"Do you have a certificate?" Now it has become a greeting for practitioners in the entire e-cigarette industry.

On July 4th, according to the website of the State Tobacco Monopoly Administration, the State Tobacco Monopoly Administration has recently researched and formulated the "Work Plan for Supervision and Guidance Services for Electronic Cigarette-related Manufacturing Enterprises", which includes coordinating the administrative licensing of electronic cigarettes and guiding the platform transactions of certified entities. .

  A number of e-cigarette offline store staff recently told Shell Finance reporters that their stores have obtained a tobacco monopoly retail license.

According to the "Measures for the Administration of Electronic Cigarettes", a license should be obtained for the production, wholesale and retail business of electronic cigarettes.

The conditions for applying for a license and the requirements for submitting materials are also different in different links.

  A former RELX e-cigarette franchise store owner in Cangzhou, Hebei said, "Report to the (local) Tobacco Monopoly Bureau in advance, they will go to the field to verify, and they will give you the approval if they meet the requirements." The heads of several e-cigarette stores in Beijing also said, "(Applying for a certificate) basically doesn't take much effort."

Some listed companies have also issued announcements to disclose the progress of relevant licenses.

According to statistics from the official website of the State Tobacco Monopoly Administration, as of June 30, a total of 35 e-cigarette-related companies have had their production licenses completed.

  Along with the application and issuance of relevant licenses, the national unified electronic cigarette transaction management platform (hereinafter referred to as the "trading platform") has also been officially launched on June 15.

According to the website of the State Tobacco Monopoly Administration, as of now, most of the certified e-cigarette-related manufacturers, e-cigarette wholesalers, and e-cigarette retail entities have completed membership registration on the trading platform... E-cigarette administrative licensing, technical review, trading Platform operation and other work are progressing in an orderly manner.

  Although some enterprises and retail stores have obtained relevant licenses one after another, in fact, the majority of entities who cannot obtain relevant licenses account for the majority.

  Some securities dealers in the industry believe that with the gradual implementation of domestic e-cigarette regulatory rules and clear industry policies, my country's e-cigarette industry has officially entered a new era of regulated development with rules to follow.

In the short term, the policy window period will help the smooth transition of all aspects of the industry; in the long run, with the clearing of substandard products and production capacity, it will promote the concentration of market shares and benefit leading companies in production and branding.

Production enterprises work overtime to apply for licenses

35 related enterprises have obtained production licenses

  Fan Yu's tobacco monopoly retail license was issued in early June. He is the owner of a RELX electronic cigarette franchise store on the street in a community in Chaoyang, Beijing. "It didn't take much effort."

In fact, many e-cigarette store staff said that the application for a retail license is relatively simple.

"It can be applied in less than a week. The staff of the Tobacco Bureau came to handle it."

  "Stores are in the process of obtaining certificates one after another. As long as they operate legally and meet the retail layout of various places, they should be able to obtain them." said Yan Junjie, head of the marketing department of Weiita's e-cigarette brand.

  Compared with the license in the retail sector, the application threshold for e-cigarette production and wholesale licenses is much higher.

According to relevant documents, obtaining a tobacco monopoly production enterprise license shall meet the following conditions: have funds suitable for production; have the required technology and equipment conditions for production; meet the requirements of the national e-cigarette industry policy; condition.

  At the same time, according to relevant regulations, before September 30 this year, the first batch of license applications and processing in the industry are mainly for those who have registered with the market supervision department before November 10, 2021 and truthfully complete the information declaration of electronic cigarette production and operation entities. The main body of the stock electronic cigarette.

  Shell Finance reporters learned that many companies and brands have submitted relevant materials for review.

"For producers, especially domestic factories and brands, the core point is to meet the requirements of national standards (ie national standards), and corresponding research and development and third-party agency testing and certification are required." Zhao Yangbo, co-founder of e-cigarette brand Shiwu It is said that Shiwu has basically completed the research and development and preparation of national standard products, and is waiting for the review of the relevant regulatory authorities.

  Liu Feng, co-founder of another well-known e-cigarette brand in China, also said that his brand is applying for a production license.

At present, some products have passed the new national standard test, and the overall progress is progressing in an orderly manner under the planning of the General Administration.

"At present, the difficulty is mainly reflected in the review and certification of products, including the safety test of cigarette rods, the flavor test of pods, etc. Because there is no way forward, we need to explore. The Tobacco Bureau also worked overtime to give guidance. According to me As far as I know, the Tobacco Bureau has no rest during the statutory holidays such as May 1 and the Dragon Boat Festival this year. Of course, factories and brands are also working overtime to prepare for the license application.”

  "Strictly speaking, it is still relatively difficult." Yan Junjie, the head of the marketing department of Weiita's e-cigarette brand, also told Shell Finance reporters that both the reviewer and the brand side are implementing this standard for the first time, and they need to be familiar with and adapt to it.

There are hundreds of testing items, and the technical information submitted by a single SKU is one or two hundred pages. It takes nearly 2 months for the brand side and the technical testing side to complete.

"However, as long as companies that attach importance to technology research and development should be able to pass, the Tobacco Bureau and testing institutions will also provide training guidance for some content that is not clear. The company has been trained.”

  Some companies have already obtained production licenses.

On June 13, Jincheng Pharmaceutical issued an announcement stating that the application for the (new) tobacco monopoly production enterprise license proposed by its wholly-owned subsidiary Shandong Jincheng Pharmaceutical Chemical Co., Ltd. was reviewed by the State Tobacco Monopoly Administration in accordance with the law, and it was deemed that it met the statutory conditions and decided to Granted (new).

  According to statistics from Caitong Securities on the official website of the State Tobacco Monopoly Administration, as of June 30, a total of 35 e-cigarette-related companies have had their production licenses completed, including 4 nicotine manufacturers and 17 e-liquid atomizer manufacturers. There are 4 e-cigarette product/brand companies and 10 e-cigarette supply chain companies.

  "At present, the production licenses for brands and factories have been issued in the upstream, and more are still on the license issuance of e-liquid production enterprises. At the factory and brand side, because more testing and inspections are involved, it is still in the A state of gradual approval and issuance; downstream retailers have also begun to issue licenses one after another, in accordance with the guidelines announced by various provinces and the relevant regulations on the number of stores." It is not yet possible to estimate the overall pass rate, but relative to the number, in the future Changes in product standards and regulatory forms of processes will also have a greater impact on the industry.

"Zhao Yangbo, co-founder of the e-cigarette brand Shiwu, concluded with a reporter from Shell Finance.

  The e-cigarette wholesale enterprise license is special.

The "Licensing Instructions" stipulates that the conditions for obtaining a tobacco monopoly wholesale enterprise license are: having obtained a tobacco monopoly wholesale enterprise license, and meeting the requirements for a reasonable layout of electronic cigarette wholesale enterprises.

  Liu Feng said that this regulation means that only companies that have obtained a tobacco wholesale license, that is, local tobacco business companies, can apply for an e-cigarette wholesale enterprise license.

  Zheng Rong, a professor at the University of International Business and Economics and director of the World Health Organization's Tobacco Control and Economic Policy Cooperation Center, also supports this opinion, "Since e-cigarettes have implemented a monopoly system, they must still follow the monopoly management model, so there is a high probability that China Tobacco's Commercial companies come to participate in the wholesale segment.”

Brands step up research and development of tobacco-flavored products

Specialized stores gradually transformed into collection stores

  Although relevant licenses have been issued one after another, new tobacco-flavored electronic cigarettes are rarely seen on the market, and most of them are still fruit-flavored products.

A staff member of a grapefruit e-cigarette direct-sale store in Chaoyang District, Beijing told Shell Finance reporter, "(fruit-flavored pods) have been discontinued at the end of April, but there is still a little stock." Another RELX e-cigarette store staff said, "( Fruit Flavor) The previous supplier is no longer available, and we are looking for other channels to increase the price."

  The national standard for "electronic cigarettes" will be officially implemented on October 1 this year.

The State Tobacco Monopoly Administration stated that after the transition period, products that have not passed the technical review shall not be marketed in China.

Under this policy background, various e-cigarette brands have stepped up the development and production of new tobacco-flavored e-cigarette-related products that are close to the national standard.

  Zhao Yangbo said that Shiwu's new tobacco flavors have been developed and reserved in various aspects, and the technical review is also actively advancing.

But the taste standard is a new standard form, which is difficult for many brands including Shiwu.

He predicts that some new tobacco flavors may appear in the market in July-August.

Liu Feng's brand has also submitted nearly 100 products for inspection. "Now the inspection agency is very busy, and they are working overtime. Every week, products will be inspected one after another. Some brands have already started putting traditional tobacco flavor cartridges in advance, and It will be launched on the e-cigarette transaction management platform as soon as possible.”

  At this stage, Weiita e-cigarettes are producing national standard product tasting packages that are distributed free of charge to licensed retail store owners. Yan Junjie, the head of its marketing department, said that some technical standards have been implemented by Weiita for a long time.

"At present, let everyone feel our products first, and make some appropriate adjustments according to everyone's opinions."

  Although most of the new tobacco-flavored e-cigarettes have not yet been launched, many e-cigarette stores have become collection stores in accordance with policy regulations.

Taking the above-mentioned grapefruit e-cigarette direct-sale store as an example, you can also buy e-cigarettes from brands such as RELX, FLU, and SNOWPLUS in the store.

In the above-mentioned RELX e-cigarette stores, Dahuancai e-cigarettes and Fulu e-cigarettes can also be purchased.

"Now it is all required to open a collection store, otherwise it will not be able to operate in the future, nor will I be able to obtain a certificate." The staff of the above-mentioned grapefruit electronic cigarette direct store told Shell Finance reporters.

  The original business model of the electronic cigarette industry is basically based on franchise. Liu Feng said that his brand has cancelled the exclusive restrictions in the original store contract in May this year, and also encouraged the original store partners to actively and in the future. Compliant brand owners and factories that have obtained licenses cooperate with each other.

In the next store operation service, it will try the service provider model, and the third-party company on the ground will provide professional operation services to the store.

Supply will be the responsibility of local tobacco commercial companies.

Zhao Yangbo said that the situation about the collection store is still in the transition period. After the transition period, the purchase of goods will go through the national unified trading platform, the storefront will be in charge of the retail store manager, and the distribution and supervision of the goods will be in charge of the tobacco regulatory department.

  Even if it has turned into a collection store, the clerks still have different emphasis on the sales of each brand.

The staff of the above-mentioned grapefruit direct-sale store admitted that they still focus on their own original brands in the sales process, supplemented by other brands. Focus on the products you sold before, because you must be more familiar with the previous things." However, she said that she would also consider the sales of specific brands, "It must be the main brand to see which brand sells well."

  At present, the prices of fruit-flavored electronic cigarettes in various stores have not changed much compared with before.

However, there are also some store owners who advise customers to stock up as appropriate in the circle of friends.

"The price may be appropriately increased next month depending on the situation."

Changes in channels and transaction forms

A new tobacco tax is on the horizon

  Although some enterprises and retail stores have obtained relevant licenses one after another, in fact, the majority of entities who cannot obtain relevant licenses account for the majority.

  Taking retail licenses as an example, according to the statistics of Blue Hole's new consumption, it is expected that 55,000 licenses will be issued nationwide, but there are currently 50,000 electronic cigarette specialty stores and nearly 200,000 FMCG retail stores in China.

  "For retailers, the difficulty lies in the location and operation of the retail point (that is, the point of the specialty store), for example, the point is too close to the school, or there are too many e-cigarette-related points around the point, which may affect the retail license. certificate." Zhao Yangbo, co-founder of the e-cigarette brand Shiwu, explained.

  In Zhao Yangbo's view, the approval and issuance of industry licenses in the upstream will eliminate companies that are not compliant and are not committed to the industry for a long time; in the downstream, because of the major changes in the product form and channel transaction form, the confidence of shop owners may be It will also be affected to a certain extent, and it needs to be gradually restored according to market conditions after compliance.

  Liu Feng, the co-founder of a well-known domestic e-cigarette brand mentioned above, said that with the clarification of laws, regulations and supervision, the industry will be reshuffled, which will be good for manufacturers and businesses with a certain scale and legal compliance. The solution of the problem will also have a positive impact on the minds of users, and the industry will usher in a healthy and orderly long-term development.

  Prior to June 15, the national unified electronic cigarette transaction management platform (hereinafter referred to as the "trading platform") was officially launched.

"Currently the platform is still in the trial operation stage, and the official operation estimate should be after the transition period, during which it should be a process of gradual switching and adaptation." Zhao Yangbo said.

  The "Detailed Rules for the Administration of Electronic Cigarette Transactions (Trial)" stipulates that the market determines the price, and establishes and improves the price formation mechanism of electronic cigarette products mainly regulated by the market.

In Liu Feng's view, the field of electronic cigarettes will be a market priced and fully competitive in the future.

The next biggest change in price will be the tax adjustment, from the current ordinary tax to a new type of tobacco tax.

Zhao Yangbo said that the overall transaction chain of the market after compliance has changed a lot from before. The price is not simply affected by the production cost of the product. Changes in channels and transaction forms will also have a greater impact, and further observation is needed. .

  Zheng Rong, a professor at the University of International Business and Economics and director of the World Health Organization's Tobacco Control and Economic Policy Cooperation Center, believes that although the regulations say that prices are mainly determined by market conditions, the official control factor will be larger.

"Since it is a tobacco monopoly, the price must be modeled after cigarettes. Taxes will also be involved later."

  At the same time as the industry supervision has become stricter, many e-cigarette brands have further focused their business on exports.

According to industry data, there are currently more than 1,500 electronic cigarette manufacturers and brand enterprises in my country, and more than 70% of them mainly export their products overseas.

Some hold on, some quit

The e-cigarette industry will continue to reshuffle

  With the successive introduction and implementation of a series of new regulations, the attitudes of e-cigarette practitioners have also diverged: some people choose to wait and see, some people have the intention to withdraw, and some people continue to stick to it.

  Ms. Li from Tianjin was previously a franchisee of Magic Flute Electronic Cigarettes, but two of her stores were closed not long ago. One of the stores was because the rent of the mall was too high, and it was difficult for her to continue. The other store was because of the high rent. Too close to school.

At this stage, Ms. Li is taking care of the previous supermarket business while continuing to wait and see the e-cigarette market. She plans to wait until the new regulations are officially implemented in October to see the situation. "If the cost of reopening a store in Tianjin is too high, then if ( Supermarkets) will change jobs if they fail to apply for a permit.

  There are also e-cigarette practitioners who worry that the profit from selling only tobacco-flavored e-cigarettes will not be enough to cover the cost of rent and labor, and because some indicators do not meet the standards, they feel that it is difficult to obtain a certificate, so they retreat, "Sell the inventory to ten with peace of mind. It will be closed in the month of June."

  Still, some continue to be bullish on the prospects of e-cigarettes.

"When you have a choice, the fruit flavor will definitely sell better than the tobacco flavor. When you don't have a choice, it just needs to be better than cigarettes." Fan Yu used to be in the catering business. From 2019 to the e-cigarette field until today, He thinks that this business is relatively easy and simple. "Customers can take whatever they want." Leaving aside the cost of rent and other costs, he earns more than 10,000 yuan a month.

  [4] Of course, this business also has a "grinding" side. Most of the people who come to the store to buy e-cigarettes are old customers from surrounding communities. Stay until the early hours of the night, an average of 15 hours a day.

Regarding the recent introduction of a series of new regulations in the field of electronic cigarettes, he is relatively stable, "Worrying does not mean much to me, I tend to follow the national policy and see how to go. If customers are not satisfied, they will not smoke electronic cigarettes, nor I can only do other projects.”

  Some people have also tried to enter the "siege" of electronic cigarettes.

  Mr. He, a friend of Ms. Li in Tianjin, works as a manager in a hotel, and occasionally helps Ms. Li to post product pictures in WeChat Moments to promote electronic cigarettes.

Mr. He recently told the Shell Finance reporter that he also wanted to open an offline store for e-cigarettes. "I'm too busy at work now, and I want to be free and relax." He also plans to wait until October 1st to see that one. The current e-cigarette market.

(At the request of the interviewee, Liu Feng is a pseudonym in the text.)

  Beijing News Shell Finance reporter Sun Wenxuan

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