Tue, Dec 03, 2019 - Page 4 News List

Vaping concerns hit Chinese manufacturing

BANNED:A ‘de facto’ ban on e-cigarettes in China and 39 vaping deaths in the US have affected companies in Shenzhen, where 90 percent of vaping devices are made

The Guardian, SHENZHEN, China

“Even with the China regulation, it will eventually be the biggest market, and there are other markets growing, in Southeast Asia, the Middle East,” he added.

The US is currently the biggest market, but also the wild card, those in China’s industry believe.

Manufacturers are waiting to see if the US bans flavored e-cigarettes and what the Food and Drug Administration’s (FDA) policy would be on approving tobacco products (known as a pre-market tobacco product application).

While the FDA says the cost of the review process, which is to be determined in May next year, would top out at about US$460,000, those in the industry in Shenzhen expect it to be much higher.

One manufacturer, who did not want to be identified, says it would likely cost his business US$10 million in set-up costs and business registration, and then about US$5 million for each individual barcoded item.

Qasim Shah, the cofounder of STIG International, has been building a multimillion-dollar vaping business in Shenzhen over the past decade. Originally from Woking, in London’s commuter belt, he ditched his furniture import business and now has a company that makes 4.5 million to 6 million devices a month, mostly for the US, Europe and China.

He says the pushback in China has similarities to what is happening in the US, but may take longer to play out.

“I wasn’t surprised at all. This has been on the table for maybe three or four months. People in the industry knew there was something coming. I didn’t expect an online ban, but the worst scenario would have been to ban e-cigarette sales outright,” Shah said.

Like most other similar-sized brands here, he is waiting to see how things play out.

“There’s no regulatory clarity,” Shah said of both the US and China policies.

“Everyone here knows the government is quite tough and what they say you have to abide by. You get on with it and there are other avenues for the market,” he added.

Bruce Du works as a distributor for about 10 brands of e-cigarettes. He says the mood swings in the industry are a result of Chinese and US policy, trade frictions between the two countries and the influence of China’s tobacco industry.

“I’ve thought of getting out of the business because of all the problems [on the US side],” he said.

“In my opinion, China Tobacco [the state-run monopoly that manages sales and taxes on cigarettes] is trying to push our industry down because if we grow at a faster pace, the market and profit for tobacco will go down,” Du said.

However, Ao Weinuo, head of the Shenzhen branch of the China Electronic Cigarette Chamber of Commerce, is upbeat.

“The electronic cigarette industry has raised great concern in the world, especially in the US and China. There’s a lot of negative press, but we think [e-cigarette use] is a trend that can’t be stopped. As long as we solve the problems of taxation, product quality and safety and measures to protect minors, the industry will have a bright future,” Ao said.

This story has been viewed 1247 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top