lami introduces new policy: cap store count at 10,000 and reject destructive competition

LAMI has released a new policy, promising to open no more than 10,000 stores.

The battle among thousands of vape brands is nearing its end. The companies that were going to fail have already failed, and those that remain are basically the ones with real strength. LAMI is one of them.

LAMI “has never deliberately described itself from the perspective of ‘electronics,’ but has continuously strengthened the market’s perception of itself at the level of ‘smoking.’ When people mention it, they talk about ‘flavor, e-liquid, how satisfying it is, and exclusive tastes that others don’t have.’”

At present, several leading benchmark companies in the industry—RELX, MOTI, YOOZ, Bode, and others—are all operated by private capital. But in China’s enormous tobacco market, who are the ultimate players and decision-makers?

Naturally, it is the State Tobacco Monopoly Administration and the various local tobacco companies under its management. Shennong Tobacco Technology and the Wuyeshen Group behind LAMI belong to the state-backed tobacco team.

丨The conflict between brand owners and store operators

Recently, media reports of conflicts between store owners and brands have become more and more common, from “Did YOOZ discard its partners after using them? A Hubei provincial distributor’s tearful accusation” to “Causing a scene with flyers, former FLOW provincial distributor escorted away by staff,” and many more besides.

LAMI believes: “Many brands wave the banner of high subsidies and turn the most basic task—opening stores—into a profitable subsidy-harvesting operation. There are quite a few people whose only goal is to collect subsidies: today they open this store to take the subsidy, and after getting it they move on to another brand. In such arrangements, both the brand and the store are essentially misleading each other, each waiting to see who can cut the other down first.

There is no real business model to speak of, and no possibility of long-term shared development. It seems as if all you need to do is shout a higher subsidy than everyone else to dominate the market. But anyone with business sense knows this goes against economic principles. Offline chain stores do not have network effects; their marginal returns actually decline. In other words, opening two stores may make money, but opening five may lead to losses. Blind reliance on subsidy-driven marketing will only attract more rent-seekers with no operational foundation. Once this wave of opportunists exits, the brand itself will collapse with a crash.”

Clearly, LAMI believes the subsidy war goes against market rules. Opening more stores may be good in the short term, but in the long run it is not good for the brand.