, medicine, tourism and cigarette label printing and auxiliary materials related to the industrial chain. Since e-cigarettes are to be studied as a strategic topic, while intervening in the market, companies that participate in existing e-cigarette concepts through capital cooperation are the same as companies that currently invest in tobacco-related businesses. They are both deeply involved in the industry through capital. If you invest in the chain, you can have better income expectations in the general trend of the development of the e-cigarette market. When traditional cigarettes are facing development bottlenecks, China Tobacco companies directly intervene in the e-cigarette market or invest in listed companies related to e-cigarettes. For example, the tobacco oil and ecs e-cigarettes jointly developed by China Tobacco Group and Firearms E-Cigarette have the same starting point. This is regarded as an effective supplement to the industry's future income and profits.   Relevant information:   The total sales of e-cigarettes in the world were US$910 million in 2010, US$1.28 billion in 2011, US$1.8 billion in 2012, and more than US$2.5 billion in 2013, with an average annual growth rate of about 40%. Among them, in the U.S. market alone, the total sales of e-cigarettes in 2013 exceeded US$1 billion, nearly double the previous year. mdash; World Tobacco Development Report 2013   Currently, the global e-cigarette market is about US$2 billion and is expected to reach US$10 billion by 2017. mdash; Business Week   Altria, the parent company of Philip Morris USA, will expand its e-cigarette business by acquiring Green Cigarette for $110 million (81.5 million euros).   Vapor is the leading e-cigarette supplier in the United States. It has more than 60000 sales points around the world and a market penetration rate of 10%. Its brands include Krave, Fifty-One, Green Puffer, Americig, Vapor-X, Alternacig, Vapur, etc., of which Vapur accounts for 70% of the market share in Canada.   Altria Group said it plans to promote its MarkTen e-cigarette brand in the United States in the second quarter of this year.   In 2012, Lorillard acquired Blu, a leader in the U.S. e-cigarette industry, for US$135 million and vigorously expanded its sales to 125,000 stores.   In 2013, Lorillard Tobacco Company increased its global market share to 49% after acquiring the British high-end brand SKYCIG.   In 2013, British American Tobacco (BAT) launched the Vype brand e-cigarettes to the British market.   Imperial Tobacco's Puritane brand e-cigarettes began being sold at Boots pharmacies in the UK on February 24. The Puritane brand e-cigarette was newly developed by Imperial Tobacco subsidiary Fontem Ventures and has passed safety reviews and rigorous testing.   Some analysts predict that by 2021, Renault America's revenue from the e-cigarette market will reach US$4 billion, slightly exceeding the revenue of traditional cigarettes by US$3.9 billion.# p#pagination title #e#