Photo credit: SupChina illustration
American e-cigarette leader Juul made its debut on Chinese markets — specifically, ecommerce sites JD.com and Alibaba-controlled Tmall — on September 9. With a staggering 300 million cigarette smokers in China, the opportunity for growth seemed massive.
But at least for now, Juul’s big plans for China have gone up in smoke. Within days of listing, both marketplaces abruptly removed Juul e-cigarettes — Tmall on September 13 and JD.com on September 17. Juul “wasn’t given an explanation for why its products were pulled,” Bloomberg reported.
This comes as the Trump administration promises to crack down on vaping in the U.S. in the wake of several reported deaths and cases of lung disease among vapers.
Here are some facts to know about cigarettes and e-cigarettes in China, drawn from our SupChina Signal on China’s cigarette smoking epidemic, and a TechBuzz China episode on the rise of e-cigarettes in China:
- A state monopoly controls all cigarette production in China, and contributes between 7 percent and 11 percent of the Chinese government’s annual tax revenues.
- The e-cigarette market in China is small, and Chinese people account for only 3 percent of the global e-cigarette market.
- Hundreds of startups have been founded, however, including Myst Labs, which we highlighted in the July 30 Weekly Briefing.
- The key challenges for companies are the same in the U.S. and China: counterfeiters, unauthorized distribution, and regulatory scrutiny.