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In 2003, Chinese pharmacist han li invented the first nicotine-based glass bongs from china product, the cigarette.Between 2005 and 2006, cigarette sales reached nearly 1 billion yuan.However, with the CCTV exposure, such as smoking fraud, the state tobacco monopoly administration demanded control, such as cigarettes must be withdrawn from the domestic market.
China has not become the largest market for e-cigarettes, but it has become the largest manufacturer, producing more than 90 percent of the world's e-cigarette devices in shenzhen.At the same time, the global e-cigarette market is growing rapidly, and e-cigarettes have become a popular culture abroad.In 2014, "e-cigarette" was chosen by Oxford's dictionary of the year.In December 2018, marlboro manufacturer Altria paid $12.A 35% stake in America's e-cigarettes, worth $38 billion, brought in $8 billion, more than SpaceX or Airbnb.
This is, of course, a milestone for the e-cigarette industry, and at its heart is the wealth effect of overseas pioneers.In the case of the bid, the wind immediately blew back to China.But compared with the track that VCS used to like, e-cigarettes are not an area with a "reasonable" threshold.
There are more than 600 lookah glass for sale manufacturers in China, and the new third board lists typical companies such as ingebus, malkiel and five rounds of electronic products.Emerging e-cigarette brands are mostly offered by agents such as McWeir, who carry logos and ship through their own channels, agents and distributors.
Electronic cigarette sprayers, batteries and so on are not difficult to produce, the most important is the manufacturer of the bomb.According to tencent's technology, there are no more than 10 domestic companies capable of developing synthetic nicotine salts, and the pricing power and profit points of cigarette bombs are basically in the hands of these research and development factories.
It takes you months to six months to get in touch with the suppliers and prepare the product and the design, and you don't have to do anything else, hardly any hard work, it's basically a light business."Fu qiang, an early investor, told the venture nation reporter.The limitations of raw materials and suppliers also lead to limited room for product differentiation.
Still, a lot of entrepreneurs are moving into e-cigarettes, and one of the key factors is the high gross margins in the e-cigarette industry."There are two parts to e-cigarettes: cigarette makers and cigarette bombs.Cigarettes can have a gross profit of 80%, cigarette bombs can also have a profit of 20% or 30%, the average gross profit is close to 50%."Even if there is more competition, if the profit on the volume is substantial, it will be reduced to 20 percent," said fu.
In addition to high gross margin activities, another attraction of the e-cigarette industry is the potential market space.Li kanglin, a partner at tiantu capital, told reporters that the current boom in e-cigarette startups is mainly due to the huge market space for this new category.China has twice as many smokers as the United States, but only 1 percent penetration Of e-cigarettes, compared with 13 percent in the United States, according to the China Institute Of Industry.
Low threshold, high gross margin, large market space, can be regarded as a "sexy" enterprise?
Business models and risk
Lee started looking at glass bong king in the second half of last year, and after studying all the companies in the market, he said, "there is still opportunity in this market," and there are more specific goals.We also need to wait for a clearer picture of the company's data, architecture and so on.The market as a whole should not grow for long.After the capital structure is formed, the next step will be to compete and seize market share.
As technology and product barriers are flat, the key to competition is undoubtedly brand marketing and channels.
Yule's success in the us market is also due to good brand marketing.One of its founders graduated from Stanford university and worked in apple's design department.Yul is also popular with young people, and its cigarette bombs often come in a variety of colours and flavours, such as cucumber, mango and custard pudding.In the end, we won the first market share in the United States, mainly for marketing in 2017 and 2018.They pay particular attention to teenagers' frequent use of social media, such as Instagram.
The core of e-cigarette entrepreneurship, Mr. Lee said, is that the team should know the brand, but the industry background isn't that important.In lee's view, e-cigarettes are not tobacco per se, but rather a fast-selling product similar to a casual snack.Consumer products themselves don't have much product innovation.When it comes to product differentiation, most people can't drink the difference between Pepsi and Coca-Cola.