Has the National E-Cigarette Standard Been Put on Hold Because It ‘Can’t Be Found’? Likely a False A

Previous screenshots showed that the first national standard is the "E-Cigarette" standard, reported and executed by TC144 (National Tobacco Standardization Technical Committee), with the supervising authority being the National Tobacco Monopoly Bureau. Earlier queries indicated it had entered the "under approval" stage, issued on October 11, 2017, with a project cycle of 24 months. The second national standard is the "Determination of Nicotine, Propylene Glycol, and Glycerol in E-Liquids by Gas Chromatography," also supervised by the National Tobacco Monopoly Bureau, issued on December 15, 2017, with a project cycle of 12 months. This national standard should have concluded by December 15, 2018, suggesting it has exceeded its cycle.

This has sparked various speculations within the industry, with several seasoned insiders expressing reservations about the recent release of the e-cigarette national standard, with some suggesting it may be indefinitely shelved. However, some media have pointed out that the current standard committee website shows both new and old sites, and the absence of this information may be due to the website redesign.

However, after verification by reporters, this appears to be a misunderstanding. Yesterday, a reporter from Jin Securities contacted the National Market Supervision Administration's National Standard Technical Review Center, and upon internal reminders, the reporter found the e-cigarette national standard with the plan number 20171624-Q-456 on the National Standard Information Public Service Platform under the "National Standard Plan Inquiry" section, currently in the "under approval" status. Additionally, the plan number 20172264-T-456 for the "Determination of Nicotine, Propylene Glycol, and Glycerol in E-Liquids by Gas Chromatography" is also in the "under approval" status, despite exceeding its project cycle.

As a new focus of capital attention, the e-cigarette industry has been in a mixed state, with the use and safety of e-cigarettes and the development norms of the e-cigarette industry attracting significant social attention. The introduction of national standards is seen as the beginning of issuing the industry's "identity card."

In fact, to ensure product quality and safety and protect consumer interests, in 2017, the National Tobacco Monopoly Bureau submitted a project application for mandatory national standards for e-cigarettes to the National Standardization Administration, estimating a project cycle of 24 months, making it highly likely that the e-cigarette national standard will be released within the year. An insider from the National Market Supervision Administration also revealed to Jin Securities that if the e-cigarette national standard is approved, the standard text will be publicly released within 20 working days. However, the specific content of the e-cigarette national standard remains to be seen.

Recently, the Guangdong E-Cigarette Shared Laboratory was established in Shenzhen, where Director Xue, who has deep experience in the tobacco industry, provided a detailed explanation of the e-cigarette national standard currently under review. It is understood that the national standard mainly regulates e-cigarette devices, e-liquids, and e-cigarette emissions. Notably, regarding e-liquids, only 119 additives specified by the national standard can be used, meaning that future e-liquids cannot be made with various flavors according to personal preferences, which also implies that there will no longer be such a wide variety of pod flavors in the e-cigarette market. Additives outside the national standard range will require manufacturers to find third-party institutions to prove their safety before use, although the national standard does not specify which institutions to approach for proof or who will approve it afterward. Additionally, e-cigarette oils must not contain substances that claim to be beneficial to health, increase energy, or reduce harm.

Moreover, currently, there are three possible regulatory policies for e-cigarettes in China. One is to control them like traditional cigarettes, prohibiting private enterprises from entering; the second is to allow significant openness, requiring only simple registration to operate; and the third is to implement a licensing system, where only licensed companies can operate. Experts predict that the likelihood of the second policy being adopted is relatively high.

The upcoming national standard has become a sword hanging over the heads of domestic e-cigarette manufacturers, but the prevailing sentiment in the industry is generally optimistic and expectant.

At the end of August, the 2019 China (Shenzhen) International E-Cigarette Exhibition opened, gathering nearly 200 well-known brands from the industry. The exhibited products cover the entire industry chain, including e-cigarettes, e-liquids, gift sets, heated not burned products, production equipment, packaging, logistics, etc. At the China E-Cigarette Industry Summit Forum, Alibaba International stated that the GMV (Gross Merchandise Volume) of e-cigarettes on Alibaba International Station grew over 300% in the first half of 2019, with e-cigarette buyers increasing by 4706% year-on-year. In terms of categories, small e-cigarettes dominate, while heated not burned and large e-cigarettes are scarce; small e-cigarette flavors are primarily fruit-flavored, targeting the younger generation; vending machines have become a new emerging terminal channel for distribution.

In this regard, Tianfeng Securities analyst Wu Li analyzed that in the past six months, the trend of e-cigarettes transitioning from niche consumer products to mainstream consumer products has become increasingly evident, leading to a transformation of distribution channels from niche e-cigarette specialty stores to general traditional retail stores (convenience stores, grocery stores, etc.). With the implementation of national standards, both upstream manufacturers and downstream distributors will have "legal regulations" to follow, leading the industry towards healthy and sustainable development.

Industry insiders believe that the implementation of national standards will significantly impact the e-cigarette industry, including substantial improvements in product quality, extended product launch times, continuous enhancements in research and development levels, and increasing demand for testing equipment.

This article is reprinted from Xinjihui.