China's Innovation in Non-Tobacco HNB Market

Jun.23.2022
China's Innovation in Non-Tobacco HNB Market
Chinese e-cigarette companies introduce innovative no tobacco solid vapor products, challenging the dominance of traditional tobacco brands.

In 2014, the world's largest tobacco company, Philip Morris International, launched its innovative product, "IQOS" in Nagoya, Japan and Milan, Italy. The product uses a heat-not-burn (HNB) system to produce an aerosol without combustion, which Philip Morris claims reduces the risks and harms associated with tobacco combustion. IQOS quickly gained popularity in the European and American markets.

 

In 2016, two tobacco giants launched their own HNB brands: British American Tobacco's "GLO" and Japan Tobacco's "PLOOM". In 2017, China Tobacco introduced their first HNB cigarette, "Kuanzhai Bullet Head," in the South Korean market for the first time. Meanwhile, IQOS has provided significant data showing its popularity in major cities in Japan and South Korea. The product's market share in the new tobacco market is around 80% in Greece and over 50% in countries such as Russia, Serbia, and Portugal.

 

Although other leading tobacco companies invested heavily in researching similar products, FiMo has completely dominated this category in terms of market performance ever since. FiMo quickly filed for patents worldwide.

 

Chinese e-cigarette companies have now introduced a new method that partially overcomes the technological barrier in the heated not burned (HNB) market competition with "Herbal HNB." The core principle involves using HNB capsule technology without tobacco.

 

During the innovation and research process of HNB, some e-cigarette companies are considering stepping away from the technology path of Philip Morris International. Unlike PMI's tobacco-based products, Chinese companies are developing products that primarily consist of plant fibers containing nicotine.

 

Innovation, from product to regulation.

 

In October 2018, a new type of e-cigarette called "solid-state e-cigarettes" made its debut at the E-Cyke exhibition in Shenzhen. This privately owned innovation, outside of China's tobacco industry, caught people's attention by combining the trend of heat-not-burn (HNB) with avoiding tobacco control regulations. The media dubbed it as one of this year's "innovative electronic cigarette technologies" at the tradeshow.

 

In 2021, the State Council revised the "Regulations on the Implementation of the Tobacco Monopoly Law" and added a new provision: "New tobacco products such as electronic cigarettes shall be subject to the relevant provisions of this regulation on cigarettes." The review was issued for public comment on March 22 and officially implemented on November 10.

 

According to the specifications set by HNB and the definition of "tobacco products" in China's Tobacco Monopoly Law, HNB is not classified as a "tobacco product". Therefore, it is not considered a cigarette, nor does it comply with the same regulations as "heated tobacco". The new national standard for electronic cigarettes defines it as an e-cigarette, with the "particles" in its smoke cartridges defined as "solid vapor materials".

 

In recent years, China's domestic tobacco industry has made significant progress in the research and development of HNB tobacco products. The total number of patent applications has far exceeded those of foreign tobacco companies and other applicants. Yunnan Tobacco and Hubei Tobacco stand out with the highest number of patents.

 

What will happen now?

 

China's smokeless HNB products have already secured patents in international markets including Japan and Europe. The product's advantages of small size, lightweight, and simplified production processes have enabled it to penetrate the market actively and dominate amidst large-scale manufacturing and strong financial support from international tobacco conglomerates engaged in price wars for marketing activities. Consumers stand to benefit greatly from this competition.

 

Before publishing this article, a Chinese private enterprise engaged in the "solid electronic cigarette" industry is still waiting for the production license from the State Tobacco Monopoly Administration and a technical review of their products.

 

The China National Tobacco Corporation has released a draft of the "Electronic Cigarette Management Measures," which apply to their defined "solid-state vapor materials" and "liquid-state vapor materials." The measures were announced on March 11th, 2022 and will be enforced starting May 1st, 2022, with a transition period ending on October 1st, 2022.

 

Source: VAPINGTODAY.

 


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.

RLX Technology Dropped From FTSE All-World as International Business Reaches 68.5% of Q2 Revenue
RLX Technology Dropped From FTSE All-World as International Business Reaches 68.5% of Q2 Revenue
RLX Technology (NYSE: RLX) has been removed from the FTSE All-World Index, effective September 21. FTSE Russell records show RLX was already part of its global equity index universe by 2022, when its American depositary receipts were classified as China Large Cap securities. Trading volume rose to about 44.77 million shares on September 18, roughly 23 times the previous session's volume. RLX reported RMB1.0105 billion in second-quarter revenue, up 14.8% year over year, with international operations contributing 68.5%. The company also acquired a 51% stake in one of Western Europe's largest distributors of next-generation smoke-free and FMCG products in July.
Sep.22
NAS 2026 | Former FDA Tobacco Chief Mitch Zeller Calls for Shift From “End Game” to “End State”
NAS 2026 | Former FDA Tobacco Chief Mitch Zeller Calls for Shift From “End Game” to “End State”
At the 2026 New Approaches Summit in New York, former FDA Center for Tobacco Products Director Mitch Zeller called for the tobacco harm reduction debate to shift from the traditional “end game” toward defining a desired “end state.” He also highlighted unresolved concerns around dual use, argued that biomarkers of exposure may be more meaningful than cigarettes-per-day in assessing risk reduction, and said nicotine misperceptions remain a major barrier to public health progress.
Sep.25
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
IKE Tech Launches IKE 2.0 Compliance Platform for Nicotine Products
IKE Tech Launches IKE 2.0 Compliance Platform for Nicotine Products
IKE Tech launched IKE 2.0 on September 28, initially targeting nicotine products with a platform that combines user identity verification, product authentication, configurable policy controls and data analytics. Products can be authenticated through direct device integration or NFC smart tags. IKE Tech was formed with participation from Ispire's Aspire North America, Berify and Chemular, with Ispire currently holding a 40% interest. Its age-verification component PMTA was accepted by the FDA in 2025 and remains under review. The company did not disclose customer names, commercial deployment volumes, pricing or revenue tied to IKE 2.0.
News
Sep.29 by 2Firsts Perspectives
FRE and ALP Push Modern Oral to 48% of Q2 Sales as Turning Point Brands Changes CEO and Lowers Profit-Guidance Ceiling
FRE and ALP Push Modern Oral to 48% of Q2 Sales as Turning Point Brands Changes CEO and Lowers Profit-Guidance Ceiling
Turning Point Brands said Executive Chairman David E. Glazek will become CEO on October 1, replacing Graham Purdy, who is stepping down for personal reasons. The company narrowed its 2026 adjusted EBITDA outlook to $70 million-$80 million from $70 million-$90 million while maintaining Modern Oral gross sales guidance of $330 million-$350 million and net sales guidance of $260 million-$270 million. In the second quarter, Modern Oral net sales rose 128% to $68.4 million and accounted for 48% of company-wide net sales. Adjusted EBITDA fell 50% year over year. TPB shares closed about 10% lower on September 21.
Market
Sep.22 by 2Firsts Perspectives
South Korea Constitutional Court Upholds Volume-Based E-Liquid Tax, With Challenged Rates at KRW 370 and KRW 628 per Milliliter
South Korea Constitutional Court Upholds Volume-Based E-Liquid Tax, With Challenged Rates at KRW 370 and KRW 628 per Milliliter
South Korea's Constitutional Court has upheld fixed taxes on nicotine-containing e-cigarette liquids based on solution volume, ruling that challenged provisions imposing KRW 370 per milliliter in individual consumption tax and KRW 628 per milliliter in tobacco consumption tax do not violate the Constitution. The cases stemmed from historical disputes involving importers that reported nicotine as being extracted from tobacco stems rather than leaves. South Korea has since broadened its tobacco definition to include synthetic nicotine, while current tax laws provide reduced rates for certain products not derived from tobacco.
Sep.18