In March 2022, China issued the “Regulations on the Administration of Electronic Cigarettes”, which stipulated the sales channels of electronic cigarettes and established a nationwide unified electronic cigarette transaction management platform to manage the related business activities of electronic cigarettes. According to this regulation, all electronic cigarette production enterprises, brand holding enterprises, etc. must obtain a tobacco monopoly license in accordance with the law, and sell electronic cigarette products to electronic cigarette wholesale enterprises through the electronic cigarette transaction management platform; Enterprises or individuals who have obtained a tobacco monopoly retail license and have the qualifications for electronic cigarette retail business should purchase electronic cigarette products from local electronic cigarette wholesale enterprises through the electronic cigarette transaction management platform, without exclusivity.
The functions of electronic cigarette brand distributors are now carried out by tobacco companies, but tobacco companies only undertake the “supply” function. The functions of terminal cultivation, market development, and after-sales maintenance must rely on third-party completion. Therefore, e-cigarette brands are beginning to recruit e-cigarette service providers to assist in completing these functions.
Since the official implementation of the Electronic Cigarette Management Measures in October 2022, the electronic cigarette service provider market has indeed experienced some unexpected fluctuations. In the initial stage, due to the broad market prospects of the e-cigarette industry, many people hoped to become e-cigarette service providers. However, with the implementation of e-cigarette regulatory policies, the e-cigarette market was strictly regulated and controlled, leading to restrictions and attacks on some e-cigarette brands and stores, and the survival space of e-cigarette service providers was also affected. In this situation, e-cigarette service providers face many uncertainties and challenges, Some service providers value the future prospects of the e-cigarette industry to forge ahead, while others adopt a cautious attitude and choose to gradually withdraw from the market or switch careers. The main reasons for this phenomenon are as follows:
Firstly, the brand power of electronic cigarettes has an absolute influence on consumer demand choices, making it difficult for new brands to develop. The attributes of electronic cigarette products are highly associated with words such as “harm” and “health”, which leads consumers to pay more attention to the safety, taste, and brand reputation of the products. Currently, the Yueke brand occupies a dominant position in the market, and many electronic cigarette operators choose the policy of ensuring harvest through drought and flood. The main product promoted by the store is mainly Yueke, and several brand products with good market acceptance are selected as supporting products, This leads to the squeezing of sales space for other brands, making it difficult to increase sales.
Secondly, the revenue sources of e-cigarette service providers are lower than market expectations. The profit model of e-cigarette service providers mainly relies on “service fees * sales” to earn service commissions. In the early stage of the immature development of the e-cigarette service provider market, many e-cigarette brand service commission standards often do not conform to the actual market situation, resulting in many service providers being unable to meet the brand’s set standards and even operating at a loss.
Finally, the size of the e-cigarette market is in a phase of contraction. The implementation of regulatory policies and the cancellation of non tobacco flavor sales have affected consumers of e-cigarette fruit flavors, forcing them to undergo consumption transformation or be in a taste adaptation period, resulting in a shrinking consumer market. In addition, the issuance of retail licenses for electronic cigarettes is limited to over 1000 in each economically developed province, while before the policy was implemented, there were over 50000 electronic cigarette stores in China, greatly reducing the size of electronic cigarette stores.
Electronic cigarette service providers can also expand their market and enhance their competitiveness through the following aspects
For current e-cigarette service providers, the most urgent task is to survive in the pain period of the e-cigarette market, enhance their market expansion and competitiveness. The core value of e-cigarette service providers lies in helping e-cigarette brands expand their market and promote brand promotion, as well as promoting terminal sales of e-cigarette products. Further enhance one’s survival and competitiveness around this core through the following steps.
1. Improve the professionalism and quality of services.
In the electronic cigarette industry, professionalism and quality are very important factors. Electronic cigarette service providers should continuously improve the quality and professionalism of their services to win the trust and praise of users, and establish a good brand image.
2. Innovative marketing strategies are also an important aspect of enhancing the competitiveness of e-cigarette service providers. Electronic cigarette service providers should constantly try new marketing strategies, provide attractive promotional activities and preferential policies for users, and enhance brand awareness and market share.
3. Adopt a flexible market strategy to serve multiple e-cigarette brands, expand their market share to a broader field, and strengthen the market adhesion and survival ability of e-cigarette service providers themselves. Providing a wider range of brand choices for stores can enhance one’s competitive advantage and also increase the brand exposure of service providers.
4. Establish a self controllable or controllable e-cigarette store community within the service area of the service provider, and enhance the influence of the service provider on the terminal. At the same time, establish close contact with terminal stores, understand consumer needs, provide personalized services, and continuously improve their market share and competitiveness.
5. Electronic cigarette service providers can actively participate in collaboration and cooperation in the electronic cigarette industry, strengthen industry self-discipline and regulatory construction, and promote the healthy development of the industry. For example, industry associations and organizations can be established to regularly hold industry summits and seminars, jointly discuss industry development and management issues, and enhance the overall image and user recognition of service providers in the e-cigarette industry.
In the process of development, electronic cigarette service providers should also pay attention to compliance and responsibility, strictly abide by relevant laws, regulations and policy provisions, protect user rights and health and safety, and establish a good image and reputation of the enterprise.
In short, with the development of the electronic cigarette industry and the increase in market demand, the emergence of electronic cigarette service providers is an inevitable trend, aimed at helping electronic cigarette enterprises and consumers better manage and use electronic cigarette products, and providing more innovation and change for the electronic cigarette industry. At the same time, electronic cigarette service providers must focus on service quality and professionalism, innovate marketing strategies, and enhance their market stickiness and competitiveness in order to survive and develop in the fierce market competition. At the same time, e-cigarette service providers should also strengthen industry self-discipline and regulatory construction, pay attention to compliance and responsibility, and ensure their healthy development in the e-cigarette market.
Post time: Dec-10-2023