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On June 4th, the Vapexpo electronic cigarette exhibition in Madrid, Spain entered its second day. The staff of 2FIRSTS London News Center continued to conduct interviews at the exhibition site.
Today, 2FIRSTS interviewed Roberto, the manager of Mevol's Spanish branch, which is an electronic cigarette brand owned by Shenzhen Miwo Technology Co., Ltd.
Roberto shared his insights on the tobacco market in Spain with 2FIRSTS, revealing the challenges the industry currently faces in the country.
International top brands have a first-mover advantage and attract a younger demographic of consumers.
According to Roberto, data shows that there are 16,000 tobacco shops across Spain, with approximately half (8,000) showing interest in selling electronic cigarettes. The shops that are not interested are often located in remote or traditional communities, catering mainly to older customers who prefer traditional cigarettes over e-cigarettes, hindering sales of the latter.
Therefore, shops willing to sell electronic cigarettes are often located in areas where many young people congregate, making them the main market for electronic cigarette consumption in Spain.
He pointed out that small and medium-sized e-cigarette brands face difficulties in promoting themselves in tobacco shops. Most tobacco shops interested in e-cigarettes tend to prioritize stocking the largest brands to reduce their inventory costs. Therefore, well-known brands such as ELFBAR and WAKA, backed by large corporations, are more likely to appear frequently in these stores.
The profit margin of electronic cigarettes can reach up to 240%, but the cost of opening a store is high.
Furthermore, Roberto emphasized that although every tobacco shop has the same sign, they are not actually chain stores. These shops are independently operated establishments under a government-issued monopoly license. Individuals can only own one tobacco shop, which is equivalent to every citizen in Spain being allowed to register and operate only one tobacco shop.
The boom in the Spanish market is set to begin in mid-2022, making the profit margin for e-cigarettes higher than that of traditional cigarettes.
The Spanish government has imposed strict limitations on the tobacco market, with a retail profit margin of only 8.5%. Meanwhile, e-cigarette purchasing prices range between 3.5 and 4 euros, but retail prices can reach up to 12 euros.
However, the high cost of opening a store cannot be ignored. Mr. Lin, a businessman interviewed by 2FIRSTS, stated that the cost of opening a tobacco store in some busy areas, such as central Madrid, can be very high and may require hundreds of thousands or even millions of euros.
The government has set a limit on the number of tobacco licenses that can be issued for each city or area during urban planning. For instance, in the city of Madrid, only 100 tobacco shops are allowed to operate. If someone wishes to open the 101st shop, they must pay the government a fee to obtain a license.
Could government regulation become uncertain and be added to the tobacco management system?
On June 3rd, Juan, the Spanish representative of Olé, a disposable e-cigarette brand, stated in an interview with 2FIRSTS that Spain's e-cigarette regulations will become increasingly strict, with e-cigarettes potentially being included in the tobacco regulatory system within the next two years.
We interviewed other exhibitors on this issue and Avant Smoke representative Zhu Jianxiang, who works for a tobacco import and export company, said that it's unlikely for electronic cigarettes to be included in the tobacco industry. Spain had previously proposed a similar bill, but it did not pass due to political changes.
On April 14th, Spain will introduce a royal decree aimed at regulating the manufacturing, display, and marketing of tobacco and related products. The decree includes provisions such as a clear classification of emerging tobacco and related products, the use of neutral packaging, traceability, and safety measures, and a ban on certain additives and ingredients that may be more attractive to consumers.
Currently, the decision is in the public consultation stage and still awaits the final decision from the government.
Small and medium-sized electronic cigarette brands in Spain are facing multiple challenges in the market, including difficulties in promotion, restrictions on city planning, and negative news related to being included in the tobacco industry.
Context:
On May 15th, 2FIRSTS and VAPEXPO SPAIN announced a partnership to work together as media partners to advance and promote the development and exchange of the global electronic cigarette industry.
Vapexpo Spain, the largest and most important vaporization industry exhibition in Spain, brought together vape manufacturers, suppliers, retailers, and industry experts from around the world. 2FIRSTS, as a global vaporization technology media and think tank, focuses on market and development hot topics in the global vaporization field, and is committed to promoting information exchange in the global e-cigarette industry. Through its media influence, it helps to promote the global development of the vaporization industry.
*This article is an original article of 2FIRSTS Technology Co., Ltd. The copyright and license rights belong to the company. Any entity or individual shall make link and credit 2FIRSTS when taking actions to copy, reprint or distribute the original article. The company retains the right to pursue its legal responsibility.
