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On January 11th, the staff at Moscow's 2FIRSTS media center discovered that two major electronic cigarette brands, Elf Bar and HQD, had simultaneously reduced their prices by 20%-30% on Russian online stores (click to read more). In response, 2FIRSTS interviewed the official online store operators for Elf Bar and HQD in Russia, while also conducting an investigation of several electronic cigarette retailers in Moscow to gather more information on the situation.
Is it just a New Year's promotion? Online discounts, but regular sales in physical stores?
In an interview, the operators of the HQD online store stated that the company's recent price reductions on all its products were simply a New Year discount and will be ending at some point in the near future. However, the operators did not disclose a specific end date for the discount. Meanwhile, the Elf Bar online store declined to comment on the reason for their lowered prices.
It is reported that every year during the New Year season, various types of products in Russia will have different levels of discount promotions, which will end in January. However, it is not common for over 200 products of the Elf Bar brand to have a significant discount promotion at the same time.
On the left: A tobacco retail store in Russia/On the right: A leading electronic cigarette chain in Russia | Image source: 2FIRSTS
Left image: Russian retail store for electronic cigarettes. Right image: Russian leading chain store for electronic cigarettes. Image source: 2FIRSTS.
An investigation has found that 7 to 8 e-cigarette brands have seen price reductions of 5% to 30% at their online retail locations. This includes not only the two major brands, but also JUUL, Infalve, and LostMary. Vardex, a major online retail platform in Russia, has seen a trend of decreasing prices in e-cigarette brands, with disposable e-cigarettes being the majority of the affected products.
In addition, 2FIRSTS found in their offline retail store survey that major physical stores of electronic cigarette brands currently do not have any promotions for price reductions, and the prices of similar brand products in physical stores are significantly higher than the discounted prices on online platforms.
Is the upcoming deadline for the Honest Label policy on April 1st the real reason behind the clearance sale?
After consulting with a source familiar with HQD's distribution channels, it was revealed that the current markdowns on online platforms are to quickly sell off current inventory in preparation for the release of new products. Upon the new product launch, prices are expected to increase once again.
Starting from January 1, 2023, Russian regulations require a dual tax on disposable e-cigarettes, meaning that each device will be subject to both a cigarette and oil tax. According to the implementation deadline for honest labeling in Russia, e-cigarette retail products in circulation must be registered with honest labeling by March and product information must be uploaded to the labeling system by April. Furthermore, all new e-cigarette products delivered to Russia must have a transparent honest labeling code.
The price of JUUL products has been reduced by approximately 30%, according to sources from the official VERDEX website.
Retail situation in Moscow (no discount information available)| Image source: 2FIRSTS.
Behind the simultaneous price reductions of multiple brands of electronic cigarettes in the Russian market, there are questions about the true reason. 2FIRSTS will continue to follow and report on this issue, so stay tuned for further updates.
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