Why are more and more merchants entering the E-Cigarette market? Profit analysis
In 2017, Xiaomi crowdfunded a disposable Electronic Cigarette called "A&D Energy Bar"; In May 2018, the mobile phone brand Kupai signed a strategic cooperation agreement with "Yuanlin", which focuses on the field of electronic cigarette related products; On January 15, 2019, Luo Yonghao released a new collaborative e-cigarette product - Flow
1. Why are more and more mobile phone manufacturers entering e-cigarettes One is that they are both mass consumer goods: the popularity of electronic cigarettes is increasing, and they have become the main force of consumption since 1995, making electronic cigarettes gradually become mass consumer goods from a small group; The second is that both electronic cigarettes and mobile phones are electronic products, although their appearance and functions are different. And most importantly, there are unlimited opportunities in the electronic cigarette market! 
2. The largest industry in the venture capital industry: electronic cigarettes China has one third of the world's smokers, nearly 350 million people. According to the latest survey by the World Health Organization, compared to 2000, the total number of smokers worldwide decreased by 40 million in 2018, with more than 35 million people switching to electronic cigarettes. Among these people, about half of the users believe that electronic cigarettes are more "healthy" than traditional cigarettes and try to use them to quit smoking addiction. With such a large conversion rate and such a large emerging market, capital will certainly not be absent. The e-cigarette industry has been praised as the most popular industry in 2019 by the venture capital circle, with a total of over 50 e-cigarette investment and financing cases since 2018. In 2016, China's electronic cigarette production was 1.21 billion cigarettes, with a market consumption scale of about 3.2 billion yuan, while the sales revenue of the cigarette industry in that year was 1370.6 billion yuan. This means that China's electronic cigarette market currently accounts for only 0.23% of the tobacco industry. In 2018, the domestic e-cigarette industry entered an important stage of product research and development, brand building, and consumer cultivation. It is preliminarily estimated that the output of China's e-cigarettes in 2018 will reach about 2.229 billion. It is predicted that the output of China's e-cigarettes will reach 2.898 billion in 2019, and 4.753 billion by 2022. 
3. Analysis of electronic cigarette industry chain The four core elements of electronic cigarettes: cigarette oil, control chips, atomizers, and batteries. At the upstream raw material level, it can be divided into battery raw material suppliers (batteries, cells, control circuits), atomizer raw material suppliers (plastics, glass, hardware, thermal resistors), and cigarette oil raw material suppliers. In the cost structure of electronic cigarettes, batteries account for the highest proportion, accounting for 55% of the total cost, followed by atomizers accounting for 35%. The middle stream mainly focuses on the design and manufacturing of electronic cigarettes, which can be divided into two categories: professional electronic cigarette manufacturing enterprises and international tobacco giant manufacturing departments. The domestic private brand market accounts for a small proportion. Domestic tobacco and oil enterprises mainly rely on OEM/ODM mode, and carry out OEM production for well-known foreign brands. 
Downstream, they are transported to retailers through agents and distributors, including well-known e-cigarette brands, large supermarkets, convenience stores, and pharmacies.
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