How to Deliver Better After-Sales Service for E-Cigarettes: 5 Essentials for Vape Brands

E-cigarettes were initially developed as a smoking cessation product, and over the course of more than a decade, they have gradually evolved into electronic consumer products. Many traditional smokers have transitioned into e-cigarette consumers, leading to rapid growth in the e-cigarette market.

E-cigarettes possess dual attributes of electronic products and tobacco products. From the perspective of e-cigarette hardware, they are more aligned with electronic products, while their consumables fall under the category of tobacco products.

China is the largest producer of e-cigarettes, accounting for over 90% of the world's total production. According to the "2018-2023 China E-Cigarette Industry Market Outlook and Investment Strategy Research Report" published by the China Business Industry Research Institute, the production of e-cigarettes in China was 1.205 billion units in 2016, and it is expected to reach 2.229 billion units by 2018. In 2010, the global e-cigarette market size was approximately $416 million, which expanded to $7.1 billion by 2016. In just six years, the market capacity expanded 17 times, with a compound annual growth rate of 60.5%. The e-cigarette industry is expected to maintain high growth momentum in the future, with the industry scale projected to reach $45 billion by 2024, with a compound annual growth rate of 26%.

China is the most promising market for e-cigarettes globally. With a tobacco consumer market of 350 million people, cigarette sales in China reached 1.42 trillion yuan in 2015, while e-cigarettes accounted for less than 0.2% of that figure. In the global market, e-cigarette sales are approximately 1.1 times that of cigarettes. The growth of e-cigarettes in China has been relatively slow compared to the global average of 51%, with a compound annual growth rate of 17.5% over the past five years.

Faced with such rapid market growth, the after-sales service for e-cigarette products is under severe pressure. The rules of the electronic product industry have proven through countless new products that once the market develops rapidly, after-sales service will inevitably lag behind, as seen with televisions, mobile phones, and more. Many cases of after-sales issues have already emerged in the e-cigarette market, including difficulties in contacting manufacturers, short service periods, lack of usage guidance, low quality of service personnel, and inadequate information management capabilities.

In any mature electronic product industry, such after-sales service would be a laughingstock. However, the e-cigarette industry is still in its early stages of development, and the rapid growth makes such phenomena understandable.

As the Chinese e-cigarette industry continues to develop, after-sales service issues will become more pronounced. If after-sales service is not handled well, it will not only affect sales but also impact China's national image internationally, especially with the upcoming mandatory national standards for e-cigarettes, which will also include stringent requirements for after-sales service. E-cigarette companies must prepare in advance, improve after-sales service, and enhance user satisfaction to lay a solid foundation for the rapid development of the industry.

How can e-cigarette companies improve after-sales service? From both industry and enterprise perspectives, the following five aspects need to be addressed:

1. Establish a unified after-sales service policy for the industry

The positioning issue of e-cigarette products has always troubled the industry. Based on the nature of the products, service policies should fall under the electronic product service policies. The national "three guarantees" policy for electronic products should also be implemented for e-cigarette products. In the absence of clear national policies, the e-cigarette industry association should proactively establish standards and policies that align with the long-term development of the industry, with after-sales service policies being a crucial component.

2. Establish a telephone and online service system

A telephone center and online service center are essential components of after-sales service, providing the most convenient way for users to connect with manufacturers and the most direct way for manufacturers to reach users. From the user's perspective, they can find manufacturers through telephone or online services to seek help with product issues; from the manufacturer's perspective, the information collected through the telephone center can provide reliable data for improving product quality and design. Therefore, establishing a convenient and efficient telephone and online service system is the first step in providing service.

3. Establish a service center system covering all sales areas for repairs and replacements

E-cigarette products are tangible electronic products. Regardless of design, there will always be a possibility of product failure within the warranty period, making repairs and replacements a necessary option. In the current situation in China, establishing service institutions in sales areas is essential for implementing repairs and replacements. These service institutions can be established by a single manufacturer or through industry associations, allowing for shared resources such as repair personnel, facilities, and brands, thus reducing costs.

4. Establish a rapid response and adequately supplied spare parts operation system

"Before the army moves, the supplies must be ready"; spare parts are the material foundation for after-sales service, and repairs and replacements for e-cigarette products follow this principle. Currently, e-cigarette products are also modular in design, and damaged parts can be repaired through spare parts replacement. With the rapid updates of e-cigarette products, spare parts inventory is a key issue. Additionally, developing an economically feasible repair spare parts BOM is a highly technical task.

5. Establish an efficient service management information system

Whether it’s the telephone and online service system, repair service center system, or spare parts operation system, all require management. The most effective means of management is to establish an end-to-end full-process management information system. This system can facilitate the cooperation of several major service systems, promote the rapid completion of repair services, and monitor service quality to enhance user satisfaction. The service management information system is the most crucial aspect of e-cigarette product services. By managing customer relations, we can achieve a second sale of the product, meaning we aim to increase repurchase rates through existing customers. The higher the repurchase rate, the lower the costs for the company.

Through the implementation of these five initiatives, e-cigarette companies can begin to establish a basic service system. As the industry develops and companies grow, the after-sales service system will continue to improve and refine. I believe that companies will successfully enhance the after-sales service of e-cigarette products, allowing users to genuinely experience quality products and excellent service.