Although these shops are small in size, their decorations are fashionable and modern. At first glance, it seems that they are selling digital products. However, the words "XX digital" and "XX mobile phone" were not marked, which made people confused for a while and didn't know what they were selling.
It was not until you turned on your mobile phone and searched for the name of the store that you suddenly realized that "it turned out to be selling e-cigarettes."
News about e-cigarettes once dominated the Internet for a period of time two or three years ago. Luo Yonghao and Edison Chen are its platforms, and several companies are listed in the United States, with a market value of hundreds of billions.
However, from then on, e-cigarettes suddenly disappeared until it returned to people's field of vision in a low-key and dense way in the form of street shops.
What happened to the e-cigarette industry during this period?
Unconsciously, when more and more people around us began to smoke electronic cigarettes, how did this highly controversial and doomed industry quietly invade people's lives?
Today, a century will show you the capital secret behind the e-cigarette industry.
2004-20 13 e-cigarette "martyr"
Unlike tobacco originating in the United States, e-cigarettes are not imported. In 2003, a China brand produced the world's first electronic cigarette, which has been less than 20 years.
The China brand that kicked off is called "Smoke".
Just like its name, the birth of Ru Yan subverted the entire tobacco industry, and the future of the tobacco market monopolized by giants looks confusing. But like a smoke, it rises quickly and dissipates quickly, as if it never existed.
Different from the later profit-seekers, the initial intention of Ru Yan's birth was not to add a fire to the tobacco market, but to make people "comfortable" to quit smoking.
It was invented by China pharmacist Li Han. Like many adults, after entering the society, Li Han felt the pressure of life and smoked more and more fiercely.
At this moment, the news that his father had cancer from smoking made him want to quit smoking.
But quitting smoking is a very painful process. Li Han tried the nicotine patch, but every night when he put the patch on his stomach, he always woke up from a nightmare in a cold sweat.
Quitting smoking failed. As a pharmacist, Li Han is thinking, is there any way to reduce the harm of smoking while maintaining a good feeling?
Therefore, he tried to use high-concentration nicotine solution as cigarette oil and heating resistance wire as heat source, thus designing and inventing the world's first electronic cigarette product based on nicotine.
At the same time, Li Han also designed four kinds of nicotine bombs, high, medium, low and weak, to help people get rid of their dependence on cigarettes by gradually reducing the nicotine content.
A year later, in 2004, Li Han named this product "Ru Yan" and successfully mass-produced. In that era when the per capita annual income in China was less than 10,000 yuan, the price of cigarettes was 599 yuan, and the most expensive pipe product was as high as16,800 yuan, which seemed like a luxury gesture.
Ru Yan defines e-cigarette users as middle-aged smokers with money and taste. When Ru Yan entered the market, she advertised around the function of "quitting smoking" and read the slogan that laid the brand tone: Caring for Ru Yan.
Does it sound middle-aged?
After the appearance of Ru Yan, the advantages of e-cigarette "no open flame, no tar and no second-hand smoke" quickly subverted people's cognition of tobacco, making it sell 230 million yuan in just seven and a half months.
Electronic cigarette technology seems to be about to set off a storm in the traditional tobacco market.
But unfortunately, is e-cigarette really harmless? No, it's just that the advertisement of "cigarettes" keeps silent about the harm of e-cigarettes.
In 2006, CCTV exposed that the effect of smoking cessation was fraudulent, and Wang Hai, a famous anti-counterfeiting fighter, also went into battle, accusing Ru Yan products of being harmful and suspected of deceiving consumers.
The State Tobacco Monopoly Bureau told a number of media that Ru Yan's propaganda was suspected of being inaccurate and contrary to scientific theory, demanding to control the e-cigarette market.
After being accused by public opinion, Yan Yan's brand value plummeted and her credibility instantly fell to the bottom.
In desperation, Li Han shifted its sales focus from China to overseas markets with higher consumption level.
This transfer has brought a short-term turnaround to Ru Yan.
In the third year of its establishment, that is, in 2007, Ru Yan's global annual sales exceeded 654.38 billion yuan, with sales exceeding 300,000 pieces. In the same year, it was successfully listed in Hong Kong under the name of "Sanlong International".
But the good days of smoke did not last long.
In 2009, the US Food and Drug Administration (FDA) issued a comprehensive import ban on electronic cigarettes, which directly blocked the way of smoking.
At the same time, Ru Yan tried to protect the product by applying for a world patent, but the approval was delayed, resulting in the continuous emergence of overseas imitations.
This year, the annual loss of Ru Yan was as high as 400 million yuan.
At this time, it is full of smoke, and there are no people inside and outside. The domestic market suffered a reputation storm, and the foreign market was banned, which went downhill from then on.
Finally, in 20 13, Ru Yan was acquired by Imperial Tobacco, the fourth largest tobacco company in the world, for $75 million.
There is a saying in the entrepreneurial circle that "the forerunner, the third step martyr". Li Han and Ru Yan invented the world's first electronic cigarette product, but the market is not fully ready to accept electronic cigarettes.
Just one year before Ru Yan was acquired, two American tobacco companies sued the FDA for its "import ban", and the FDA lost the case, and the American e-cigarette market reopened.
But like smoke, I never made a comeback.
20 14-20 18 crazy capital
Although Ru Yan has fallen, the capital has seen the huge blue ocean of e-cigarette market.
Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco, four international tobacco giants, began to enter the e-cigarette market through acquisitions.
Considering the production cost and production experience, these giants have put their foundries in the manufacturing center of China: Shenzhen.
According to the statistics of The New York Times 20 14, the e-cigarette supply chain with Shenzhen as the core has produced 90% products in the global market, with a total output of over 300 million.
The influx of overseas orders has also stimulated the rapid development of foundry technology in China. And they will become an important cornerstone for the re-emergence of domestic e-cigarette brands.
In the second year of Ru Yan's acquisition, that is, 20 15, e-cigarettes re-entered China in the form of European and American trend culture, and the first e-cigarette Expo was also held in Shenzhen.
In a blink of an eye, domestic e-cigarette brands have increased from one cigarette to more than 400.
Just like the "cottage machine" of Huaqiang North before the birth of smart phones. At this time, most domestic e-cigarette brands have no connotation, no marketing and no promotion, thinking that overseas giants rely on OEM for a living. Dozens of e-cigarette foundries even crowded into a small science and technology park less than one square kilometer in Shenzhen to produce e-cigarettes in the form of family workshops.
The road to e-cigarette branding in China began on 20 18.
This year, the American tobacco giant Altria acquired a 35% stake in the Silicon Valley e-cigarette brand Jules, making Juul's valuation as high as $38 billion.
This incident made China Capital see the huge value-added space of e-cigarette brands. You know, in Shenzhen at that time, the threshold for e-cigarette entrepreneurship was low, and 5 million people could buy a brand, and 50 million people could even win the head brand.
With the influx of capital, many domestic e-cigarette brands have shifted from overseas OEM to domestic focus. Among them, the leading brand is "York".
York, the founder of Wang Ying, was an Uber executive in China.
With a keen sense of smell, when she started her business with e-cigarettes, she found Cui Yimu, a Shenzhen company that mastered the core production technology-"e-cigarette atomizer", and worked as a foundry for York.
Before the birth of York, domestic electronic cigarette products were mainly open, commonly known as "Great Smoke", with high heat and large volume, but it was inconvenient to use.
York uses a more portable small smoke technology. Through the cooperation with Cui Yimu, York's products are equipped with the most advanced ceramic atomizing core and nicotine salt technology for the first time.
The amount of steam produced by this technique is reduced, and it will not irritate the throat excessively. It is advertised as "relatively healthy", but it can make nicotine absorbed by the blood like real cigarettes and relieve smoking addiction.
Besides carrying new technology, York has made great efforts in product design, packaging and marketing.
Unlike Ru Yan, York defines its customers as young people who pursue fashion. In order to cater to the aesthetics of young people, York adopted a minimalist industrial style similar to Apple's mobile phone for packaging, and also introduced novel flavors such as fruit and soda.
According to reports, when York introduced the first product, the average packaging cost of the e-cigarette industry at that time was two yuan, while York spent 13 yuan with a nine-page product manual, which completely subverted smokers' first impression of e-cigarettes.
In the field of e-cigarettes in China, York has taken the lead.
It took only three months from the decision of founder Wang Ying to the launch of the first product in York. Such a vigorous entrepreneurial speed benefits from the prevalence of OEM mode in e-cigarette industry-new brands can rely on mature foundries to save costs and shorten product development cycle.
In 20 18, York sold 500,000 cigarette sticks and 5.9 million cigarette bombs in its first year of business, with a revenue of 654.38+33 billion yuan.
An enterprise's income in the first year exceeded 100 million. Such an attractive prospect attracts the capital that has just experienced the P2P thunder storm, like a shark.
For a time, the "smoke war" set off by the e-cigarette industry can only be described as "madness". New brands such as Xiaoye, Xue Jia, Grapefruit and Magic Flute are emerging one after another, which dazzles consumers.
The entrepreneurs behind it are executives from the Internet, engineers who have worked for many years, and even Weibo Internet celebrities.
20 19-202 1 From banning the whole network to making a comeback.
20 19, the second year of the founding of York, the "smoke war" was in full swing.
For example, Luo Yonghao, a former New Oriental lecturer who founded the hammer mobile phone, also aimed at the electronic cigarette track and became a partner of the electronic cigarette brand "Xiaoye".
But Luo Yonghao deserves to be called "the ghost lamp of the industry".
20 1 9165438+1October1,Lao Luo Gang forwarded a Weibo, intending to announce the pre-sale of Xiaoye e-cigarettes in JD.COM. Twenty minutes later, the government issued the "Notice on Further Protecting Minors from E-cigarettes", demanding that e-cigarettes should not be sold through the Internet, and e-cigarette advertisements should not be published through the Internet.
This ban basically declared the death penalty for e-cigarette brands such as Xiaoye.
Since 20 18, in order to achieve rapid expansion, most e-cigarette brands have played a set of "light assets" play. The performance is that the brand is responsible for controlling the marketing and sales links, and outsourcing these "hard work" R&D and production with technology and funds to the foundry.
In this case, online marketing and sales have become the key to the survival of a brand.
However, with the introduction of the government ban, the online expansion of e-cigarette brands in Zhang Zhilu has been completely blocked, and the only thing left is to spend a lot of money to develop offline stores.
As a result, the e-cigarette industry, like * * * enjoying bicycles and online car rides, subsequently gave birth to a classic "money-burning war".
It must be said that as a regular army of the Internet, Wang Ying, a former Uber executive, is very handy in this "money-burning war".
At the same time as the ban was issued, York launched a new retail "36 1 plan", announcing that it will invest 600 million yuan in the next three years to open 10000 York offline stores.
York's competitor grapefruit immediately released the "Ten Thousand Stores" plan, announcing that it would provide each shopkeeper with the highest subsidy of1180,000.
This kind of money-burning war is to see who has the strongest financial resources, during which a large number of small brands will be shuffled out. According to the survey data of Tianyan, in the first half of 2020 alone, 1. 8 million e-cigarette enterprises were cancelled by industry and commerce.
At the same time, with the increasingly fierce money-burning war, the greed of capital is also reflected incisively and vividly.
In order to gain new customers, e-cigarette brands began to open stores for young people, such as university towns, cinemas, online celebrity streets and even canteens at the entrance of primary schools.
According to the report of Xinhua News Agency in 20 19, the number of e-cigarette users in China has reached100000, among which 15-24 is the highest. Those e-cigarette brands that once advertised "social responsibility" did not make many people really quit smoking in the end. Instead, it becomes the "first cigarette for young people" under the signboard of fashion and trend.
E-cigarettes finally revealed their original sin at this moment.
Will e-cigarettes have a future?
With the development of e-cigarette industry in China today, the business pattern seems to be "the overall situation has been decided". York, the industry leader, now accounts for nearly 80% of the market, while companies such as Xiaoye and Grapefruit account for the remaining 20%.
In addition, there are a large number of small companies whose lives are on the line and will soon be swept out of the house.
However, the "hammer of supervision" that can truly subvert the industry has not yet arrived.
On March 22nd, 20021year, the Ministry of Industry and Information Technology issued the Decision on Amending the Regulations on the Implementation of People's Republic of China (PRC) Tobacco Monopoly Law (Draft for Comment), adding a clause in the supplementary provisions: "New tobacco products such as electronic cigarettes shall be implemented with reference to the provisions of these regulations on cigarettes. "
In the future, if the e-cigarette industry is completely managed according to cigarettes, the brand will face two fatal blows: heavy taxes and monopoly.
According to the research of CITIC Securities, the overall tax burden of domestic traditional cigarettes accounts for about 62% of the terminal retail price. This means that if heavy taxes are imposed on e-cigarettes according to traditional cigarettes, the price of e-cigarettes will be forced to rise by about 2 times.
This price shock is not affordable for young e-cigarette consumers and brands.
In addition, if the state implements a "licensing system" for e-cigarettes, local tobacco companies are allowed to join the industry competition. Then, the production and retail channels of traditional tobacco companies are all over the country, and even the industry leaders can hardly resist the admission of the "national team".
Of course, looking back, it is always a good thing that the e-cigarette industry is strictly regulated.
Egged on by capital, today's e-cigarette industry has been alienated from the initial intention of "quitting smoking" to "the first cigarette for young people", and society can no longer tolerate the "barbaric development" of e-cigarette industry.
I believe that in the near future, with the heavy hammer of supervision falling, those greedy and crazy capitals will eventually usher in their own doom.
E-cigarettes will also return to their original intention of "quitting smoking".
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