On January 3rd, 2FIRSTS published an in-depth article titled "Rethinking Smoore: Mistakes, crisis, and a way forward". The article immediately sparked widespread discussion within the e-cigarette industry.
2FIRSTS has conducted a comprehensive summary of various perspectives on the Smoore issue thus far. The aim is to provide readers with a more comprehensive viewpoint for further contemplation and discussion.
Below are the various perspectives:
@migao:
The missed opportunity in the disposable business and the late push with two major clients are closely related. Smoore mainly operates as an OEM business, meaning that no matter how great its technology is, it is in vain if customers do not utilize it. This inherent passivity in Smoore's role explains why it fell behind in the disposable market. Had BAT positioned themselves earlier in the disposable market, Smoore would have naturally kept up. After all, the technology required for disposable products is relatively low, and Smoore already possessed accumulated enough to meet the product demands.
Speculating further, it can be said that the tobacco industry in the UK and the US is not as quick to embrace disposables, not because they are unaware of the trend but rather because they are cautious about entering into cutthroat competition. Up until 2022, they may have held on to the hope that disposables would not gain popularity, considering the significant profit gap compared to pod-based systems. However, they eventually realized that they couldn't ignore the trend and had to personally engage in the market. Losing market share is more terrifying than sacrificing profits.
Therefore, based on the aforementioned points, it is not surprising that Smoore's lagging behind in the market carries a certain degree of expected sorrow.
The game of major client and the demand for optimizing supply chain costs for major clients have been clearly reflected in the past year in British American Tobacco and RELX. This year, British American Tobacco has placed 50% or even more of its disposable business with FirstUnion. Although they have introduced multiple new products this year, the main existing models and a new flagship model are now dominated by FirstUnion. This directly led to Smoore's failure to achieve its target of 4 billion in disposable business at the beginning of the year. If it had not been transferred to FirstUnion, Smoore's disposable business this year would have been around 50-60, but I estimate it will be around 35. RELX also experienced a similar situation, where the domestic market shifted from being solely supplied by Smoore to being shared by Smoore, FirstUnion, and ALD. As for the overseas market, I do not have the data, but I conservatively estimate that Smoore now accounts for less than 40%.
@Keepupthegoodwork:
The entire article fails to mention Smoore's compliance issues, such as PMTA, which is the fundamental reason why it has not entered the US market. In the European market, disposable companies have violated TPD rules by entering with a large number of products, which is also a significant reason why Smoore has not collaborated with these companies. Therefore, Smoore's current situation is largely due to various policy reasons, not its research and development efforts. Additionally, it should be noted that half of Smoore's research and development investment is allocated to HNB products, not solely disposable products, which the articles have failed to mention.
@999Roses:
In my impression, this seems to be the most detailed article analyzing Smoore. After reading it several times, I feel both disappointed by the setback of a giant and reassured by glimpses of hope. I am someone who believes in the power of time and believes in the order of the world. The road for e-cigarettes is still very long. The market will eventually move away from prioritizing growth data. At that time, the ultimate winner will be the one with the safest product and sufficient trust. There is a saying in the business world, "Don't compare who has a more glamorous life, but who can live longer." Yes, I believe Smoore is the company that will always be at the table.
Anonymous user:
Smoore has missed out on the best period of overseas development, which is both a strategic misjudgment and a result of their difficulty in ignoring external regulations. They are a company with long-term plans and have not made any fundamental mistakes in major decisions. However, China and overseas markets are two different playing fields, and therefore require two different approaches. Nevertheless, Smoore has once flourished, but it now appears increasingly quiet in the face of external capital speculation.
Anonymous User:
Smoore's investment is long-term and represents recognition of the regulatory trends surrounding e-cigarette compliance and the regulation of similar tobacco products. Due to requirements for compliance as a public company, Smoore cannot dramatically increase production orders. Additionally, as the tobacco industry is dominated by a few key players, Smoore must maintain strong relationships with these market leaders. In the short term, the e-cigarette market is not yet in a highly regulated era, so Smoore's second growth phase will not occur just yet. As a technology-driven company, Smoore must focus on iterating and innovating its vaporization technology, controlling factory costs, and betting on its new vaporization technology consumer products becoming popular. However, it is still too early to say whether these strategies will be successful.
It is even uncertain whether Smoore will remain standing until the day the mist clears.
An User on Xueqiu:
The analysis is sound, but it is unclear whether the author intentionally or unintentionally overlooked an important point - the importance of compliance and the impact of strong regulation on competition. RELX and Smoore's success was achieved in an environment without stringent regulation, which proved their capabilities as a manufacturer and brand. However, in the later years, the industry faced strong regulation, which noticeably affected major players like RELX and Smoore. On the other hand, new small and medium-sized manufacturers could take advantage of regulatory loopholes for penetration and development of new products, without facing the same restrictions. As a result, RELX and Smoore found themselves constrained within a very limited space, making the competition unequal. The decline in their market share, apart from not keeping up with e-cigarette consumer trends, can largely be attributed to this unfair competition. However, running fast doesn't guarantee running far. From a regulatory standpoint, e-cigarettes are burdened with "original sin." Therefore, compliance with regulations, legality, and ESG (Environmental, Social, and Governance) initiatives are the basic guarantees for companies to persist in the long run. RELX and Smoore possess much stronger capabilities in these aspects compared to other new players, although this often goes unnoticed.
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