On the evening of February 29th, the Philippine Bureau of Customs Intelligence and Investigation Services seized a shipment of e-cigarette products valued at 4 billion pesos (approximately 510 million RMB, 70 billion USD) that were not registered in the Philippines and lacked the necessary authorization certificates. The confiscated FLAVA vape products are believed to have originated from the Philippines. (Read more: Breaking: Philippines Authorities Seize $70 Million's Flava Products)
Against this backdrop, 2FIRSTS had discussions with several individuals who are familiar with the e-cigarette market in the Philippines to understand the current situation of the market.
FLAVA is the leading distribution brand in the Philippines. It is understood that the Philippines has three major distribution companies, namely FLAVA, DENKAT, and SHIFT. Any brand looking to enter the Philippine market through these channels needs to establish a co-branding partnership with them. For example, the e-cigarette brand OXBAR (from OXVA) sold in the Philippines market carries the FLAVA brand logo on its product packaging and promotional materials.
According to sources, the recent seizure of goods by FLAVA has had a significant impact on the Chinese companies they were working with. FLAVA did not fully pay for the goods they were purchasing, with some orders only paying 30% to 50%, and even as low as 20%.
According to sources familiar with the e-cigarette market in the Philippines, Romio (from Shenzhen Maoanda Technology Co., Ltd. according to QCC) and OXVA (from Shenzhen Future Tech CO., Limited according to QCC), which have the closest cooperation with FLAVA, are considered the two Chinese brands most affected by this event. Among the products released on FLAVA's official social media platforms, Romio and OXBAR, a brand under OXVA, are the two brands with the highest frequency of appearance.
Judging from FLAVA's social media account, the brands that are also associated with them include GEEK BAR, FLONQ, and NIMMBOX.
Sources revealed that the e-cigarette market in the Philippines is currently in a state of extreme chaos. Some brands planning to enter the market are feeling uneasy, as they are facing difficulties in collecting payments from distributors, who are refusing their requests.
Furthermore, with FLAVA experiencing heavy losses, the e-cigarette market in the Philippines is currently undergoing a period of restructuring. Distributor SHIFT is seizing this opportunity to aggressively expand its channel business and has launched a promotion offering a free motorcycle with the purchase of an e-cigarette. As a result, many industry insiders speculate that after FLAVA's decline, SHIFT could become the "new king." According to insiders, SHIFT was founded by Filipino real estate and casino businessmen, with strong backing.
2FIRSTS will continue to monitor the dynamics of the e-cigarette market in the Philippines and will provide updates on the 2FIRSTS mobile app and www.2firsts.com in a timely manner. Stay tuned for more information.
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