These E-Cigarettes Deserve Serious Attention in the Market

E-cigarettes are increasingly attracting the attention of capital. They send a positive signal to the industry with the capital entering the market. In China, there are sources like IDG, which have entered the market; in the United States, JUUL, established only three years ago, was acquired by Marlboro cigarette manufacturer Altria for $32.8 billion, with a valuation of up to $38 billion. Undoubtedly, this has also sparked a wave in the domestic e-cigarette market. For example, according to media reports, the Japanese e-cigarette brand "Free" announced its entry into the Chinese market at the end of April.

In interviews, e-cigarettes indicate that products with strong R&D capabilities, robust channel capabilities, and outstanding brand capabilities will win. The development of e-cigarettes is an unstoppable trend worldwide.

Today, we discuss international well-known e-cigarette brands like IQOS, Free, JUUL, and Seven Stars. Besides strong financial support, new technology R&D, and consumer demand for e-cigarettes, other factors also track where e-cigarette brands are heading.

Currently, new types of e-cigarettes on the market are generally divided into three categories: heated non-combustion e-cigarettes, smoke-type e-cigarettes, and inhalation energy bars. The third category, strictly speaking, is not an addictive nicotine product. For example, sleep bars with added melatonin, energy bars with taurine, anti-fatigue agents with caffeine, and beauty bars with added vitamins. The tobacco characteristics are not obvious, but the development potential is significant, resembling consumable food. In some developed countries, such as Japan, the industry has gradually matured, and the concept is widely accepted.

However, it is believed that as Chinese consumers' awareness increases, the real market opportunity for e-cigarette consumption is not to quit smoking or replace cigarettes, but to become a live consumption market for vapor products. Even if companies have verified technology in Japan, the acceptance of inhalation energy bars in the Chinese market is low and not prioritized.

Regarding heated and non-combustion e-cigarettes, the representative brand is IQOS, which is committed to developing new tobacco products. This type of heated tobacco product contains traditional cigarette consumables, which are closer to the real taste of traditional cigarettes and are more easily accepted by smokers. IQOS originated in Japan and is currently sold in over 46 countries/regions, excluding mainland China and the United States. However, these consumables are tobacco products and are not allowed to be sold domestically.

The third type of smoke-type e-cigarette is an important direction for domestic startups. Its basic structure includes a battery component, an atomizer, and a cartridge. The e-liquid in the cartridge usually consists of a mixture of nicotine, propylene glycol, glycerin, and flavorings. Unlike cigarettes, it does not contain tar. The atomizer is powered by the battery rod, which converts the liquid nicotine in the cartridge into vapor, giving consumers the sensation of smoking.

This is represented by the American e-cigarette brand JUUL. According to online data, JUUL was established in 2015 and rapidly rose within a few years. Currently, it holds over 70% of the market share in the U.S. e-cigarette market. Its sales are expected to exceed $1 billion in 2018.

However, whether in regulation or market development, e-cigarettes in both domestic and international markets are still immature, and no brand has been formed. This also indicates that the penetration and development capabilities of the entire channel are key to the success of the team.

We know that the most important indicator for e-cigarettes is flavor, and the main factors affecting flavor are three: the performance of the heating element, temperature control algorithms, and airflow.

In the case of JUUL, its advantage lies in its temperature control system, which keeps the temperature within a certain range, preventing discomfort for smokers. It also has an extremely realistic vapor flavor, providing a smoking experience highly similar to traditional cigarettes.

The taste in the mouth and the experience of poor e-cigarettes make people unwilling to try multiple times. The quantity of e-cigarettes is a follow-up issue.

To achieve a better user experience, after thousands of experiments and refinements, we launched the first four flavors: classic tobacco, mint flavor, green bean smoothie, and mango flavor. Although the flavor selection is not as extensive as other brands, it includes classic flavors and some popular trendy flavors, avoiding monotony. Compared to some brands with rich flavors in the market, they often encounter pitfalls. This simplified flavor approach is more convenient.

Since Japan is a mature e-cigarette market, based on extensive feedback from e-cigarette users and surveys in China, these four flavors are the most popular and have a refreshing, clean, and lack of heaviness.

Free is not just an e-cigarette; in the eyes of young people in Japan, e-cigarettes have become a lifestyle. In places like Tokyo, Osaka, and Yokohama, many office workers and young people have become trendsetters for its products. In Tokyo's business districts, e-cigarettes have started appearing in the hands of suited businessmen. They chat with each other while puffing on an e-cigarette. When you walk into an e-cigarette experience store, the staff dress in baseball caps or loose clothing, embodying a street style. These are some new subfields of e-cigarette functionality in the market. Each e-cigarette brand's "redesign of lifestyle" is worth referencing.

More importantly, we guarantee significant investments in product development and quality control, ensuring high quality and safety of the products delivered to consumers through extensive foundational research. For example, the e-liquid used is food-grade glycerin, which reduces source hazards. Currently, e-cigarettes have passed international top certifications and safety standards (EU CE certification, ROHS certification), continuously improving product quality, flavor, and safety.

"The international market remains optimistic about China's e-cigarette market, especially as e-vapor technology is a new blue ocean for consumption," said an e-cigarette executive with over ten years of industry experience.

In the eyes of young people, Japanese e-cigarettes have become a lifestyle. In places like Tokyo, Osaka, and Yokohama, many office workers and young people have become trendsetters for its products. Now, to adapt to the Chinese market, the new products launched by e-cigarettes have three main characteristics: first, exquisite appearance and fashionable trends; second, mini portability for greater comfort; third, polished processes for a comfortable grip.

Under the simple business-style packaging of most products on the market, this free smoke gas is suitable for low-key business people and fashion-seeking young people. They are full of design, exquisite without being fanciful, and without falling into mediocrity.

Disposable e-cigarettes are individually packaged in plastic, clean and hygienic, being pumped open without buttons, eliminating the hassle of button use, ensuring convenience in the smoking experience.

For example, Seven Stars e-cigarettes, as a traditional tobacco company in Japan, have also joined the e-cigarette ranks. Their Ploom Tech e-cigarette itself has no special features and lacks highlights. The only noteworthy aspect is that it adopts a new mode called virsmo. There is an LCD screen to indicate the remaining number of puffs, allowing users to know the lifespan of the used pods at any time.

Additionally, IQOS requires a four-minute charge for each stick, meaning that a fully charged charging case theoretically allows you to smoke 60 sticks, equivalent to three packs of cigarettes.

Moreover, JUUL claims a battery life of up to two days, but for e-cigarette users with obsessive-compulsive tendencies, it may be anxiety-inducing not to charge it for a day.

This time, the Free company launched its main "smoke-type" product, which is a disposable vapor cigarette. One disposable vapor cigarette is roughly equivalent to 2-3 packs of regular cigarettes, with a theoretical endurance of up to 450 puffs, showcasing strong endurance. Furthermore, this e-cigarette claims to use exclusive core technology "oil-electric balance technology," which avoids wasting battery or e-liquid, a significant advantage compared to other competing products on the market.

It is worth noting that these major brands have not yet paid enough attention to disposable vapor technology. Free is relatively unique in this regard. If its flavor, appearance, and portability can surpass these major brands, then its industry competitiveness can be understood.