Chinese e-cigarette giant secures tobacco production licence, gaining foothold in the world’s biggest tobacco market
Smoore, the world’s biggest contract maker of vaping devices, has secured special tobacco production licence from Chinese authorities through its wholly-owned subsidiary, opening up opportunity for the vape manufacture to increase its footprint in the world’s biggest tobacco market.
Vaporesso, a wholly-owned subsidiary of Smoore, has obtained a production licence from China’s State Tobacco Monopoly Administration (STMA). The licence will be valid through until 2023.
Smoore is among the first batch of companies to comply with China’s tightened rules for the e-cigarette industry, which was not regulated as a traditional tobacco product until recently.
According to STMA, less than 50 e-cigarette related companies have obtained licences from the authority so far.
Electronic cigarette is not yet very popular in China, but the market potential for electronic cigarettes is huge. According to data compiled by the State Tobacco Monopoly Administration, the number of smokers in China reached 315 million as of December 31, 2021, these smoking populations consume approximately 45 percent of world’s cigarettes. So, if only 1 percent of China’s smoking population turned to e-cigarettes, it would mean a market of about 3.5 million e-cigarettes users.
Electronic cigarette is only a tiny proportion of the tobacco business in China, but it offers an entry for investors and electronic cigarette makers to enter into the tobacco market in China where tobacco sales are largely governed by a state monopoly.
Chinese e-cigarette manufacturers including FirstUnion Group, Shenzhen Seego Technology and Shenzhen Smoore Technology have made huge fortune from the rapid growth of e-cigarettes industry. Over 85 percent of the e-cigarettes are produced by firms located in the Pearl River Delta region, mostly in Shenzhen’s industrial Bao’an District, a five-square mile area in the Northwestern part of Shenzhen and only two hours away from the city center.
Electronic cigarettes have been considered as healthier alternative to tobacco smoke. However, any vaping product has not yet approved to help smokers quit, while the other major debate over e-cigarette is the growing use of e-cigarettes among teenagers, which has led to a strict ban from selling and advertising electronic cigarettes online in 2019. Chinese regulator also banned vendors in March from selling flavoured e-cigarettes other than tobacco.