Tobacco authority issues export-related documents; e-cigarette export competitiveness expected to st

Haitong Securities released a research report stating that the domestic e-cigarette industry has strong competitiveness globally, with significant influence in the British and American markets. Brands like Elf Bar and Lost Mary (Miracle), Elux, Geek Bar, and SKE Crystal are all disposable brands owned by domestic companies. With the explosive growth of disposable products overseas and the tightening of regulations by various governments, the release of the "Guidelines for Promoting the Construction of Quality Assurance Systems for Exporting E-Cigarette Products" will help reduce compliance risks for companies and support the healthy and steady development of Chinese e-cigarette exports. It is expected that the market share of domestic e-cigarette exports will concentrate on compliant enterprises.<\/p>

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　　▍Haitong Securities' main points are as follows:
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　　The e-cigarette market continues to grow, with rapid growth in disposable products.<\/p>

　　According to the Oriental Tobacco Report, the "2022 World Tobacco Development Report" by Heng Bingquan, global e-cigarette sales growth has rebounded, with a year-on-year increase of 20.0% to $23.65 billion in 2022. By category, open-system e-cigarettes and e-liquids grew by 8.1% year-on-year to $8.72 billion, while closed-system e-cigarettes grew by 28.2% year-on-year to $14.93 billion, with disposable e-cigarette sales reaching $2.55 billion, nearly doubling year-on-year. In terms of markets, the United States ($9.0 billion), the United Kingdom ($5.03 billion), and Canada ($1.98 billion) are the top three global markets.<\/p>

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　　From January to June 2023, e-cigarette exports grew rapidly year-on-year, with a slight decline in June.<\/p>

　　According to customs data, in 2022, the total export value of e-cigarettes and similar personal electronic vaporization devices (customs code 85434000) and other non-combustible products containing nicotine (customs code 24041200) was $9.886 billion. From January to June 2023, exports reached $5.482 billion, a year-on-year increase of 29.16%, with June exports at $942 million, a year-on-year increase of 10.38%, but a month-on-month decrease of 6.66%.<\/p>

　　The tobacco authority has issued export-related documents aimed at improving the quality and safety of exported e-cigarette products.<\/p>

　　According to the announcement from the National Tobacco Monopoly Bureau, on July 18, 2023, the office issued the "Guidelines for Promoting the Construction of Quality Assurance Systems for Exporting E-Cigarette Products," which emphasizes aligning with international advanced technologies, rules, and standards to enhance product quality and ensure product safety, thereby improving the overall quality and safety level of exported e-cigarette products.<\/p>

　　U.S. market: Rapid growth of disposable e-cigarettes, FDA strengthens regulation of disposable products.<\/p>

　　As the largest e-cigarette market globally, according to the CDC website, disposable e-cigarette sales accounted for 51.8% as of December 25, 2022, an increase of 27.1 percentage points from January 2020. Among the top five e-cigarette brands, two (Elf Bar and Breeze Smoke) are disposable e-cigarette brands.<\/p>

　　According to the FDA website, on June 22, 2023, the FDA issued warning letters to 189 retailers, ordering them to remove unapproved tobacco products, especially products from Elf Bar and Esco Bars.<\/p>

　　UK market: Significant increase in disposable usage in 2022, with young people preferring disposable products.<\/p>

　　According to the ASH website, in 2022, the number of e-cigarette users in Great Britain reached 4.3 million, accounting for 8.3% of the adult population, an increase of 6.6 percentage points from ten years ago. Among them, the proportion of users primarily using disposable products increased significantly from 21% to 15%. The usage rate is particularly high among young people (48% among those aged 18-24, and 19% among those aged 25-34), and among minors aged 11-17.<\/p>

　　A survey in 2023 showed that 20.5% of the population had ever used e-cigarettes, with 7.6% using them regularly or occasionally (up from 3.2% in 2020 and 7.0% in 2021). Among current e-cigarette users, 69% use disposable products (up from 7.7% in 2021 and 52% in 2022), with Elf Bar, Lost Mary, Elux, Geek Bar, and Crystal being the most tried brands among young people.<\/p>