Industry News

Brief Introduction of China’s vape industry


China has the largest smoker population in the world, its one of the largest vape market in the world. The vape or e-cigarette industry has exploded in growth over the past couple of years, with early movers benefiting from unfettered access to the largest population of smokers in the world. The vape industry also has massive growth potential.

According to a report from Chinese data analysis firm iiMedia Research, the penetration rate of vapes reached only 1.5% in 2021. This report notes that this is far behind countries like the U.S., the U.K., and Japan, all of which have penetration rates above 30 percent.

There is therefore significant room for expansion if vape business leaders are able to convince more of China’s 300 million smokers to switch to vape products.

Regulations now are the biggest hindrance to the industry’s potential. Until recently, e-cigarettes were regulated as a tobacco product. Companies instead operated in a legal grey area that ultimately enabled it to grow into an RMB 8.3 billion (US$1.3 billion) industry.

This decision, although perhaps not welcomed by the industry, will not come as a surprise; the government began deliberating it back in March 2021, and the pressure on lawmakers to sign off on the decision will only have become more acute as other laws aimed at enhancing the welfare of minors were released in 2020.

The issue of the protection of minors was likely also behind the decision at the end of 2019 to ban the online sale and advertising of e-cigarettes, as concerns rose over how accessible the youthfully marketed product was to minors.

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