On May 7, at The Hall of Vape e-cigarette exhibition in Stuttgart, Germany, 2FIRSTS conducted an exclusive interview with Xiao Ling, the founder of e-cigarette brand Puffmi.
Throughout the interview, the most frequently mentioned terms were "compliance" and "strict". As the second-largest market in Europe after the United Kingdom, local e-cigarette manufacturers face diverse challenges that require adaptation through exploration.
Strict Regulation and Supervision
In June 2022, Puffmi's sales team began familiarizing themselves with the German market. The first challenge they encountered was the TPD (Tobacco Products Directive), which had a lengthy approval process. This resulted in Puffmi's products only being officially sold in the German market at the beginning of this year. Xiao Ling told 2FIRSTS that his first impression of the market was strict.
Germany's government is increasingly strict about e-cigarette regulations, focusing on e-cigarettes, e-liquid product tax labels, and child protection. 2FIRSTS' observations at the exhibition confirm this. German customs enforcement officers implemented law enforcement during the exhibition, inspecting the tax labels and compliance of sample products at various booths, and removing non-compliant exhibitors.
Xiao Ling believes that the German government departments are swift in implementing policies, and brands wishing to enter the German market must prioritize compliance as it is a market with a "high entry barrier" . For instance, all Puffmi's marketing activities adhere to German policies and laws and conduct legal and compliant marketing activities. Regarding his most profound impression, Xiao Ling emphasized tax supervision. "In terms of taxation, supervision is very strict."
In February 2023, Germany officially began taxing e-cigarette e-liquids. The tax rate is 0.16 euros per milliliter, which is expected to increase to 0.20 euros in 2024, 0.26 euros in 2025, and 0.32 euros in 2026. This could lead to a nearly 40% increase in the retail price of e-cigarettes. Germany is among the few European countries that tax e-cigarettes, reflecting its approach to e-cigarette tax supervision.
Differences between the UK and Germany
Puffmi has a presence in both the German and British markets, and Xiao Ling mentioned the similarities and differences between the two markets. "The similarity is that both markets are now moving towards compliance." However, in the UK market, domestic e-cigarette manufacturers entered earlier, making the competition and market dynamics in the UK more intense than in Germany. Xiao Ling believes that, in all European countries (excluding Russia), the UK and Germany are the two most important e-cigarette markets.
Low Demand for Zero-Nicotine Products
According to 2FIRSTS' research on the European market white list, more manufacturers are entering the zero-nicotine e-cigarette market amid stricter regulations. Xiao Ling believes the overall demand for "zero-nic" products is not significant at present. New technologies involved in these products require a certain time frame, and manufacturers need to prepare for early collaboration.
Environmental Protection Issues
Disposable e-cigarettes are often criticized in the US and European markets for being environmentally unfriendly. Xiao Ling believes that the industry needs to address environmental issues while ensuring profitability. Environmental efforts should focus on two dimensions: improving e-cigarette manufacturing materials by choosing materials that are environmentally friendly and easily processed, and introducing a "recycling program." Xiao Ling said, "We will develop a recycling plan, which is a commitment to the social environment."
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