Clearing up misconceptions about "Made in China" in the vaping industry

As e-cigarettes become increasingly popular among consumers, especially in developed markets, the demand for e-cigarettes and e-liquids has surged, providing a lucrative opportunity for manufacturers of all sizes entering this emerging industry.

Currently, most e-cigarette hardware and e-liquids on the global market are manufactured by Chinese companies. More specifically, they are produced by companies located in Shenzhen, one of China's fastest-growing cities and a manufacturing hub for a wide range of products, including high-tech electronics. There are thousands of companies in Shenzhen, large and small, supplying e-cigarette components and e-liquids to the global market. Given the city's strong manufacturing economy and the simple fact that e-cigarettes originated in China, this phenomenon is not surprising.

However, these Chinese suppliers face the challenge that Western consumers perceive "Made in China" products as having quality issues and health risks, generally considered inferior to products made in Western countries, such as the United States or the European Union. This misconception affects e-cigarette and e-liquid manufacturers, as consumers are more cautious about "suspicious" products that they directly inhale into their lungs.

"The belief that products made in China are of 'lower quality' is a misconception," said Mr. Zheng, the general manager of Changning Dekang Biotechnology Co., a leading e-liquid manufacturer and producer of DeCloud fruit-flavored shisha, which is made 100% from fruit and contains no harmful oxides, lasting five times longer than traditional shisha tobacco. "We believe that low-quality products are produced in many places around the world, not just in China. However, Dekang and its subsidiaries strictly adhere to European and American standards in production, and our processes comply with GMP standards."

Dekang's e-liquids are manufactured in the company's advanced production facilities located in Shenzhen and Changning, Yunnan, covering over 10,000 square meters. Dekang's quality control standards are the highest in the industry, featuring a "super clean" 100,000-level cleanroom and certifications including GMP, HALAL, RoHS, and CE, registered with the U.S. Food and Drug Administration and the Korean Food and Drug Administration.

"To eliminate misconceptions about 'Made in China' products, Dekang prioritizes quality and safety control; we adhere to our philosophy of using pharmaceutical-grade raw materials and herbal extracts, which we have been doing since Dekang was established in 2003; we focus on user experience and continue to lead the industry," Zheng said. Dekang has also established long-term partnerships with institutions such as the University of South Florida, the University of Geneva, and other research organizations to conduct a series of studies to prove the safety of their products.

Another top e-liquid manufacturer in China, Hengxin, pointed out an interesting fact regarding the misconceptions surrounding "Made in China" products. "I believe this viewpoint has been formed over many years. We all know that China has exported problematic products to Europe and the United States. No one denies this fact. However, we also know that there are long-established companies here, such as Huawei, Lenovo, and Alibaba. More and more Chinese brands are appearing in the international market. I believe that in the future, there will be more well-known Chinese manufacturers or enterprises that will become recognized in the U.S., Europe, and other parts of Asia, proving our capability to produce quality products. In fact, most products consumed in Europe and the U.S. come from China, such as those from Apple or other electronics companies."

Regarding how Hengxin addresses this misconception, Yao said: "For every customer we encounter, we welcome them to visit our company because we believe seeing is believing. Only when you see the production facility can you trust that it is reliable. We know that many manufacturers in the U.S. and Europe produce e-liquids in their bathtubs or in laboratories no larger than a small conference room. Can you believe that just because it is made in a small lab in the UK, it has better quality control than Hengxin's factory? I don't believe that. But this is a conceptual issue; people think that anything 'made in the UK' is better than 'made in China.'"

Hengxin follows ISO9001 and GMP production practices, managing the production process with the highest quality standards. The company's 40,000 square meter factory is equipped with state-of-the-art production and testing equipment to ensure product consistency and production capacity. Every product from Hengxin, including parts, packaging, and raw materials, undergoes at least 10 quality control steps and 5 testing procedures before leaving the factory.

Oplus is a new company entering the e-liquid market, and its vice president and co-founder, Samuel Lau, stated: "In fact, I believe we have very high-quality manufacturers. Safety standards and quality control standards are excellent. I have visited several e-liquid manufacturers in the UK, and they are far from meeting our standards in China."

"They don't even have cleanrooms, but because they are made in the UK, it makes them special," he continued. "It's ironic. Most people think that production in China is like a small workshop. But in reality, people really don't know the changes happening in China; they just assume things."

"We are trying to tell people that we want to maintain very high-quality standards. We strive to prove that where something is made is not as important as how it is made." Oplus even placed a live camera on its website to allow viewers to see the factory, including real-time conditions in its 10,000-level cleanroom.

Support for Chinese-made e-cigarette components and e-liquids is not limited to the manufacturers themselves but also includes other stakeholders in the industry. For example, at the second e-cigarette forum held in Shenzhen on April 9, 2015, Ron Tully, founder of the American TNV Company and former vice president of new projects and public affairs at the National Tobacco Company, stated: "Most e-cigarette devices are made in China and are of good quality. China also produces good e-liquids. Generally, Chinese e-liquids are not problematic, but there is an economic bias related to consumer choice."

Dr. Konstantinos Farsalinos, a physician at the Onassis Cardiac Surgery Center in Athens and a researcher at the University of Patras in Greece, explained the results of a recent study by his team at the forum, stating that they analyzed 159 flavored e-liquids from the U.S. and European markets, finding that 74 of them contained substances safe for use in food but toxic when inhaled, causing respiratory damage. When mentioning that Chinese e-liquids also need research, he said: "Unfortunately, regulators do not favor Chinese products, even though they have no evidence proving that Chinese e-liquids are bad. Or their evidence may still come from the first generation of cigarette-like e-cigarettes. However, we need testing; we need tests to evaluate and compare with e-liquids from the U.S. and Europe."

Both Dekang and Hengxin agree that establishing industry standards is key to addressing misconceptions about "Made in China" products. "The presence of products of varying quality in the market is due to the lack of publicly available industry standards, and each manufacturer's standards differ," said Mr. Zheng from Dekang. "We hope for appropriate standards to help companies consistently produce high-quality, safe products and ensure consumers can use harmless products."

"As an important member of the Chinese e-cigarette industry, what Dekang can do is set and adhere to high requirements and standards, which will also become the benchmark for the industry," Zheng said.

Mr. Yao from Hengxin believes that regulations will also help eliminate small businesses that do not meet industry standards. "There are a few large companies and thousands of small businesses in this industry, and their practices are similar to those of small businesses in other countries. They do not understand this product; they are just mixing liquids in a tank, which is very dangerous."

"These products may all look like liquids, and each product may not seem very different, but you never know what is inside. We have spent nearly ten years understanding this level, and we are completely confident that our products are safe because we know what we are facing, what we are producing, what the processes are, how to avoid contamination, and how to ensure that the flavors we procure do not contain toxic components. However, those small businesses do not have this knowledge; they may purchase flavors from unknown sources and think they are safe, but in reality, they are not."

The good news is that relevant industry members and the Chinese government have begun to work together with e-cigarette associations from other countries to formulate regulations for the Chinese e-cigarette industry, which will soon be introduced.

At the same time, Dekang and Hengxin have established production facilities overseas to better respond to the Western market's demand for their products. In September 2014, Dekang established a 3,800 square meter factory in Bucharest, Romania, equipped with modern automated production equipment and GMP-certified workshops. Dekang's European factory also produces DeTab, a nicotine replacement product that contains no nicotine but provides the same satisfaction and feeling as nicotine liquids when vaporized. DeTab uses the latest e-liquid production technology and only environmentally friendly ingredients. The factory also produces Dekang's European series and Q10 series to meet the requirements of different countries. "There is no doubt that establishing a European subsidiary is to accelerate logistics and provide better service to European consumers," said the president of Dekang. "The e-liquid products we manufacture in China and Europe adhere to the same strict production standards, but with completely different production lines, different characteristics to meet the needs of customers in different countries."

Hengxin's reasons for establishing factories in Poland and the U.S. are similar to those of Dekang—to provide better service to its customers. "Ultimately, where something is made is not important as long as it meets regulations. This is also what customers expect," said Hengxin's vice president. "Some customers want products made in Europe because of proximity or time zone issues; they want to deal with local offices that provide European-made e-liquids. That's fine because we have the technology and expertise. From the first day of factory operation, we have received orders for e-liquids made in the U.S. or Europe."

However, Oplus has not chosen to set up factories overseas. "We really don't want to do that," Lau said. "The advantage of making e-liquids in China is that we have a great packaging supply chain that can provide customers with any attractive packaging, which is more difficult in other countries. Secondly, we are close to the center of the entire industry. Clearly, Shenzhen is the center of the e-cigarette industry. We want to be close to e-cigarette manufacturers and provide them with e-liquids. However, if 'Made in China' becomes a significant issue for us, we will consider building factories in the U.S., UK, or Europe."

As for the future of e-cigarettes in the Chinese market, all three companies share the same view. Mr. Zheng from Dekang stated: "In fact, the Chinese e-cigarette market is growing and has enormous potential. Due to the government's anti-smoking actions, Chinese smokers are gradually seeking better tobacco alternatives. E-cigarettes have become the best choice for smokers. With a large number of smokers in China, there is no doubt that the Chinese e-cigarette market has great potential."

Mr. Yao from Hengxin agrees with this. "The Chinese market is indeed growing, and it is growing rapidly. Once more people understand e-cigarettes, I believe the potential is enormous because the market is too large."

Mr. Lau from Oplus believes that the right marketing strategy will help the industry grow in the Chinese market. "Since 2013, some large companies, mainly from the tobacco-related industry, such as cigarette packaging and tobacco flavor companies, have begun to enter the Chinese market. Those companies have financial and channel advantages, but their experience in e-cigarettes and understanding of this specific market are still lacking. When e-cigarettes finally receive the attention of the right audience through the right marketing strategy, explosive growth will soon follow."