Q1 Vaping Industry Review: Big Brands in Fierce Competition, Small Players Struggling, Easy Money Er

"The prerequisite for recovery is to have entered a severe winter, but our industry has not really entered it." An upstream supply chain practitioner concluded to us this way when faced with the question of "whether he feels the recovery of overseas business."

In fact, many friends have talked with Gewu about the topic of "recovery" recently. According to the assumption, after the comprehensive liberalization at the end of last year, both people and goods will be smoother. On this topic, Gewu had a dialogue with many upstream practitioners in the supply chain, and the answer was that it was not so much "the industry is picking up" as "getting more and more involved."

Without a severe winter, there would be no warming.

Faced with the question of "whether overseas business picked up in the first quarter", relevant practitioners have quite the same view-there is no recovery.

For example, the relevant person in charge of a licensed production companyLi Xing(pseudonym) believes that this issue needs to be observed from different angles: "This is related to the volume of its own business. For us, we have indeed made great progress. Now shipments have reached almost five to six million yuan per month. After another major customer connects, it can even directly increase to twenty to twenty million yuan."

"But in fact, according to my observation, the industry has actually maintained continuous growth." Li Xing added: "And this growth rate has not shown major fluctuations. If you say it would be better, it wouldn't be; if it were worse, it wouldn't be possible."

certifiedsmoke oilHu Xin, president of Enterprise Yunshuo Technology, also made it clear that compared with the first quarter of last year, its performance did increase significantly year-on-year. At the same time, Hu Xinru corrected the statement of "warming up" at the beginning of this article.

"There is no severe winter, so there is no recovery. It has always been positive development. If you have to talk about changes, more people went to the market, distributed goods, and promoted brands in the first quarter. But overall, if we look at it in a longer time dimension, it is useless for orders to float in the sky and cannot be dropped."

"The concentration of the industry is constantly increasing, and it must be a matter of joy and sorrow. Competitive companies will live well when it is cold; they will live better when the environment is good. Judging from our tobacco oil sector, we have maintained stable growth."

"Because epidemic prevention policies in different regions of the world are different, the pace of liberalization is also sequential. So in terms of business, there were really no obvious changes in the first quarter." Tang Hao, the relevant person in charge of an established open manufacturer, said: "The overall volume of overseas markets is still growing steadily. If there is any change, domestic companies are more motivated to go abroad."

"Overseas itself has always maintained rapid growth, so the impact of the changes in recent months is not obvious. If we only look at the OEM volume, we have several times growth compared to last year."GeekvapeMarketing Director Potti said frankly.

However, he believes that the change is more reflected in the enthusiasm for going abroad: "Judging from the investment and scale of domestic companies going abroad, we can clearly feel that everyone is taking more and more actions, and the resources and capabilities they are investing in overseas markets are becoming more and more radical."

Obviously, in the eyes of upstream practitioners, a more appropriate term than "recovery" may be "acceleration".

The same inner scroll, different scroll methods

Although the term "warming up" has not been unanimously agreed by everyone, when it comes to the strengthening of inner scrolls, everyone has given a definite answer-the same inner scrolls, but the scroll methods are strange.

Developing new flavors is an eternal topic for tobacco oil. But since the end of last year, the methods of leading enterprises and waist enterprises have changed." The taste of head rolls, the price of waist rolls,"Hu Xin summarized the current style of tobacco and oil companies.

"Due to the serious homogenization of tastes in the market, particularly large leading companies have been required to develop new flavors for customers 'new devices at the end of last year. However, not many companies can truly capture tastes; those who lack the ability can only fight a price war."

This point mentioned by Hu Xin is also confirmed by the observations Li Xing shared with us. He summarized to us the current major trend in the one-time market-the fragmentation of the number of mouthfuls. In addition to the number of 600 and 800 mouthfuls for entry, it is at least 5000 mouthfuls. Previously, the number of mouthfuls of one to two thousand and two to three thousand mouthfuls has gradually lost its sound volume.

"First contacte-cigarettesPeople must want low-cost trial and error, so they choose a cheaper number of small mouthfuls; after gradually accepting e-cigarettes, they will begin to consider the cost of using them, so if more than 5,000 cigarettes are calculated, each puff will definitely be cheaper. As a result, the one-time market with neither high nor low mouth will gradually shrink."# p#pagination title #e#

"The mainstream in the United States used to be about 5000, but now the 7000 and 8000 are becoming popular one after another. Not to mention Malay, there are many more than 10000. As long as it is a market with unlimited capacity, what everyone takes is the number of bites." Tang Hao mentioned to us the current one-time market's pursuit of large sums.

The number of ports is directly related to the amount of oil injected, so a price war is naturally inevitable, because it is not difficult to just increase the number of ports. However, the difficulty lies in that on the one hand, controlling costs while increasing the amount of oil injected; on the other hand, making differentiation, improving premium capabilities, and confronting the price war.

Tang Hao summarized the current differentiation trend to us: "Except for markets with limited capacity, it is difficult to make new things. Many new things have emerged in the U.S. market, such as dual-hair productsheating wireIt started to appear as one-time; the one-time one with fuel display and power display that we made at the end of last year is also being done by other homes. In addition, there are more and more transparent casings, aluminum alloy materials, and one-time replacement bombs."

"The Malay market is still frantically obsessed with design. In addition to milk tea cups, tape boxes, sports kettles, gas cans, engines, and even animal appearances have all appeared. The traditional box appearance is no longer outstanding enough."

Potti also confirmed this statement. He said that GEEKVAPE actually went earlier. Both its own brand GEEKBAR and OEM products have followed suit, and products that add fuel display and power display have been put on the market for some time.

But Potti maintains a rational view of this trend: "To make one-time added value, we have always focused on two points, one is easy to use and the other is easy to purchase, so that such products can survive for the long term. Some of the hype features actually create demand without demand. They may drive a wave of craze but may not necessarily last."

In our view, it can be said that we will almost repeat the innovation route of replacing bombs in the past few years at one time, but it also means that we may repeat the mistakes we made back then.

Innovation in market methods has brought small and medium-sized OEM companies into trouble

It is not just the waist tobacco companies that have been caught in the price war that are suffering. Small and medium-sized OEM companies are also facing the dilemma of customer loss against the background of innovative market methods. In this regard, Li Xing shared with us the background and influence.

"In the past, small and medium-sized OEM companies benefited from channel being king. Typical channels, such as convenience stores, such as those with a chain of 600 or 700 stores, used to tend not to be mature brands, but to choose a foundry in China to make their own brands, so as to obtain higher gross profit in this way. But with the rise of strong brands such as ELFBAR, this path is no longer fragrant."

Li Xing explained the reason: "ELFBAR is a distributor in many overseas markets, and there is no capital cost to the channel. Second, ELFBAR's own gross profit is relatively low. Compared with the previous manufacturer's 40% to 50%, ELFBAR's own gross profit is controlled at 20% to 30%. In this way, these European channels found that it was better to sell ELFBAR directly by their own OEMs."

"In the past, more and more of these so-called stable customers who continued to seek cooperation with them have been sold out. They no longer need to customize OEM/ODM products, or the order volume has dropped sharply. So during this period of time, small and medium-sized OEM companies have been particularly miserable."

From this perspective, proactively changing business models has become a must-answer question for many small and medium-sized OEM companies.

"For production companies without sales teams, the problem can be fatal. There may be two ways. One is to acquire a brand, but it will not help if the acquired brand has limited strength; the other is to send people to find major customers in emerging markets, and shift from previous European customers to customers such as Southeast Asia and Africa. If the switch is not successful, you may not survive this wave."

What is noteworthy is that Li Xing also pointed out the intellectual property risks faced by small and medium-sized OEM companies under the general trend of compliance: "Compliance has screened out many small and medium-sized OEM companies with relatively poor strength, and many of them have secretly worked hard to produce while moving factories to Vietnam, Indonesia and other places. The production capacity vacancies caused by this process have led many foreign companies to find licensed companies like us for OEM products."

"But the core problem is that their needs are either copying this or that." Li Xing sighed: "Maybe small and medium-sized enterprises relied on such orders to survive in the past, but the problem is that they are now fully compliant. I don't know if others dare to, but we don't dare to copy them anyway."

The innovation of market methods and comprehensive domestic compliance have forced the barbaric growth of small and medium-sized OEM companies to face the pain of transformation.# p#pagination title #e#

Leveraging the blank market, the old revolution encounters new problems

An accepted fact is that overseas markets are not as littered with gold as many people imagine.

Mature markets have complete business rules and strong professional channels, but the gradual shift to existing markets means that it is difficult for new brands to emerge; blank markets have a small base and rapid growth, but at the same time means that there is not much ready-made experience to learn from.

"The biggest challenge is still brand awareness." Talking about the pressure to enter the blank market, Tang Hao concluded: "We have been doing it for more than ten years, and the popularity is enough. But the problem is that people may subconsciously associate us with the smoke. But after all, one-time and smoke are two different things. Some people will think that you will still have the same set of things before."

Tang Hao gave an example: "It is also challenging for established companies to achieve one-time consistency. For example, how to ensure a constant power output and taste intensity while the battery and oil volume continue to decay cannot be directly copied from large smoke products."

In addition, one-time is different from big smoke. The latter iteration is mostly based on years and has more time to polish the product. However, the weather may change in two or three months at a time. A design and a brain function may all achieve a hit model, and the style of play is completely different.

"In fact, there are very few manufacturers in the industry that are good at both open and one-time." Potti believes that the core reason is that systems built around open are difficult to be compatible with one-time:"If it is open, we must first look at market opportunities. Points, channel resource negotiations, various tests and verifications that fall on the product simultaneously, there is a large number of structural stacking, design and testing work. After all, open systems have a longer service life and higher requirements for product stability and innovation."

Speaking of this, Potti shared GEEKVAPE's model: "We have done so in the past few years, because when our one-time brand GEEKBAR was founded, it was a completely independent business entity. It was completely immune from open R & D and channels. Restrictions, more flexible and efficient; team building and talent training are also completely aligned with the FMCG industry."

In other words, this means that large companies whose processes and standards have long been solidified do not have a 100% chance of winning when faced with the positive challenge of small companies that are easy to turn around. This is the dilemma faced by many large companies that are making efforts in the global market.

"For brands like GEEKVAPE that face global markets, R & D teams and marketing resources will inevitably tend to large markets; while those brands that only create one market and the team directly enter will respond very quickly," Potti concluded.

"To address this challenge, the strategy we adopt is product platformization. We will release a solution on April 4th, which we call VPU, which is the atomization processing unit. The essence of e-cigarettes is actually a collection of inputs and outputs.KicknaWe use market space to check its stability and integrate stable atomization processing capabilities into a fixed overall solution. Facing different markets, I only need to adjust the taste and change the shell to achieve the fastest response. Market demand."

In our opinion, this approach is very similar to the concept of "middle office" that has become popular in the Internet industry in previous years-packaging and integrating common capabilities into an interface that can be quickly called to support the rapid development of the business.

last

From the one-time transition from words to brains, to small and medium-sized OEM companies being forced to change the composition of their customers, to the fact that established companies facing the world had to self-revolution in the face of "encounters," changes in performance figures are more just a result., what should be seen is the atomization of Chinae-cigarette enterprisesIn the past market competition, it has strong ability to correct errors, adapt and innovate.

This ability largely means that even if it encounters short-term changes in the business environment, it will find new survival rules in a short period of time and eventually regain the market.