E-cigarette market and regulatory landscape in China
China is responsible for more than 90% of the world’s e-cigarette production and there are over 4,000 companies in the country manufacturing e-cigarettes. Although this number is large, the majority of these companies export up to 90% of their products to other countries while keeping 10% for the domestic market.
We estimate online accounts for around 80% of the total market in China. The remaining offline market consists of sales through vape stores, which are declining in number, with a small percentage of sales through mainstream retail channels.
Currently, the only effective legal frameworks that apply to e-cigarette products are those on general manufacturing and consumer products, such as the Product Quality Law of the People’s Republic of China and the Law on Protection of Consumer Rights and Interests. Vaping products are not subject to any product-specific regulation.
The long-awaited Chinese national standard on product restrictions, testing methods, packaging, labelling, storage and transportation of e-cigarettes could get more attention from policymakers as the country moves on from dealing with the Covid-19 epidemic, but this is unlikely to happen in the first half of 2021.
A new draft amendment to the Chinese Tobacco Monopoly Law to regulate tobacco-alternative products, including e-cigarettes, as traditional tobacco threatens big changes to the local vapour market. If the bill is passed, e-cigarettes would be treated as tobacco monopoly commodities, requiring manufacture, import and sales licences from the State Tobacco Monopoly Administration (China Tobacco).