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In-Depth Analysis of RELX’s Low-Priced Cartridge Strategy: A 20 RMB Game Changer

On February 5, Bluehole reported on bluehole.com.cn that RELX, the leading domestic vape brand, is about to launch an ultra-low-priced entry-level cartridge product. Relevant information is currently circulating internally among distributors, but the comp
On February 5, Blue Hole reported on the website bluehole.com.cn yesterday thatYueshi, the largest electronic atomization brand in China, is about to launch ultra-low-cost entry-level cigarette bomb products. Currently, relevant information has been circulated among agents and has not been officially announced.

This series of low-cost cigarettes is called Yuexie Soft Mist Cigarettes and has been put on shelves in the back of agents.

Relevant introduction shows that this cigarette bomb is currently priced at 60 yuan in a box of three. It adopts a new atomization technology and has a high probability of being a cotton core. Low-cost cigarettes are currently available in three flavors: tobacco, fruit and mint, and are suitable for Mirage and Infinite Tobacco Bars. According to the information, this cigarette bomb is affordable and cost-effective, and is suitable for customers with high smoking frequency. One picture stirred up thousands of waves. Although Yuexie officials did not officially announce it, Blue Hole confirmed from multiple channels that the above screenshots were indeed official information. After the Blue Hole report, many WeChat group dealers had a heated discussion on this. We even heard that some brands immediately held an internal emergency meeting after seeing the report and communicated with suppliers on countermeasures. This shows the huge impact caused by the drop of a small cigarette bomb. Blue Hole analysis believes that Yue Shi's move has a major impact on the domestic electronic atomization market, no less than dropping a nuclear bomb. As for the authenticity of the product, you don't need to question it. We also got an introduction to the technology of cigarette talk from the agent. Since May last year, the domestic market has seen a trend of low-cost entry-level competition. YOOZ first launched a 9.9-yuan cigarette rod, which is equipped with its cigarette bombs. Later, many manufacturers launched low-cost one-stick-one-bomb replacement kits, with prices ranging from 45 yuan, 49 yuan, 59 yuan and other low-cost products. Proponents of low-cost competition believe that entry-level products can help educate the market and attract more users. After all, price is a key factor. Opponents of low-price competition believe that low-price competition may accelerate the reshuffle of the domestic market, and are also worried that low prices will lead to problems such as product quality. However, judging from the low-priced products that have been launched, most brands first consider the low price of tobacco rods and believe thatThe tobacco rod is just a lighter.Recently, Ono and Fulu launched a 19.9-yuan replacement cigarette rod, but they rarely took action in terms of cigarettes. Unlike the above-mentioned manufacturers who adopt a low-cost strategy for tobacco rods, Yueshi directly launches low-cost cigarette bombs, which is 40% cheaper than the mainstream cigarette bombs normally sold in the industry at 33 yuan each. This is absolutely good for regular users. We suspect that Yueshi will not only launch low-cost cigarette bombs and soft fog, but will also likely launch low-cost cigarette rods. ? We learned from trademark inquiry that Yueshi had submitted a trademark application for 34 categories of smoking equipment named Breeze. Clouds confront rain, snow opposes wind, soft fog opposes light breeze. You taste, you taste, you taste carefully.A match made in heaven.# p#pagination title #e# If Breeze and Soft Fog are indeed the brand of Yueshi's low-cost product strategy, it means that Yueshi has officially entered the low-cost entry market. What impact does this have? The impact is too great. My brother sister. In theory, Yuexie's low-price strategy will profoundly affect the domestic electronic atomization market in many aspects. Blue Hole will analyze this one by one. Impact on users: sinking and attracting new people, old users save money Whether it is a low-cost cigarette pole or a low-cost cigarette bomb, it will be very helpful to users to find new ones. At present, the mainstream price of a cigarette bomb is 33 yuan. For users, the price is indeed not low. The soft fog suddenly reduced the cigarette bomb from 33 yuan to 20 yuan per cigarette, a drop of 40%. The effect of helping users save money is obvious. Yueshi officials also mentioned that for long-term users, it has significant cost reductions. Cigarette bombs costing 20 yuan each will also be helpful to La Xin. According to Nielsen's 2020 data, Yueshi ranks first in market share among 19 new first-tier cities. According to CIC data, Yueshi currently accounts for 62.5% of the domestic market. Lan Dong believes that low-cost smoke bombs will help Yuexie penetrate into sinking areas on the third and fourth lines, reducing the use cost by 40%, which will be very attractive to new users in the sinking market. Impact on Universal Distribution: Official low-cost products compete closely against copycat products Blue Hole has always insisted that universal distribution of counterfeit smoke bombs is a cancer in China's electronic atomization industry and should not be encouraged or promoted. During the upcoming National Electronic Atomization Tour Exhibition in Blue Hole, we rejected requests from at least 10 companies that distribute counterfeit smoke bombs to join the tour. It's not that we don't like money, but we believe that if an industry wants to develop in the long run, it must have companies committed to long-term brand development to participate in market expansion, rather than someone adopting the method of stealing chickens and taking users who have been hard-cultivated by other brands for their own. Being universally distributed to copycats means that brand shipments rank high. Currently, Yueshi is mainly distributed to more people in China. In addition, YOOZ has also begun to be targeted by universal distribution, which can be said to be miserable. Data obtained by Blue Hole from the supply chain shows that a domestic generic counterfeit cigarette bomb brand currently ships more than 10 million pieces, which can be said to be more powerful than a tiger. With the growth of shipments of regular brands and the impact of the remaining production capacity of the Shenzhen electronic atomization factory, this year's universal distribution market may erupt further, and many people want to make quick money and get a piece of the action. ? Don't say that existence is reasonable. There are many violations of laws and disciplines, which are not only unreasonable, but also illegal.
How does Yuexie's low-priced cigarettes compare with universal cigarettes? Blue Hole learned that the current price of smoke bombs that are universally available with Yue Ke is around 15 to 25 yuan, and Yue Ke soft fog is 20 yuan. In terms of price, the terminal price of 20 yuan per tablet is not much different from the universal price. You should know that one of the reasons why Universal Access is sought after by users is that it is cheap. Nowadays, the price of authentic products is the same as that of copycats, and Universal Access has lost its price advantage. From the perspective of safety, choosing a regular brand of cigarette bombs is obviously more secure than a universal supply shanzhai that only wants to make quick money and produce them at a low cost. It is both a low-priced product and an official genuine product. The soft fog smoke bomb can be said to be a close fight. The early popularity of public models in the electronic atomization industry led to the lack of intellectual property protection, which left an opportunity for generic copycats. It is indeed difficult to defend rights legally. This is also the view held by many people who support generic distribution. If you say I infringe, then sue me.# p#pagination title #e# Since the legal cost of safeguarding rights is too high, we should start from the product itself and fight hand-to-hand. In addition to Yueshi's low-cost universal cigarette bombs, YOOZ also released a dual-core strategy this year and launched a smart series of cotton-core official universal cigarette bombs at a price of 30 yuan each. Rather than being intercepted by others, it is better to allocate yourself yourself. Impact on agents: whether to make short-term profits or long-term investments
Yesterday, shop owners of the Blue Hole WeChat group all mentioned the issue of whether low prices affect shop owners 'income. Judging from the actual situation of the industry, agents may not actively promote sales if they do not have enough profit margin. At present, we have not yet obtained the agent price for soft fog. Compared with the mainstream cigarette price of 33 yuan, the money the agent can make is indeed much less. A Yuexie agent told Blue Hole that for soliciting customers, the price of 20 yuan would simply make it impossible for other brands to find physical stores. At present, user demand in the low-end market is still very large. The only shortcoming is that profits are relatively reduced. However, if we can expand the user base through new recruitment, it will be beneficial in the long run. However, the agent also expressed the hope to open a clear gap with the 33-yuan product, so that both customer needs can be met. How important is the low-price strategy to attracting new entrants? Let us give two examples. In foreign examples, British American Tobacco's Vuse brand seized Juul's market share through a low-priced tobacco rod strategy of 99 cents. The latest data shows that it has accounted for nearly 30% of the U.S. market. As a domestic example, YOOZ launched a low-priced tobacco rod worth 9 yuan in May last year, which quickly soared from 2 million per month to nearly 10 million. This is not what we heard. This is a public statement made by YOOZ's supply chain Simmore executives when answering analyst questions. The low-price strategy can increase users 'repurchases, highlight cost performance through price wars, and transform more users. In theory, with more users and more repurchases, the store's business will also increase, but the details will depend on the specific policies given by Yueshi. Impact on the supply chain: Breaking through Simmore, cotton core lies back on the main battlefield In the domestic electronic atomization industry, the current general consensus is that whoever wins the supply chain wins the world. With its FEELM ceramic core technology, Simmore has gained customers from major domestic small cigarette brands. Needless to say, YOOZ, Magic Flute, and Xuejia all have production capacity in Simmore. But what's interesting is that first YOOZ launched a cotton-core universal cigarette bomb, and then Yueshi launched a low-cost universal cigarette bomb, which is quite interesting. The seemingly simple dual-core strategy actually means a breakthrough in dependence on the supply chain. When all a brand of cigarettes are produced by one supply chain, the supply chain can receive the revenue from the production of auto cigarettes of the brand. However, when a brand chooses another supply chain to produce, it means that the auto situation is broken.# p#pagination title #e# Business competition is so interesting. Simmore Tobacco's main customers are Yueshe, British American Tobacco overseas, and YOOZ domestically. Yuexie is often out of stock and YOOZ has insufficient production capacity, which are issues that shop owners often complain about. Simmore cannot be blamed for this. Simmore's ceramic production capacity is also limited. Even if the production line is expanded, it will take time to meet the rapidly growing user demand. ? Shopping malls are like battlefields, and time is efficiency. This gives small cigarette brands the opportunity to find another way out. Judging from the current strategy of YOOZ to launch cotton-core cigarettes, as long as it does not choose other ceramic core supply chains, Simmore should agree with the brand to choose other attempts to meet the insufficient production capacity. But other ceramic core supply chains are in a hurry. ? Seeing that popular brands lack production capacity, but they just can't get it, the cotton core supply chain is about to bloom with joy. After thirty years of east and thirty years of west, can the lonely and cold cotton core re-enter the domestic mainstream discussion? ? It can be said that no one asked under the window of N years, but in one fell swoop, he returned to the world to know.
From the perspective of overseas brands, Juul has always adhered to cotton core, while domestic Youweiit and Yishuang have always adhered to the cotton core strategy. Talking about Yueshi's low-cost cigarette bomb strategy, Liu Dongyuan, CEO of Yueshi, told Blue Hole thatI believe that Yueshi must have made preparations for distribution channels. As entrepreneurs with a bottom line, they do not want to see the allocation of bad coins drive out good coins. This pricing is enough to deter the allocation of bad coins. At the same time, we welcome Yueshi to fully enter the cotton core track. Impact on other brands: Season 1 did not end Many brands should have panicked yesterday. The domestic market leader has launched low-cost cigarette bombs, which is equivalent to lowering prices. How can you not panic? ? From a professional perspective, the industry will discuss the advantages and disadvantages of cotton-core ceramic cores, while users only care about the price. Should other brands reduce prices for their own 33-yuan cigarette bombs? Can we withstand Yueshi's low prices without lowering prices? Moreover, if Yuexie's popularity is higher than that of multiple sizes, what should other brands do? Yuexie has a low-cost cigarette bomb of 20 yuan, and YOOZ cotton core cigarette bomb of 30 yuan. This has also become a test for YOOZ. Should we follow up with the 20-yuan strategy? ? If you re-adjust the channel policy completely, there will be losses. No, the competitive advantage of 20 yuan over 30 yuan is too big. The CEO of another high-ranking domestic brand told Blue Hole that Yueshi's strategy will squeeze the living space of the brand behind it smaller and smaller, and the comprehensive requirements for the company's capabilities on the track will become increasingly high. Another CEO said that whether Yueshi can work depends on its price system and channel purpose. Another brand CEO told Blue Hole that after seeing the news, he immediately held an internal emergency meeting and invited the supply chain to discuss response strategies, but at present he really felt like Alexander. Whether a brand follows up on price cuts is not only related to its own size considerations, but also related to the ceramic cores and cotton cores selected. A supply chain person said that there is limited price room for ceramic cores to reduce prices. Even if the price is lowered, at most a small space will be made available, but it will not be comparable to 20 yuan.# p#pagination title #e# For brands that choose cotton cores, there is room for price reductions. But if you follow the price reduction, it will be tantamount to rebuilding your own agency channels. "It's too difficult." One practitioner said,"I used to think that supervision was the biggest problem, but now I find that the Yueshi low-price strategy is the biggest problem." Blue Hole believes that in fact, it is not difficult for other brands to respond to it. As long as you imitate Yueshi, you can also launch a dual-core strategy. This is also good for users. At the same time, we can squeeze the space for universal distribution through low-cost authentic products. What does consensus mean? This is consensus. Commercial problems are ultimately solved through commercial solutions. The cotton core is full of cattle. The Return of the King actually used such a method to trick people. Impact on Yueshi: Tesla in the field of electronic atomization Yuexie's low-price strategy can not only help Yuexie attract new and sinking, but also combat universal distribution, and reduce supply chain dependence. Of course, the prerequisite is that the cotton core quality of low-cost cigarette bombs is very stable and the taste is stable. Otherwise, all this will be empty talk. This will take time to test, and we can continue to empty talk. Blue Hole firmly believes that Yue Shi, a low-cost cigarette bomb, is a nuclear bomb and of great significance. Many people still don't quite understand the significance of Yue Shi's move. We can give an example to illustrate it. Everyone should know Tesla, the king of the new energy vehicle industry, right? The first to launch mid-to-high-end products Model S and Model X, creating a high-end brand impression, and then launched cheap versions of Model 3 and Model Y, quickly seizing the mid-to-low-end market. Compared with the price of 700,000 yuan for the S series, the price of 250,000 yuan for the Model 3 is simply a blessing for urban white-collar workers to be pretentious and affordable. In terms of market value, Tesla's market value of US$800 billion has long surpassed that of traditional car brands and is unique. From the market perspective, when it comes to new energy vehicles, Tesla cannot avoid it.The release of Model 3 has greatly increased Tesla's ownership and market share. With small profits and quick turnover, we must seize the minds of users first. Sooner or later, Model 3 users will be able to afford the S series and X series. At the same time, through super high cost performance, the three domestic electric heroes were pressed against the ground and rubbed. Of course, the new energy industry is big enough. Even if it is rubbed, the three outstanding companies are still good companies with a market value of tens of billions of dollars. The current Yuexie soft fog has a bit of a Model 3 flavor. The only problem is that Tesla sells all direct sales, costs and profit margins are controllable, and there is no dealer participation, saving many links. The electronic atomization industry currently mainly relies on agents. If the profit margin is too small, this will be a test for Yueshi. But it's interesting to be full of unknowns. Whether you believe it or not, the new energy industry, which you thought was not promising five years ago, is now becoming an upgrade and iterator of the traditional automobile industry. Whether you believe it or not, the electronic atomization industry, which has always been notorious, has two companies with a market value of tens of billions of dollars. Whether you believe it or not, fast hands that you feel are not of high quality are also on the market today. Behind the fast hands means upgrading graphic content to video, and a super dual iteration of list e-commerce upgrading to live broadcast and bringing goods.# p#pagination title #e# The trend is ultimately unmatched. If you want to gain insight into the trends of the electronic atomization industry, come to Blue Hole's electronic atomization city tour exhibition. Well-known China brands will go, so come and give gifts!

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HNB Editorial Team

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