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The process of e-cigarettes going overseas: going out, going in, and going up

November 04, 2024
In recent years, the e-cigarette market has shown a booming development trend, and its global sales have been rising year by year. According to relevant data, in the past five years alone, the global e-cigarette market size has increased by 40%, and the overseas market has become a new blue ocean for many e-cigarette companies to compete for.

We can clearly see that in recent years, my country's e-cigarette export business has been steadily moving on the right track and showing a good trend of continuous development and growth. Especially under the background of a series of new regulations being promulgated, the prospects of the domestic e-cigarette market have become confusing and full of many uncertainties. Although these new regulations focus on the long-term and healthy development of the industry and aim to regulate the market order, they do bring considerable challenges to enterprises in the short term.

In order to ensure the standardized operation of the brand, many e-cigarette companies and manufacturers have vigorously expanded overseas markets, and "going overseas" has become a common choice for the entire e-cigarette industry. As time goes by, the demand for companies to expand overseas markets has become increasingly strong. Everyone hopes to occupy a place on the international stage and further promote the vigorous development of their own business.

However, is the road to overseas expansion really that easy? How can e-cigarette companies achieve their goals step by step when entering overseas markets?

No.1 Analysis of the current development status of the Electronic Cigarette industry

1. Mainly export, with European and American markets as the main force

China's e-cigarette market is mainly exported, with exports accounting for about 85% in the long term. After reaching a peak in 2021, exports have fallen back due to tightening global regulations. Disposable e-cigarettes are mainly exported to Europe and the United States, especially the United States and the United Kingdom. With the implementation of domestic market regulations, e-cigarette brand stores are gradually transforming into collection stores, and the competitive landscape has undergone profound changes.

2. Global market size fluctuates, with strong demand in North America and Western Europe

The global e-cigarette market has also experienced a process of substantial growth and decline. North America and Western Europe have become the world's major e-cigarette consumer markets, and local consumers have shown a high degree of acceptance of e-cigarettes. E-cigarettes have been rapidly popularized in these regions and the market demand is strong.

However, with the tightening of global regulatory policies, the market size has shrunk to a certain extent. However, even in the face of many regulatory restrictions, from the overall development trend, the global e-cigarette market is still showing a gradual recovery trend, and the industry is constantly adapting to the new regulatory environment and seeking new development opportunities.

No.2 Aiqiqi and RELX are pioneers in overseas expansion, with remarkable results

Aiqiqi (Shenzhen) Technology Co., Ltd. was established in 2007 and is one of the earliest electronic atomization export companies in China. In 2009, it established the foreign trade independent station platform heavengifts to help Chinese electronic atomization brands go overseas.

After the Shenzhen company was established in 2014, it quickly grew into a leading e-cigarette export company. From 2020 to 2022, it launched world-renowned brands such as elfbar and lostmary. So far, its business has spread to more than 100 countries and regions, serving more than 10 million users worldwide, with more than 100,000 retail outlets worldwide.

RELX's overseas exploration began in 2019. Half a year after entering the Southeast Asian market, it occupied the top position in the local e-cigarette market and quickly accumulated millions of consumers in more than 40 countries around the world.

In 2021, the new company "RELX International" responsible for RELX's overseas business was officially established, and its global development accelerated again. At present, RELX International has reached cooperation with many top international distributors and well-known global and local retail chains, and has established offices and bases in 21 countries and regions. It maintains a leading position in Southeast Asia, New Zealand and other regions, and its share in developed countries such as the United Kingdom and Spain is also increasing.

No.3 Enterprises are actively seizing overseas markets, and new ways of going overseas are emerging.

As the world's largest exporter of e-cigarettes, China occupies an important position in the e-cigarette industry. Many domestic e-cigarette companies have actively joined the wave of seizing overseas markets by relying on their own advantages in technology research and development, product innovation and cost control.

They either participate in international e-cigarette exhibitions to showcase their special products and expand their personal connections, or use e-commerce platforms to break through geographical restrictions and achieve online sales, or go deep into target markets to carry out ground promotion activities to increase brand awareness. They are all doing everything they can to get a share of the fiercely competitive overseas e-cigarette market and further promote the vigorous development of China's e-cigarette industry on a global scale.

No.4 Going overseas becomes a better choice for manufacturers

Since the implementation of the new national standard for e-cigarettes in China, the industry has faced unprecedented challenges. The new policy's restrictions on e-cigarette oil flavors have undoubtedly restricted brand diversity and innovation capabilities. At the same time, restrictions on e-liquid factories will also affect many e-cigarette brands.

However, against the backdrop of strengthened domestic regulation, e-cigarette companies are welcoming new opportunities: the tightening of the domestic market coexists with the expansion of the international market. The implementation of the new national standards and management measures heralds a major change in the e-cigarette market landscape. The door to domestic development seems to be closing, while the door to overseas markets is opening to us, providing companies with a new growth path.

NO.5 Overseas exhibitions are the core "springboard" for expanding overseas markets

In the process of e-cigarettes going overseas, the exhibition stage is crucial, especially focusing on foreign exhibitions, which is the key to expanding overseas markets. Many e-cigarette companies actively participate in well-known foreign e-cigarette exhibitions, such as the Las Vegas E-cigarette Exhibition in the United States, the Berlin E-cigarette Exhibition in Germany, and the Dortmund E-cigarette Exhibition in Germany.

Through these exhibitions, companies can fully display their products and brand image, and present the advantages of e-cigarette appearance, technology, taste, etc. to global professional audiences. More importantly, they can establish close ties with distributors, agents, retailers, etc. around the world, communicate face-to-face at the exhibition, discuss cooperation, and open up channels for products to enter overseas markets.

At the same time, the exhibition is also a frontier for insight into international market dynamics and trends. Enterprises can understand cutting-edge technology, emerging demands, policy orientations, etc., and adjust their own strategies accordingly. It can also collect information and feedback from potential customers. Through on-site exchanges, questionnaires, etc., first-hand information is obtained for optimizing products and services.

At the Birmingham Electronic Cigarette Exhibition in the UK which just ended some time ago, there were more than 300 companies and more than 500 electronic cigarette related brands participating in the exhibition, including disposable equipment, open systems and e-liquid brands, etc. With the vigorous development of the electronic cigarette industry, more and more companies are focusing on overseas markets and continuously participating in major exhibitions, hoping to enhance the international reputation of their brands and gain a deeper understanding of the needs of consumers in different regions, thereby seizing a place in the fierce competition in overseas markets and achieving sustainable development of the company.

No.6 E-commerce going global takes advantage of the Internet to open up new overseas blue oceans

With the booming development of the Internet and the growing strength of global e-commerce platforms, many e-cigarette companies are no longer satisfied with the traditional exhibition method, but are taking advantage of this opportunity to start their e-commerce overseas journey.

Some well-known vertical websites have a huge user base, cover a wide range of global markets, and have a convenient and efficient shopping process, providing an excellent platform for the overseas sales of e-cigarette products. Companies open online stores on these platforms and sell products directly to overseas consumers, which can break through the geographical restrictions faced by traditional sales channels, reduce sales costs, and quickly expand the sales scope of products.

However, under the influence of policies, the control of online sales channels has been continuously tightened, and all aspects are moving towards more stringent standards, striving to comply with policy regulations, so that the entire e-cigarette industry is gradually moving towards a more compliant and orderly development track.

No.7 Launch mainstream promotion methods for overseas brands to make products popular

When companies have a deeper understanding of the target overseas market, overseas marketing becomes a powerful measure to further expand the market. Overseas marketing has also become a mainstream way for many brands to expand the market. Through on-site promotion activities in local overseas locations, they communicate with potential customers, thereby effectively enhancing brand awareness and promoting product sales.

Brands form professional marketing teams in overseas markets, whose local members are familiar with the local market environment, cultural customs, and consumer habits. They go deep into overseas shopping malls, supermarkets, convenience stores and other places with dense traffic, vigorously carry out various forms of offline promotion activities, or expand their business by finding offline retail stores.

We also choose to establish long-term and stable cooperative relationships with overseas distributors, agents, retailers and other channel partners, and leverage their channel resources and local advantages to distribute our products more widely to every corner of the overseas market.

NO. 8 Accelerate development and expand global market share

In today's globalized business wave, companies need to establish their own brand image in overseas markets in pursuit of long-term development. More and more companies are increasing their brand visibility and influence through advertising, public relations activities, social media marketing, etc. At the same time, they are constantly optimizing products and services, strengthening interaction and communication with consumers, and establishing good brand reputation and loyalty.

At the same time, many companies have taken an important step, namely, launching their own brands overseas to fully cover overseas markets and start the journey of brand globalization. In the globalization stage, companies regard the global market as a whole, coordinate product research and development, production, sales and marketing, and achieve optimal resource allocation and coordinated development of global business, thereby occupying a place in the fierce international market competition and laying a solid foundation for the long-term development of the company.

No.9 After the e-cigarette market is regulated, the smoke-free era will be a healthier development trend

As the global e-cigarette market continues to develop and mature, e-cigarettes will develop towards a more standardized, smoke-free, harmless and healthier trend in the future. In 2024, my country further refined the technical review management of e-cigarette products, requiring all e-cigarette products sold in China to pass technical review. This series of policy measures marks that the e-cigarette industry has officially entered an era of strong regulation.

And judging from the performance report of British American Tobacco (BAT), the e-cigarette business in the United States has grown significantly, and the growth in emerging markets has exceeded 50%, which also shows the strong growth momentum of e-cigarettes worldwide.

1、Philip Morris International maintains high growth rate, smoke-free business takes the lead. As traditional cigarettes continue to decline in Europe and the United States, the transformation to new tobacco has become the only choice for international tobacco companies. Philip Morris International (PMI) is an early entrant in this process. Now, after years of investment, the smoke-free business has finally taken the lead.

In the past second quarter, PMI's smoke-free business accounted for 38.1% of total quarterly revenue, 2.7 percentage points higher than the same period in 2023. About 36.5 million adult users used its smoke-free products, an increase of 3.2 million from December 2023, and its smoke-free products have entered 92 markets.

At the same time, it maintained a high business growth rate, with Q2 net income increasing by 13.6% (organic growth of 18.3%) and gross profit increasing by 15.6% (organic development of 22.2%). PMI's smokeless business focuses on two major tracks: heated tobacco and oral tobacco, with the main brands of IQOS and ZYN, while the performance of atomized electronic cigarettes is relatively mediocre. These data show that electronic cigarettes are gradually becoming a substitute for traditional tobacco, providing consumers with a healthier choice.

2、UK and EU: One-time regulation is becoming stricter, and cartridge-changing e-cigarettes are expected to benefit. In addition, global compliance is expected to accelerate, and leading companies may benefit. The growth of the US e-cigarette market is stabilizing, and there may be policy disturbances in the Western European e-cigarette market, but overall, e-cigarette demand is mainly in Europe and the United States, and regulation is still the main variable for future growth.

With the strengthening of FDA law enforcement and the potential intervention of the Trade Commission in supervision, the US compliance market is expected to grow steadily in the future. In the UK and the EU, the regulation of e-cigarettes is gradually becoming stricter, especially the UK's restrictions on disposable e-cigarettes from 2025, which may prompt the market to shift to more standardized and environmentally friendly cartridge-type e-cigarettes.

In summary, the future trend of e-cigarettes is to develop in a more standardized, harmless and healthy direction, which not only meets consumers' pursuit of a healthy life, but also responds to the strengthening of tobacco product supervision worldwide. With the continuous advancement of technology and product innovation, e-cigarettes are expected to become a safer and more environmentally friendly nicotine consumption option.

Each stage of e-cigarettes going overseas is like a solid step by step, witnessing the unremitting efforts and progress of e-cigarette companies in exploring the international market. Each stage contains opportunities and challenges. Only by accurately grasping the pulse of the market, constantly optimizing products, improving services, and innovating marketing, can e-cigarette companies ride the wind and waves in this magnificent overseas journey, achieve deep roots and sustainable development in overseas markets, and write their own glorious chapters.

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