Amid U.S. vaping crackdown, Juul enters China
U.S. e-cigarettes maker Juul Labs Inc, which faces a widening crackdown on vaping at home, has entered China, with online storefronts on e-commerce sites owned by Alibaba Group (BABA.N) and JD.com (JD.O).
Reuters / SHAGHAI
U.S. e-cigarettes maker Juul Labs Inc, which faces a widening crackdown on vaping at home, has entered China, with online storefronts on e-commerce sites owned by Alibaba Group (BABA.N) and JD.com (JD.O) to tap the world’s largest market of smokers.
Juul, in which tobacco giant Altria Group (MO.N)owns a 35% stake, has been launching its products in internationalmarkets such as South Korea, Indonesia and Philippines. It recentlyraised over $750 million in an expanded funding round.
The U.S. government announced plans on Wednesday to remove allflavored e-cigarettes from store shelves, as officials warned thatsweet flavors had drawn millions of children into nicotine addiction.
The move comes as U.S. health officials are investigating ahandful of deaths and potentially hundreds of lung illnesses tied tovaping.
A notice published on Juul’s official virtual store on Tmall, anAlibaba e-commerce site, said it had opened on Sept. 9. Juul also hada similar store on JD.com, another major Chinese online retailer.
On Tmall, a Juul device with two flavor pods sells for 299 yuan(about $40). Flavors include mint, mango and strawberry.
Juul, Tmall and JD.com did not immediately respond to requests forcomment on Thursday.
China, which is the world’s largest single market for tobaccoconsumption with over 300 million smokers, represents a market withboth opportunity and risk for the company.
It is already home to dozens of Chinese competitors with namessuch as Relx, Yooz, and SNOW+ that have taken tens of millions ofdollars in venture capital funding from high-profile investors. LikeJuul, the competitors have adopted the concept of producing discretedevices that vaporize potent nicotine salts.
China’s government has perennially launched anti-smokingcampaigns in an effort to improve public health. Earlier this year itreleased a draft document suggesting that China’s laws regulatinge-cigarettes will eventually largely resemble those in Europe.
China’s tobacco industry, meanwhile, is tightly controlled bythe government-run monopoly China Tobacco, which maintains completeoversight on the sale, production and distribution of tobaccoproducts. Beijing relies on tobacco sales for a sizeable percentageof China’s overall tax revenue.