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.

Ireland Raises Nicotine Product Taxes Again as Cigarettes Gain €1 and Vape Duty Is Set to Jump 40%
Ireland Raises Nicotine Product Taxes Again as Cigarettes Gain €1 and Vape Duty Is Set to Jump 40%
Ireland has increased tobacco excise under Budget 2027 and announced a further rise in its E-liquid Products Tax. From Oct. 7, the tax burden on a pack of 20 cigarettes in the most popular price category increased by €1, with pro-rata increases on other tobacco products. The government plans to raise EPT from €0.50 to €0.70 per millilitre from Jan. 1, 2027, a 40% increase applying to both nicotine-containing and nicotine-free e-liquids. The tobacco duty increase is expected to raise about €63.1 million in a full year.
Regulations
Oct.09
Product | JTI Introduces Fully Dissolvable PERLZ Nicotine Pearls in UK, Expands Range From 30-Pearl Dispensers to 10-Pearl Sachets
Product | JTI Introduces Fully Dissolvable PERLZ Nicotine Pearls in UK, Expands Range From 30-Pearl Dispensers to 10-Pearl Sachets
Japan Tobacco International (JTI) has introduced PERLZ nicotine pearls in the UK, expanding its oral nicotine portfolio beyond conventional nicotine pouches. The fully dissolvable, multi-layer pearls are placed under the tongue and come in Mint and Berry flavors at concentrations of 1mg/g and 2mg/g, equivalent to approximately 0.3mg and 0.5mg of nicotine per pearl. UK retailer Haypp published four 30-pearl dispenser listings on July 31, 2026, followed by three 10-pearl sachet products on August 17. The dispensers retail for £6.50, while the sachets cost £2.50.
product
Oct.12
Philippines Mandates Safety Certification for Nicotine Pouches, Gives Industry 12 Months to Comply
Philippines Mandates Safety Certification for Nicotine Pouches, Gives Industry 12 Months to Comply
The Philippines Department of Trade and Industry has placed nicotine pouches under mandatory product certification through Department Administrative Order No. 26-07, Series of 2026. Nicotine pouches must obtain a Philippine Standard, or PS, license before they can be manufactured, imported, packed, distributed or sold in the country. The regime requires testing for nicotine content, pH and water activity, while packaging must disclose nicotine strength, ingredients, allergens, batch information, the PS certification mark and prescribed health warnings. Existing market participants have a 12-month transition period to comply.
Regulations
Oct.12
STIIIZY Redesign Fails to Escape PAX Labs Patent Import Ban as Section 337 Case Also Involves China ALD
STIIIZY Redesign Fails to Escape PAX Labs Patent Import Ban as Section 337 Case Also Involves China ALD
U.S. Customs and Border Protection ruled that STIIIZY had not shown that the redesigned cannabis-vape products covered by its latest request fall outside an ITC limited exclusion order tied to PAX Labs patents. CBP accepted some of STIIIZY’s claim-construction and non-infringement arguments, but the company did not address two additional claims in the same patent. Earlier STIIIZY redesigned cartridges and certain associated components imported with them had received separate CBP clearance.
Sep.16
EU Tobacco Tax Reform Stalls as Malta Withholds Support Despite Backing From 26 States
EU Tobacco Tax Reform Stalls as Malta Withholds Support Despite Backing From 26 States
EU finance ministers failed to reach agreement on tobacco excise reform at the November 9, 2026 Economic and Financial Affairs Council (ECOFIN) meeting in Brussels. The Irish Council presidency's compromise secured support from 26 of the EU's 27 member states, but Malta withheld consent, preventing the Council from reaching a general approach requiring unanimity. The reform would raise minimum taxes on conventional tobacco and bring e-cigarette liquids, heated tobacco and nicotine pouches into a common EU minimum excise framework. Finland and Estonia accepted further concessions during the meeting, while the presidency proposed separating the inclusion of nicotine pouches in the framework from setting their precise minimum tax rates. Another compromise would allow ten qualifying member states until 2036 to meet certain tobacco excise requirements. Ireland intends to continue negotiations in December.
Regulations
Nov.11
FDA Revises Import Alert 98-07 Rules, Bringing May Enforcement Priorities Into Unauthorized ENDS Detentions
FDA Revises Import Alert 98-07 Rules, Bringing May Enforcement Priorities Into Unauthorized ENDS Detentions
The U.S. Food and Drug Administration has revised the rules under Import Alert 98-07 to incorporate its May 2026 enforcement-priority policy for certain electronic nicotine delivery systems marketed without premarket authorization. The alert continues to allow detention without physical examination, or DWPE, for ENDS lacking required marketing authorization, while directing field divisions to apply the May risk-based framework. When necessary, detention or refusal decisions must also undergo review by the FDA's Center for Tobacco Products. Products including PACHA and Vuse Pro have already emerged as industry examples of the May policy, although enforcement discretion does not constitute FDA marketing authorization.
News
Sep.28 by 2Firsts Perspectives