The Hard-to-Explain 'Addiction' of Vaping: How Atomization Technology Affects Industry Development
The Ministry of Industry and Information Technology's consultation on March 22 has yet to reach a conclusion, and the penetration rate of electronic cigarettes in China has not yet broken through "1". Meanwhile, the number of electronic cigarette companies continues to increase, with brand owners offering high subsidies for offline store openings and the homogenization of electronic cigarette products, making it difficult for practitioners in the Chinese electronic cigarette industry to "lie flat" and make money.
Despite frequent actions from the industry committee and major brands expressing their support for policies, the current development situation of electronic cigarettes in China remains unchanged. The development of electronic cigarettes in China is like a fishbone stuck in the throat, and the unspoken "addiction" behind it must return to the product itself, which is harm reduction and addiction relief, truly meeting the needs of smokers. In the long run, the development of electronic cigarettes should belong to the health sector, making the evolution and innovation of vaporization technology crucial.
Intense Competition Makes It Hard to Lie Flat
Recently, RELX sued three electronic cigarette brands: SP2S, EFK, and YMK, for trademark infringement, unfair competition, and patent infringement. Earlier, RELX also sued Weike Technology. The outcomes of these lawsuits are still pending, and the "generic war" in the electronic cigarette industry continues, which is one of the significant manifestations of industry competition.
In the first half of last year, a domestic electronic cigarette brand set the retail price of a new replaceable electronic cigarette vaporizer at 9.9 yuan, which included a vaporizer and a USB charging cable. Surprisingly, the compatible pods for this vaporizer were actually FEELM products.
From a pricing perspective, there is only lower, not the lowest. In March of this year, a leading domestic electronic cigarette brand launched a vaporizer priced at 8.8 yuan, which is slightly better in terms of price and configuration than the 9.9 yuan product. The 8.8 yuan vaporizer is said to have broken the market's lowest price. It claims to use anodizing technology, has a metal shell, and is equipped with a 400mAh large battery for extended battery life, making it a flagship configuration among many mainstream replaceable vapor products. Its vapor control component uses domestically produced 180-nanometer semiconductor technology, and the pods still feature the industry's top FEELM atomization core, with four colors available for users to choose from.
Whether it's 9.9 yuan or 8.8 yuan, anyone with insight can see how much profit margin there is when calculated based on configuration and cost. However, brand owners will claim this is a special offer or a traffic-generating product to benefit consumers. Of course, from a consumer's perspective, the lower the price and the higher the configuration, the better, but such a business model is certainly not sustainable and is not a good business. Politely put, it's a special offer or traffic generation; bluntly, it's a price war.
In addition to compatibility and price wars, the industry's competition also includes high subsidies for opening stores. If you invest 1 billion to open 10,000 stores, I will subsidize each store by hundreds of thousands. The subsidy policies are a performance of one side singing while the other takes the stage, creating a lively atmosphere. There are also instances of "bad performances," with media reports revealing that some brand owners failed to provide adequate subsidies, and franchisees have been found to cheat on subsidies.
Price and subsidies are merely marketing tactics, but they are not the foundation for the industry's and brand owners' development. The long-term development of the industry and enterprises should return to the users and the products themselves.
The Industry Urgently Needs Breakthroughs; Vaporization Technology Iteration and Upgrading is the Main Line
Recently, the emerging electronic vapor brand iRings conducted a street interview, where the interviewees included both young and older smokers. They provided different answers regarding their experiences with electronic cigarettes. Young smokers are often attracted by the rich flavors and stylish appearances of electronic cigarettes, while older smokers find electronic cigarettes convenient to carry and use, but they believe the products are severely homogenized and insufficient in addiction relief.
Through surveys, it was found that quality was the top choice for 36% of respondents, ranking first among user choices. Flavor and safety ranked second and third, with 17% and 16% respectively. Design, price, and technological feel ranked at the bottom three. This survey result aligns with iRings' development positioning, as it has positioned itself as a new vapor technology product rather than an electronic cigarette from the outset. They aim to target high-net-worth loyal users, namely older smokers, through quality and flavor, rather than attracting young users with colors and flavors.
Looking back at the early days of electronic cigarettes in China, they were initially branded as "smoking cessation devices," with a simple yet attractive purpose. The early vapor oil guiding materials were still glass fiber ropes. Glass fiber ropes have the characteristics of high-temperature resistance, strong oil absorption, and fast oil delivery. However, when glass fiber ropes are not saturated with vapor liquid and are exposed, they can easily produce fluff, and "falling powder" into the lungs can be harmful to health, which consumers cannot accept.
Over the past decade of twists and turns, electronic cigarettes have shifted from "smoking cessation" to "smoking replacement." Although they have "fallen from grace," their technology continues to evolve, primarily focusing on the evolution of vaporization technology. Vaporization technology has evolved from glass fiber ropes to resistance wire cotton cores and ceramic atomization cores, which are commonly referred to as traditional cotton cores and ceramic atomization cores, and are still used in mainstream products today.
Traditional cotton cores use cotton fibers as oil guiding materials, wrapped around heating wires. The advantages of oil guiding cotton are its large oil capacity, good oil guiding performance, and a rich and authentic smoke flavor, closely resembling traditional cigarettes. Over time, it has evolved from degreased cotton and organic cotton to the current long-staple cotton. Despite the good flavor, high restoration rate, and large oil capacity of cotton cores, their short lifespan, susceptibility to dry burning, and insufficient flavor stability have limited their application in some products. As the number of small vaping product brands increases and the products become more diverse, brand owners and manufacturers have begun researching alternative materials for atomization cores, leading to the application of microporous ceramic materials and the emergence of mainstream ceramic atomization cores.
Image from Canva
Compared to traditional cotton cores, ceramic atomization cores offer a more delicate and soft flavor, and the inhaled vapor is smoother. Additionally, the stable and durable characteristics of ceramic cores address issues such as dry burning, oil explosion, burnt cores, and unstable flavor that are common with cotton cores. The upgrade to the third-generation ceramic atomization core involves embedding the heating wire into the surface of the microporous ceramic substrate, which is applied in small vaping products on the market.
Although ceramic atomization cores are widely used, this does not mean they are flawless; issues such as uneven heating and high carbon accumulation rates still need improvement. In this regard, the independently developed "μKERATM Dust-Free Ceramic Atomization Core" by the Group can be designed and manufactured to adapt to different viscosities of e-liquids, ensuring a perfect fit between the e-liquid and the heating element. Each atomization core contains over a billion micropores, allowing for rapid oil delivery and solving the carbon accumulation problem caused by uneven heating in traditional products. This ceramic core has reportedly been recognized as one of the best atomization solutions in the electronic cigarette industry for 2021.
Mindset Determines the Path; The Final Destination of Chinese Electronic Cigarettes
Electronic cigarettes are neither completely like cigarettes nor entirely different; they do not undergo combustion, do not produce tar, carbon monoxide, nitrosamines, or other toxic substances, and do not generate secondhand smoke that significantly affects those around them, which is where electronic cigarettes surpass traditional cigarettes.
However, the e-liquids in electronic cigarettes still contain nicotine salts. Research shows that nicotine salts primarily consist of nicotine and some other organic compounds. Compared to nicotine, nicotine salts are easier to absorb and excrete, thus having a lesser impact, posing minimal harm to the body. However, frequent use or large quantities may lead to dependence. Once humans develop a dependence on a substance, its drawbacks become apparent.
Therefore, the future development of electronic cigarettes still depends on understanding why they were created and why people smoke or use electronic cigarettes. With 350 million smokers in China, why is there such a large smoking population? There is still no clear scientific answer to why humans smoke, but many smokers report that smoking helps relieve stress, while a few light smokers believe smoking is a way to look cool. The modern electronic cigarette was born in China with the simplest purpose of helping smokers quit, not to allow young people to play with it.
According to surveys, the penetration rate of electronic cigarettes among China's 350 million smokers is currently less than 1%, and the user demographic is primarily concentrated between the ages of 20 and 30. They choose electronic cigarettes mainly for their rich fruit flavors and stylish appearances, and this group is not the high-net-worth smokers of China (the older smokers). In fact, some are individuals who previously did not smoke, indicating that the direction of Chinese electronic cigarettes has deviated.
If we talk about being trendy and stylish, there are certainly more electronic products that can attract young consumers. Therefore, investing in electronic cigarettes to profit from young people is not a good business. Helping 350 million smokers relieve their addiction and quit smoking clearly aligns more with market trends. Removing nicotine salts from e-liquids and replacing them with beneficial substances, applying vaporization technology to the health sector may offer a broader market prospect.
It is reported that many electronic vapor brands are already beginning to lay out in the health sector, such as ICE Blizzard collaborating with China National Pharmaceutical Group on the supply of traditional Chinese medicine raw materials, the preparation and processing of herbal vapor liquids, and health services; Maxfel is set to introduce healthy ingredients into its next-generation vapor products, enhancing respiratory health, boosting immunity, and even providing antiviral functions; the emerging electronic vapor brand iRings has centered its product design and development around safety and intoxication from the start, mentioning ultrasonic vaporization technology in its brand declaration. If this technology can be applied to the electronic vaporization field, it will not only provide a better intoxication experience but also represent a breakthrough in the development of vapor health. Although research on electronic vaporization in the health sector is still in the development stage, the changes and innovations made by these brands will bring more possibilities to the entire industry.
From banning online sales to the March 22 consultation by the Ministry of Industry and Information Technology, tightening regulations on electronic cigarettes is inevitable. Rather than dancing with shackles to earn money from young users, it is better to liberate thoughts and focus on the health sector, which can not only win a broader market but also gain more social recognition with policy support.
