Challenges Faced by E-cigarette Retailers in China

Aug.08.2022
Electronic cigarette stores struggle with unclear policies and low demand, leading to closures and inventory problems.

Recently, it has been observed by reporters that despite the numerous tobacco retailers obtaining licenses and various brands being granted production permits, the enthusiasm of electronic cigarette retailers to pursue licensing and maintain their businesses remains consistently low.


It has been discovered that over 50,000 electronic cigarette retail licenses have been approved nationwide, but only just over 20,000 have actually been issued. This accounts for less than 40% of the total approved. Surprisingly, 20% of the stores that have been approved have chosen to forfeit their license.


Closed Shop in Pain over Unclear Policy Direction


A journalist discovered in a bustling commercial street in Beijing that once had four or five different branded electronic cigarette stores established one after the other, only one store still remains operational as a conglomerate. However, neighboring shops have either shut down or posted rental notices on their storefronts.


Zhao Cheng is the owner of this convenience store. During an interview, the reporter learned that he has already obtained a retail license. However, due to a lack of confidence in the future, he is considering selling the store before the lease expires.


The confusion over policy direction is the main reason why Zhao Cheng is considering closing his store. "There is a lot of policy uncertainty during the transition period, and the brand has no countermeasures. The staff responsible for the tobacco bureau also cannot provide clear answers," said Zhao Cheng.


Zhao Cheng, one of the earliest electronic cigarette shop owners, stated that he quit his stable job and invested all his savings into this business when he saw the potential of the industry. At its peak, he managed three shops. However, he now only has one left and due to the impact of the pandemic, even if he were to switch professions, the stability of his business would still be uncertain. He is unsure of what the future holds.


Supply Shortage: National Standard New Products Delayed Indefinitely.


Even after obtaining a permit, Zhao Cheng, who is considering closing his store, is not an exception. Cui Zhiqiang, an e-cigarette shop owner from Chongqing, is also facing a similar dilemma.


I have received a warning from relevant personnel that fruit-flavored electronic cigarettes will be banned from October onwards. In order to successfully apply for a tobacco retail license, I have purchased a large number of electronic cigarette products of various brands, in accordance with the requirement that electronic cigarette stores cannot operate exclusively. However, according to Mr. Cui Zhiqiang, these brands are not popular and have resulted in a large amount of unsold inventory, causing significant financial pressure on the business.


Well-selling brands such as YUEKE and YUZI have been sold out for some time now, while other products that were procured as per requirements lack recognition and fail to attract consumers. The situation I am currently facing is that the products with market demand are out of stock, and the products available in stock do not have market demand," sighed Cui Zhiqiang.


According to sources, tobacco officials in many provinces and cities have been warning retail store owners to quickly use up their stock of fruit-flavored e-cigarettes before the new regulations take effect on October 1. If they continue to sell these products after the deadline, they will face varying degrees of administrative penalties. However, new national standard products from various brands have yet to hit the market, leaving store owners struggling to make ends meet after they exhaust their stock of fruit-flavored products. The cost of rent and other operating expenses will make it difficult for them to stay afloat.


The implementation of new regulations for electronic cigarettes has caused confusion, with a lack of clear guidelines during policy execution in various regions, insufficient existing inventory, and a delay in new product releases. This has become a major concern for electronic cigarette shop owners across the country.


According to industry media investigations, in July, 35% of store owners experienced a decline in sales, and 29% of them reported that continuing to operate their stores was only due to the sunk costs, reflecting a low level of confidence in the industry.


The application process is difficult and there is a high rental pressure.


Furthermore, many shop owners have encountered numerous difficulties when applying for licenses in various locations. The reporter also interviewed a former electronic cigarette shop owner in Zhangjiakou, Hebei Province. The shop owner stated that he applied for an electronic cigarette retail point two months ago. However, the location of his store was not among the existing points of the local Tobacco Bureau, which prevented him from obtaining a license smoothly.


I have called many times to ask, but the other party does not know how to solve this situation, they just keep repeating information from the state bureau's documents." The former store owner stated that they switched careers to cut their losses in a timely manner. "Even if I can get the license, I don't want to do it anymore in this situation.


In recent years, the explosive growth of the e-cigarette industry has led to dedicated e-cigarette retail stores becoming a new retail format. According to the "2021 E-cigarette Industry Blue Book," there are nearly 190,000 e-cigarette retail outlets in the domestic market, including 138,000 authorized stores and 47,000 dedicated stores. E-cigarette sales networks have penetrated into cities at all levels, with an average of 1,301 e-cigarette retail stores in each first-tier city and 33 in each fifth-tier city.


Under current regulations, the data mentioned above will undoubtedly experience a significant shrinkage. "In the long run, the legalization and regulation of e-cigarettes will promote the standardized development of the industry, but the issue of employment for retailers should not be underestimated," experts have stated. "During the implementation of regulations, the absence of service awareness and meticulous enforcement will cause pain for e-cigarette shop owners.


This article contains excerpts or reprints from third-party sources. Copyright belongs to the original media and author. If there is any infringement, please contact us for deletion. Any organization or individual wishing to reprint should contact the author and refrain from directly reprinting.



Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

Hunan China Tobacco Industry files heated tobacco device patent featuring adult-user identification through pressure sensing
Hunan China Tobacco Industry files heated tobacco device patent featuring adult-user identification through pressure sensing
China-based Hunan China Tobacco Industry Co., Ltd. and Shenzhen Baisha Technology Co., Ltd. have filed a patent application covering an adult-user identification mechanism for heated tobacco devices. The patent proposes using flexible pressure sensors installed in the device grip area to collect pressure distribution patterns generated when users hold the device. The system evaluates factors including effective contact area, grip shape and contact duration, and combines roller movement detection to determine whether unlocking conditions are met. The filing reflects exploration of device-level user recognition and smarter interaction technologies for heated tobacco products (HTPs).
Aug.05
Swedish-Founded Nicotine Pouch Retailer GotPouches Shifts to U.S.-Based Operations, Reaching Over 25 States
Swedish-Founded Nicotine Pouch Retailer GotPouches Shifts to U.S.-Based Operations, Reaching Over 25 States
Swedish-founded online nicotine pouch retailer GotPouches has completed the localization of its U.S. operations under UpNorth Retail LLC, with corporate operations in Franklin, Tennessee, domestic fulfillment from Nashville and U.S.-based customer support. The company says its catalog covers more than 20 nicotine pouch brands and it currently serves customers in more than 25 U.S. states.
Sep.18
China Tobacco Plans CNY 60 Billion Investment in ICBC, Agricultural Bank as Strategic Ties Extend Beyond Equity
China Tobacco Plans CNY 60 Billion Investment in ICBC, Agricultural Bank as Strategic Ties Extend Beyond Equity
China National Tobacco Corporation and several subsidiaries plan to invest a combined CNY 60 billion ($8.7 billion) in share placements by Industrial and Commercial Bank of China and Agricultural Bank of China as strategic investors. The agreements extend beyond equity investment to corporate governance, banking services and supply-chain finance. The filings also disclose 2025 data on China Tobacco’s tax and profit contributions and industry scale.
Sep.07
Product | BAT Japan Launches virto Bright Peach Click in Japan, Expanding glo Hilo’s Capsule-Based Flavor Portfolio
Product | BAT Japan Launches virto Bright Peach Click in Japan, Expanding glo Hilo’s Capsule-Based Flavor Portfolio
British American Tobacco Japan (BAT Japan) has introduced virto Bright Peach Click, a new heated tobacco stick designed for the glo Hilo system. The product expands the existing virto consumable lineup with a combination of tobacco, menthol and ripe peach flavors, featuring a capsule mechanism that releases additional fruit flavor when activated. The product launched in Japan on July 27, 2026, through glo official online channels, convenience stores and tobacco retailers.
Aug.03
JAMA Study: U.S. Vape Directories Fail to Sustainably Curb Unlisted Sales as Product Shifts May Redistribute Brand Share 2Firsts Recommended
JAMA Study: U.S. Vape Directories Fail to Sustainably Curb Unlisted Sales as Product Shifts May Redistribute Brand Share 2Firsts Recommended
A study by CDC Foundation researchers found no sustained decline in e-cigarette sales across Alabama, Oklahoma and Louisiana, the first three U.S. states to implement e-cigarette directory laws. Louisiana initially saw a significant sales decline, followed by a rebound and a persistent reduction in product availability. Sales also shifted from nontobacco-flavored disposables toward prefilled cartridges, with Vuse Alto driving much of the increase in menthol cartridges. By April 2025, unlisted products still accounted for more than half of e-cigarette nicotine sales in all three states.
Sep.18
Product | JNR Launches Crown Shisha 100K for International Wholesale, Pairing 58ml Capacity With Triple-Mesh DTL Design
Product | JNR Launches Crown Shisha 100K for International Wholesale, Pairing 58ml Capacity With Triple-Mesh DTL Design
JNR released the Crown Shisha 100K on August 14, 2026, positioning the ultra-high-capacity disposable around a direct-to-lung (DTL) e-shisha experience. The device combines a 58ml e-liquid capacity, triple 1.0Ω mesh coils and a 1,300mAh rechargeable battery, with JNR claiming up to 100,000 puffs. Adjustable airflow, battery and e-liquid status displays, a leather-style exterior and a shisha-inspired sound effect further differentiate the product. JNR is currently promoting the device through international wholesale and distribution channels, while a specific first retail market has not been disclosed.
Aug.31