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How much impact does COVID-19 have on the e- cigarette industry ? November 4,2020.

According to the data of the E-Cigarette Industry Committee of the China Electronic Chamber of Commerce, since COVID-19, the domestic and foreign e-cigarette industries have faced varying degrees of opportunities and challenges:


China: China is the global production base for e-cigarettes, and smoking accessories alone account for 95% of the global share. The United States and the United Kingdom are the world's first and second largest consumers, respectively, and the most important consumers of e- cigarettes in China. Domestic e-cigarette companies have successively resumed work at the end of February, and basically resumed work at full capacity in March. During covid-19 period, demand for overseas orders was strong, and the export value from January to April was estimated to be 10 billion yuan, which was the same as the same period in 2019, and achieved rapid growth in April. At the same time, many domestic e-cigarette companies are also increasing investment, including product research and development and equipment investment, and are also stepping up to improve their own strength during the "special period". We believe that this means that practitioners are optimistic about the future development of the industry.


United States: The United States is the world's largest consumer market for e-cigarettes, accounting for more than 50% of the global share. It is the vane of the global e-cigarette industry and the most concerned market for the industry. According to data from the American E-Cigarette Technology Exchange Industry Association (VTA), the impact of covid-19 began in mid-March. The first is the slowdown in imports, which prevents distributors from shipping products. Among the 43 states that implemented the "stay at home" restriction order, only 10 states have e-cigarette retail stores still open, and 3 states only allow roadside delivery. However, it is also difficult for these stores to supply their own products. E-liquid manufacturers in the United States also converted their production lines to hand sanitizers to support the fight against covid-19. In June, almost all states have resumed business, and only some areas have not yet reopened. It is worth noting that under the requirements of the VTA, the FDA’s PMTA deadline for e-cigarette companies has been extended from May 12, 2020 to September 9, 2020, buying time for global e-cigarette companies intending to open up the US market. At present, China's leading e-cigarette companies such as Mcwell (the parent company Smolar has been listed on the Hong Kong stock market) and RELX are preparing for PMTA.


United Kingdom: The United Kingdom is the world's most supportive country for e-cigarettes and the second largest exporter of e-cigarettes in China. According to data from the British Electronic Cigarette Industry Association (UKVIA), there are currently more than 3,000 e-cigarette shops in the UK, an increase of 10% from last year. British e-cigarette retail stores have suspended store services since March 24 and have reopened in mid-June. Overall, total sales decreased by 30%-60%, of which the sales of open e-cigarette products fell by 60%, but because many stores switched to online sales and provided delivery services, online sales increased by 1500%. In addition, due to the government's subsidies, the profits of these stores are rising despite the decline in turnover. UKVIA believes that the damage to the UK supply chain during covid-19 was mainly due to insufficient supply from China, which made them aware of the need to ensure a stable and secure supply chain with China.


Europe: According to data from the European Electronic Cigarette Association (IEVA), affected by covid-19, since March, physical e-cigarette stores in Germany and most EU countries have been required to close, and they will not open until mid-May. During covid-19, the sales of e-cigarettes were affected, causing wholesalers and factories to face pressure from inventory backlogs and cash flow; the e-cigarette exhibition during the same period was also cancelled. At the same time, due to the government's strict sanitation standards and rising freight costs, the overall product cost has risen by approximately 10%-20%. These costs are mainly borne by wholesalers, which has also kept the wholesale and retail prices stable. IEVA predicts that the European e-cigarette market will grow by 8.0% in 2020. At present, open e-cigarette products are still the favorite styles of European consumers. The association believes that stable e-cigarette consumers (including those who have converted from other products and experienced consumers) will be the main potential of the European market in the future.

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