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Recent Developments in the E-Cigarette Industry 2024/6/5

Recent Developments in the E-Cigarette Industry

1. Qinghai Breaks Major Illegal E-Cigarette Operation Case

Recently, Qinghai’s “2·01” major illegal e-cigarette operation case was sentenced, with the involved individuals receiving legal punishment. This case, the largest e-cigarette network case in Qinghai’s history, was supervised by the Ministry of Public Security. Through the “Cloud” system, the Ministry successfully launched the nationwide E-Cigarette No. 2 Campaign, targeting the entire supply chain across the country.

A total of 12 suspects were arrested, with 11 in criminal detention and 1 on bail. The operation dismantled 8 criminal dens and seized over 360,000 e-cigarettes worth more than 20 million RMB. The case involved over 150 million RMB, with 13 million RMB in funds frozen.

2. RLX Technology Announces Q1 2024 Financial Results

On May 17, RLX Technology released its unaudited financial results for Q1 2024. The report shows net revenue of approximately 550 million RMB, a 6.0% increase quarter-over-quarter and a 192.1% increase year-over-year. Adjusted net profit under non-GAAP was 210 million RMB, down 52.0% quarter-over-quarter but up 13.0% year-over-year.

According to CFO Lu Chao, the company has achieved steady revenue growth for five consecutive quarters, with net income reaching 550 million RMB this quarter, marking a significant turnaround in operational profitability after excluding stock-based compensation expenses.

3. Notice on Adjusting E-Cigarette Business Consultation Hotline

On May 13, the Shenzhen Tobacco Monopoly Bureau announced adjustments to the e-cigarette business consultation hotline. For more details, please click the original text.

4. Malaysia Sees 600% Increase in E-Cigarette Users Over 12 Years

The “2023 Malaysia Adult Tobacco Survey” reveals that the number of e-cigarette users in Malaysia has surged by 600% over the past 12 years. The survey indicates that e-cigarette usage in Malaysia rose from 0.8% in 2011 to 5.8% in 2023. The study involved respondents aged 15 and above, with a total of 5780 households randomly selected from urban and rural areas across the country.

5. South Korea Plans to Regulate Synthetic Nicotine

On May 15, South Korean officials announced plans to amend tobacco-related laws to classify synthetic nicotine as a type of tobacco. The Ministry of Health and Welfare and the Ministry of Economy and Finance are pushing for this legal change. British American Tobacco recently announced plans to introduce a new synthetic nicotine product in South Korea, prompting the legal amendment.

6. Vietnamese Prime Minister Signs Decree to Combat Illegal E-Cigarette Smuggling

On May 14, Vietnamese Prime Minister Pham Minh Chinh signed and issued Decree No. 47/CD-TTg to strengthen the management of e-cigarettes and heated tobacco products, combating illegal smuggling. The Ministry of Finance will direct customs to strictly inspect and control the illegal import of e-cigarettes and heated tobacco through ports and customs areas, establishing a specialized anti-smoking project to combat smuggling gangs.

7. Independent European Vape Alliance Urges Spain Not to Ban Flavored E-Cigarettes

The Independent European Vape Alliance (IEVA) recently urged Spain not to ban flavored e-cigarettes, warning that such a ban could lead to several risks: the proliferation of dangerous, non-compliant products in the black market, an increase in cigarette smoking rates, the loss of over 3,000 jobs in the Spanish e-cigarette industry, and reduced government revenue due to decreased tax income.

8. Nearly 90% of E-Cigarettes in Florida Are Illegal

Data from Circana tracking channels shows that in 2023, e-cigarette consumption in Florida reached $410 million, nearly ten times that of New York State. Illegal e-cigarette sales amounted to $355 million, accounting for over 86% of the market. This data is based only on tracked channels; including underground sales, the actual sales could be twice as much. Illegal e-cigarettes have flooded the Florida market.

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This product contains nicotine. Nicotine is an addictive chemical.