Russia Market Share Week" by 2FIRSTS

From January 6th to 10th, 2FIRSTS successfully hosted the "Russian Market Sharing Week" event. The online lectures and live broadcasts throughout the event aimed to provide e-cigarette companies with quick and accurate knowledge of the Russian market, tax policies, and honest labeling. This event served as an opportunity for brands and businesses to connect and establish a foothold in the Russian market, creating a favorable environment for e-cigarette brands to expand their reach and explore new opportunities.

During the sharing, Q&A, and communication sessions, the participants actively sought opportunities for collaboration and engaged in deeper exchanges. This led to the establishment of a cooperative bridge between 2FIRSTS and Chinese e-cigarette companies, creating a more effective channel for both parties to connect for project collaborations and increased communication and mutual support in the pursuit of win-win cooperation.

The "Russia Sharing Week" featured three online live events that attracted 500 professionals in the e-cigarette industry. The live broadcasts received over 50,000 likes.

During the livestream, Liang Jiasen, an expert on Russian electronic cigarette policies and market research for 2FIRSTS, as well as Xu Minghao, 2FIRSTS' Russian country manager, shared their professional knowledge on topics including Russian electronic cigarette taxation policies, market research, exhibitions, and honest labeling. What were the highlights of these three livestream events? Let's take a look back with our reporter for a recap.

Key point 1: Russia imposes double consumption tax on electronic cigarettes; profits for disposable and high-capacity e-cigarettes are higher.

According to Russian federal tax regulations, electronic cigarettes are subject to a double consumption tax. Both the liquid and the device itself are taxed, with an average cost of 180-64 rubles per device. Every milliliter of liquid is also subject to value added tax, along with an additional 18 ruble consumption tax. The total cost comes out to around 400 rubles (approximately 47 Chinese yuan).

However, replaceable cartridges are only subject to a single equipment tax, while pod taxes are calculated separately based on the nicotine content. Higher sales of pods lead to a higher rate of consumption tax, which in turn increases profits.

The future of consumption taxes on tobacco products in Russia, as shown in the accompanying graph from 2FIRSTS.

Click to read the full article: "In-Depth Analysis of Russia's E-Cigarette Taxation Policy with Detailed Information Included.

Highlight 2: Investigating the electronic cigarette market in Russia, where a popular brand has a counterfeit rate of 50%.

Due to the severe lack of transparency in market data in Russia, two individuals have conducted a sample survey by visiting almost 10% of the retail market in Russia over the past month.

Source: 2FIRSTS Retail E-Cigarette Products

Investigations have revealed that the prevalence of counterfeit goods in Russian retail stores is alarmingly high. Counterfeit rates for top-tier brands are as high as 50%, while rates for other brands range from 20% to 30%. Some stores deliberately stock both genuine and imitation products from well-known brands, selling them side-by-side in order to optimize profits.

Article views: The counterfeiting rate of a well-known electronic cigarette brand in the Russian market reaches 50%, along with the attached results of a market investigation in Russia.

Key Point Three: After the implementation of the label, the illegal market share in Russia is expected to decrease to 11.5% in 2022.

In 2019, Russia's "honest labeling" system became the government's largest tracking system. In recent years, the range of products subject to labeling requirements has rapidly increased and the federal government plans to further expand the scope of the system.

Source: 2FIRSTS. The Russian honesty label is displayed in the picture.

Tobacco products were among the first goods to be included in the system in Russia. Before the implementation of the labeling system, the illegal tobacco market was exponentially growing. However, after the implementation of the labeling system, the market has been decreasing year by year. By 2022, the illegal market share has decreased by a quarter, from 15.6% in 2019 to 11.5% in 2021.

Article views: Exclusive explanation | New opportunities for development after the implementation of Russia's honesty label

Highlight Four: Russia's Most Iconic Exhibition Worth Attending in 2023.

The Hookah Club Show will take place in Kazan, Russia on May 6-7, 2023. The exhibition will be divided into two sections, featuring electronic cigarettes and water pipes. The electronic cigarette section will cover approximately 16,000 square meters, while the water pipe section will cover around 10,000 square meters.

Hookah Club Show in Kazan showcased various exhibits. Image source: 2FIRSTS.

The organizer of Hookah Club Show is the chairman of the Russian Hookah Union. He founded Hookah Club Show and Vape Club Show and is also the founder of the Russian hookah chain club "Omar Khayyam". ASYA established Hookah Club Show in 2016, which is the well-known international exhibition for hookah in St. Petersburg, Russia. The professionalism of this exhibition exceeds that of most of the world-renowned tobacco shows.

Article Views: 2 FIRSTS exclusively recommends the limited-time pre-sale of the most iconic exhibition in Russia in 2023.