The barbaric e-cigarette industry is about to usher in the era of strong regulation globally.
Somke. Image credit: chris mai dl/Unsplash
Founded in 2018, Moti (魔笛) has been focusing on the overseas market before, and turned back to the domestic market at the beginning of this year. The main products in China are reloading e-cigarettes and one-time small cigarettes MOJO. In January 2019, it secured USD 10 million Pre-A round of financing from ZhenFund.
After this round of funding, it’s been estimated to achieve CNY 2 billion GMV in China and 500 million in overseas market. Currently, Moti has signed contracts with more than 70,000 offline stores covering 12 countries in Southeast Asia and the Middle East. The lastest valuation of Moti has hit CNY 1.3 billion.
The leading investor of this round Heyu Capital (和玉资本) is a private equity investment institution with a management scale of more than USD 1 billion. It has completed more than 80 investments in TMT and the medical industry.
In 2017, the global e-cigarette market size has hit USD 14 billion. According to Research and Market's report "2016-2025 Global E-cigarette and Nebulizer, Device and Retail Market Analysis and Forecast" predicts that by 2025, the global market for e-cigarettes is expected to exceed USD 47 billion, with an average annual compound growth rate of 25.99%. North America, especially the United States, will dominate the market, but the Asia Pacific region will grow at the highest CAGR, and is expected to account for more than 27% of the global e-cigarette market share.
According to the disclosed investment data (incompleted statistics), the number of electronic cigarette industry investment cases in China exceeded 35 in the first half of 2019, and the total investment is over CNY 1 billion.
However, recently the health and safety issues are gradually emerging. Based on the recent accidents related to E-cigarettes, New York Governor Andrew Cuomo announced on September 15 that the state will take economic and administrative measures to ban the seasoning of electronic cigarettes. At least 500 cases of e-cigarette-related respiratory diseases have been found in more than 30 states in the United States, including six deaths.
Within half a month, the US Centers for Disease Control and Prevention (CDC) and the US Food and Drug Administration (FDA) issued the strongest warning for e-cigarettes. The White House also proposed a national ban, saying that specific legislation was introduced within a few weeks to reduce the consumption of flavored e-cigarettes by young people. India’s actions are faster and tougher. On September 18, Indian Finance Minister announced that he would propose the ban on the production, manufacture, import, export, transportation, sale, storage and advertising of electronic cigarettes in India. Once approved, this will be the most stringent e-cigarette regulatory ban in the world.
Seemingly, there is an impasse between the heating interests of capital and health concerns; establishing an industry regulatory framework is urgent.