After China’s National Day Holiday, What Market Strategy Should Chinese Vape Manufacturers Use Overs

After the break, do you feel like we are entering the last "push" of the year?

For many Chinese vape factories going overseas, expanding internationally is a big topic, but it is also a source of "anxiety." As the competition in the overseas market becomes increasingly crowded, and with various market strategies being tested, it is time to make a judgment and think about how to approach the market next.

What direction should we consider after National Day?

Seasonal considerations, how to proceed?

Some factories may feel that they have been busy for nothing this year, while others have had a fulfilling and busy year with significant gains. For instance, amidst the overall trend of going overseas, some companies have stood out in the international market through their own plans and strategies.

For example, we visited many overseas markets and found that different regions are dominated by different brands. In the Middle East, brands like YUOTO, Tugboat, and MAZAJ are performing well, while in the European and American markets, brands like ELFBAR, Lost Mary, SKE, ELUX, OXVA, VAPORESSO, VOOPOO, SMOK, UWELL, Innokin, and Aroma King are doing well; in Indonesia, OXVA, UWEL, LOST VAPE, and RELX are the main players.

Through this year's CVIC visits to overseas distributors, we found that in Germany, a large number of e-cigarette wholesalers are concentrated in Imtrade, EX-Trade, and Innocigs, while distributors are mainly concentrated in E-ZIGARETTEN-HANDEL, FEAL, and VAPE Exmachina. In the UK, we found that the mainstream disposable brand is ELFBAR, but brands like BLUE BAR and Vuse occupy local KA chain channels, while open-system brands are mainly SMOK, VOOPOO, Aspire, and Geek Vape. The local white user base in the UK is the main consumer of open systems, and most e-cigarette retail distribution in the UK is concentrated among the Indian and Pakistani communities, with channels focused on BLUE HORSE WHOLESALE, VAPE360, VAPE SHOP, VAPE CLUB, VPZ, and Evapo.

We should consider:

1. After nine months this year, what overseas performance have we achieved? Where do we need adjustments?

2. For some companies that are just trying to go overseas, is the market they chose effective?

3. In terms of the path to going overseas, have we found good or efficient paths?

4. How should we plan our product categories for next year? Which key countries or regions should we focus on?

5. Regarding the accumulation in mature markets, should we consider expansion or maintenance of mature channels for next year?

6. For new market selections or alternative global strategic regional markets, how should we choose and enter?

How to find the market?

Overseas markets can be said to be "self-selecting" in terms of abundance and scarcity.

On one hand, look for markets based on market size.

For instance, according to some e-cigarette export data from Chinese customs this year, the main export regions are the United States, the United Kingdom, Germany, and Russia.

For example, in the United States, China exports e-cigarettes worth 1.6 billion RMB every month; in the UK, it is 700 million, and in Germany, it is 500 million. This is how we choose different markets based on market volume.

On the other hand, look for markets based on channels.

The more mature the market, the more mature the channels, but the market share of channels is also more competitive. In such markets, we need to find good entry points for developing incremental channels or look for space in channels outside the leading ones.

The newer the market, the more opportunities there are for new brands to stand out. For example, in new markets where fewer companies participate, channel choices are blank, allowing for more options. How to quickly select good channels and rapidly build a brand image in that country through our products, creating consumer word-of-mouth and a popular brand is crucial.

Furthermore, find the market based on our actual situation.

Not every market is suitable for every manufacturer or brand. Consider the starting point of your company or the positioning of your products.

For instance, manufacturers focusing on disposables seek regions with high potential, rapid growth, or large market volumes. If a region already has a strong disposable market, developing disposables there will be more challenging and costly.

For those engaged in overseas cross-border business, payment is crucial. Consider whether the flow of funds is smooth and whether the repayment cycle suits your business.

At the same time, consider market selection based on policy risk levels.

As disposables become popular globally, different countries have varying attitudes towards disposables in 2023, and unified decisions may occur in 2024.

Some countries currently have no regulations, while others are already imposing restrictions on popular disposables or even planning to ban them. In this context, how to adapt to such market changes and seek trends in the integration of disposables and pod systems must be considered.

Consider market selection based on tax burdens.

Not every country has the same tax rates for e-cigarettes.

Some countries impose heavy taxes on e-cigarettes, while others have almost no taxes. For example, in Germany, it is essential to understand the e-cigarette tax label policy. Tax labels are very important in Germany, and obtaining local e-cigarette import certificates and tax labels requires finding key local distributors, which can save a lot of market development efforts. Because the German market is unique, many small and medium channels must source from larger distributors. In such a market, if you want to find incremental opportunities, consider which channels to develop, such as shisha or daily necessities.

Think about market selection based on logistics difficulties.

This is a reverse thinking process; the more challenging the logistics, the more opportunities there may be to open up the market first. If a company has the capability to overcome logistical challenges, it can gain an advantage.

For instance, logistics in Saudi Arabia and Egypt are very challenging, as well as in northeastern Turkey and Iran. Additionally, due to regulatory factors, many European and American countries may have varying seasonal regulatory levels for logistics. Have effective solutions or partners been established for these logistics routes?

Look for markets based on global e-cigarette seasonal activities.

In fact, many Chinese companies going overseas heavily rely on current international e-cigarette exhibitions.

For example, from January to April, many e-cigarette events are concentrated in the United States and South America, while from April to June, most are in Europe, such as France, the UK, Germany, Spain, and Italy; then in the Middle East, particularly Dubai; from July to August, it may be Indonesia; and from September to December, most events are in Europe, including the UK, Poland, Greece, Russia, and Indonesia.

Using these events to find e-cigarette opportunities is also a way of thinking.

For instance, after National Day, we should pay special attention to the markets in Poland, the UK, the Middle East, Russia, and Southern Europe.

Regardless, in the future, when developing overseas markets, channels will still be paramount, and we must also strengthen our capabilities in product innovation and policy response.

Especially in overseas channel development, we need to put effort into primary wholesale, secondary wholesale, goods transit, existing market, operational groups, and incremental markets. From e-cigarette distribution centers, e-cigarette channel chains, e-cigarette end-user contact points, to developing incremental channels, we must shift from a one-sided approach to a systematic network approach in channel development, which will be our direction of effort!