Shenzhen to Reward E-cigarette Manufacturers, Accelerating the Push to Expand Overseas?

A large number of established factories in Shenzhen need to complete their renewal certifications by August and September, making it urgent to find overseas channels.

Today, a piece of news has drawn attention: Bao'an District in Shenzhen will reward six types of enterprises that have made outstanding contributions to industrial development in the first half of 2023, specifically naming e-cigarette companies.

(Rewards)

According to the conditions mentioned by Bao'an, for e-cigarette companies, those that meet the criteria of "having obtained a tobacco monopoly production license and being among the top 20 in value-added contribution in the first half of 2023" will be rewarded. The application process is online, divided into pre-application and online application, with the online pre-application period from August 23 to 29.

This means that the top 20 e-cigarette companies in terms of value-added contribution in Bao'an will receive rewards.

Compared to other industries, other industrial enterprises are generally calculated based on semi-annual output value, but e-cigarette companies are evaluated based on their value-added contributions, which shows the attention given to e-cigarette manufacturing enterprises in Bao'an.

Currently, many e-cigarette manufacturers in Shenzhen are renewing their certifications, reinforcing their determination to continue to cultivate the global e-cigarette industry, especially with hopes for overseas expansion.

A large number of established factories in Shenzhen need to complete their renewal certifications by August and September!

Recently, it was reported that Qiyi (Shenzhen) Biotechnology Co., Ltd. successfully renewed its certification for its Qiyi flavor products.

(Certification renewed)

From current statistics, nearly 50 companies have obtained new certifications, and actually, from the list of certified companies published from July to September last year, at least 400 companies received certifications, with many Shenzhen enterprises on the list.

The list includes many established companies, such as Mecwell, AIVIP, Yijiate, Zhuolineng, Jinjia, Shangze Biotechnology, Kang'er Technology, Heyuan Technology, Juwei Group, Jier Technology, Green Yunda, Kleipeng, etc.

Shenzhen Jikena Technology, Bodi Technology, and Shenzhen Yunpu Xinghe have announced successful renewal of their certifications.

According to a set of data released by the Shenzhen Bureau of Industry and Information Technology last November, there are currently 845 e-cigarette manufacturing enterprises in Shenzhen, accounting for 68% of the national total; 428 have obtained certifications, accounting for 73.5% of the national total. This indicates that over 420 companies are located in Shenzhen, occupying a majority of the 612 certified companies. Among them, there are 94 e-cigarette manufacturing enterprises in Shenzhen that can be considered large-scale.

These companies can be said to provide strong driving force for Shenzhen's industry or contribute significantly to Shenzhen's export industry.

As an important manufacturing base in the country, Bao'an District in Shenzhen has achieved a GDP of 242.2 billion in half a year, boasting over 50,000 manufacturing enterprises, with more than 5,000 above-scale enterprises, among which 12 industrial chain-leading enterprises have grown by over 18% in the first half of the year, indicating that some industrial enterprises have seen good development this year.

It is noteworthy that some leading manufacturers in Shenzhen are also involved in e-cigarette manufacturing, such as Changying Precision and Flex, with Flex providing e-cigarette heating structural components to end customers like PMI.

“Production scale” and validity periods have become “flexible”!

This renewal process also reveals a point: it gives industrial enterprises more room to operate.

For example, this renewal process has two notable characteristics: the “production scale” and validity periods have become “flexible”!

Firstly, this renewal process is not difficult.

Some business owners have stated, “I haven't heard of any company that applied for renewal but ultimately failed.” However, industry insiders have also mentioned that the general difficulties lie in fire safety and the need for complete documentation, and overseas companies also place great importance on quality certification system verification.

Typically, as long as there are no violations and production capacity is flowing, renewal can be completed on schedule.

Moreover, this renewal provides more development time; the new certificates issued after renewal are almost all valid for two years.

The quotas are also quite flexible; the new certificates issued after renewal no longer specify the exact quantities of pods and devices, but rather state "not exceeding the approved data," which leaves room for flexibility.

Additionally, this year has also seen some e-liquid companies gaining momentum for overseas expansion, or gaining qualifications for overseas operations. For instance, this year, e-liquid manufacturers have had a relatively smooth renewal process, and some nicotine manufacturers have significantly expanded their scale, with some nicotine companies obtaining qualifications for overseas operations, indicating that the future trend will undoubtedly be to seek markets overseas.

Renewal means being able to confidently accept orders. The future strategy of seeking channels and customers overseas must also be put on the agenda.

(Companies going overseas)

A license is a heavy start for overseas expansion, indicating the urgency of acquiring customers.

However, acquiring customers overseas should not be seen as a one-time or two-time business; it is a process of building a customer acquisition system.

In fact, every factory is pondering a question: going abroad is not about being a big brand; how to make terminal contact more solid and monetizable?