Tobacco Asia

Volume 20, Number 1

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Page 37 of 75

38 tobaccoasia / Issue 1, 2016 March / April) Looking Homeward Throughout the last few months of 2013 and the beginning of 2014, there was a lot of uncertainty regarding regulatory policies on electronic cigarettes in Europe, which had a direct negative impact on overseas sales by Chinese electronic manufacturers. The inevitable choice for them was to shift their fo- cus to the domestic market, which was vital if they were to continue to develop and grow. Existing search engine data from Taobao – China's largest online shopping website – show that there was almost no growth in searches for electronic cigarettes throughout the 2012-2013 pe- riod. Yet, in the second and third quarters of 2014, there was huge spike. E-commerce operators estimate that the gross merchandise volume of electronic cigarettes trad- ed on China's e-commerce platform reached RMB 2 billion (US$320 million) in 2015, and is expected to double in 2016. Although electronic cigarettes are associated with accessories for men, the e-cig- arettes manufactured in China have taken 5% of the global market share, and it took barely a year for the sales value of Chinese e-cigs to go from nearly zero to that RMB 2 billion mark (excluding offline marketing sales!). As Chinese smokers ac- count for one-third of the global total, the poten- tial of this market is vast. In reality, the entry of e-cigarettes into the do- mestic market is an unexpected result similar to sales of export-oriented goods at home. What is different is that the reason for this phenomenon – unlike in some other industries – is not the fluc- tuation of exchange rates or natural decline of de- mand in international markets. Regulatory uncer- tainty in Europe and the US and poor e-cigarette sales due to bans in various international markets prompted the Chinese manufacturers, who used to enjoy good sales abroad and paid little attention to domestic markets, to shift their attention. A large choice of new products (mainly e-cigarettes) have then been offered to Chinese consumers. As far as the whole world is concerned, mere tobacco control efforts can only have limited influence on awareness about abstention from cigarette smok- ing. Rather, it is the various types of tobacco sub- stitutes or new ways of using tobacco that will pique consumers's interest. The electronic cigarettes manufacturing sector of China is set for dynamic business growth through development of both the domestic market and the self-owned competitive brands at a time when leading transnational tobacco giants are rushing to design new types of tobacco products and electronic cigarettes. China's E-Cigarettes: The Way Forward Users of e-cigs often use a high-power BOX smoking set to generate a large amount of smoke. By TobaccoChina Online

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