“The father of e-liquid,” Yao Jide, talks about the development and current state of the vaping indu

E-cigarettes

From beginning to end, e-cigarettes were invented by China itself, and Chinese companies hold more than 95% of the world’s over 20,000 related patents.

In 2004, I was among the first to begin researching this field. At the time, I saw the Ruyan brand just entering the market. Ruyan used PG as its carrier, but during use it was found that the vapor production was insufficient. So what substance could be used to change the volume of vapor?

PG+VG was invented by me, and I was also the first to propose the 10 mL bottle size. The EU now classifies products according to the 10 mL standard. The most critical factors are nicotine content and the ratio of PG+VG. At present, what I somewhat oppose is nicotine salts. Some people want to pursue a stronger nicotine hit, so they use nicotine salts to increase nicotine content, and that is harmful.
I have truly watched the vaping industry develop. Shenzhen did not really have e-cigarettes until the end of 2005, and in the earliest days, the hottest market was Turkey. After 2007, the U.S. market share grew rapidly, which also drove overall e-cigarette sales. In 2008, the industry went through a reshuffle because the Turkish market overheated, which led to a sales ban on e-cigarettes at the time. In 2009, there was another wave with the U.S. FDA ban, and this reshuffle was relatively severe.

In December 2012, the U.S. FDA lost in court, and the whole industry opened up at once. The golden era for e-cigarettes was probably from 2013 to 2017. From 2013 to 2014, growth increased by more than a hundredfold, and in 2014 growth was still dozens of times over. In 2015, growth was in the tens of percent. At its peak, profit margins could reach 45% to 50%, but after 2017 the growth rate became more rational. Now, a profit margin of 10% to 20% is already considered extremely high. Sales in 2018 exceeded 20 billion yuan. The reason China suddenly became so enthusiastic about e-cigarettes from 2018 to 2019 was because JUUL was valued at 35 billion USD, and that year it awarded bonuses of 1.3 million USD per person. This stimulated domestic investors, and a great deal of hot money poured in, with everyone rushing to stake out their own territory.

E-cigarettes are different from other financial products; they are not something to be speculated on. The 2019 wave was also a major reshuffle. Small and ordinary companies, especially those trying to seize the market with low-end, low-priced e-cigarette products, would all be cleared out.

As for laws, regulations, and where the market goes next, I still hope that at the national level it will be regulated, but not shut down completely. The EU introduced the TPD regulation in 2016 to standardize the sale and production of e-cigarettes, and we can draw on that. It has not been easy for this industry to grow from nothing to where it is today. I hope everyone will help protect and nurture it, make good products, and not dream of getting rich overnight.