It is often said that FMCG business is like 'working for cabbage money but worrying like selling drugs.' In recent years, competition in the FMCG industry has been a red ocean, and finding a new product that is both easy to sell and profitable seems harder than reaching the sky. Businesses like tobacco companies are desired by everyone, but under the monopoly law, traditional tobacco business is untouchable for ordinary people. Notably, technology advances rapidly, and often, unexpectedly, it gives pioneers willing to challenge unknown territories a big surprise, opening up a new world. 'E-cigarettes—electronic atomizers', a brand-new category that satisfies people's leisure and stress relief and young people's social expression, have risen abruptly, seemingly bursting into our lives overnight. Behind the rapid rise of the e-cigarette industry, there is capital助推, accompanied by many doubts, but more importantly, it is the trend of 'technology advancing product innovation, and economic development upgrading lifestyles.' For distributors in the FMCG industry, this is a great opportunity for a 'comeback'! In the early stages of the e-cigarette industry, it is inevitable that there will be a mix of good and bad. Distributors who want to enter the e-cigarette category must keep their eyes open and choose carefully, finding a reliable and strong good brand to grow together. 'Short-term depends on marketing, mid-term on channels, and long-term on supply chain—none can be missing.' Although e-cigarettes are a brand-new category, like most FMCG products, they follow similar patterns of growth and development. This article attempts to scan the industry from the bottom to bring some inspiration to friends who want to enter the e-cigarette industry. What are e-cigarettes? E-cigarettes are a type of new tobacco product. Their biggest feature is that they do not require burning (therefore do not produce tar, reducing harmful substances by 95% compared to traditional cigarettes), provide nicotine, and produce only minimal secondhand smoke (suitable for various scenarios, not disturbing people around). This handheld small device, driven by batteries and composed of a battery rod and cartridges (atomizer), allows e-liquid to vaporize and form smoke. This way of vaping has quickly been embraced by a large number of young people. For young people, e-cigarettes are not only healthier alternatives to smoking but also provide a new form of self-expression and lifestyle. It is foreseeable that in the near future, e-cigarettes will become a fashionable, cool standard, deeply penetrating the lives of young people, just like other tech electronic products. Why are e-cigarettes worth doing? According to the '2017 World Tobacco Development Report,' the global e-cigarette market size reached 12 billion USD, and it is predicted to reach 48 billion USD by 2023. China has 350 million smokers, making it the world's largest tobacco consumer and producer. Currently, the penetration rate of e-cigarettes in China is only 1%, while in the US it is 13%. Assuming the domestic penetration rate reaches 10% in the future, the corresponding market size could reach hundreds of billions. Market data shows that the domestic e-cigarette market is growing at a double-digit rate annually, and this trend will continue for several years. The vast market potential has attracted numerous venture investors. In 2019, financing for e-cigarette companies showed a trend of 'concentrated explosion.' As of June this year, domestic e-cigarette companies have completed 14 financing rounds, with total financing amount close to 600 million yuan, higher than the total investment amount for the entire last year. First-tier investors entering include Plum Ventures, Matrix Partners China, IDG Capital, ZhenFund, Source Code Capital, etc. We have delved into several e-cigarette brands that have received large venture capital. Among them, 'idols' from Shenzhen's Niwo Group is impressive. Niwo Group has achieved top 3 sales in the US e-cigarette market. This year, it launched its domestic market and has completed the first round of financing of over 100 million yuan. This shows that both brands and capital have great confidence in the domestic e-cigarette market. E-cigarettes have obvious FMCG characteristics: rigid demand, high frequency, repurchase, high turnover. The offline repurchase rate is considerable. A cartridge lasts an average of 2-3 days, and heavy smokers can even finish one in a day. The repurchase rate is almost equivalent to cigarettes. With high usage frequency, users will continuously buy new cartridges after purchase. Offline stores provide convenient purchase and after-sales service. Once a product conquers consumers with a good experience, it can achieve long-term repurchase. Currently, the e-cigarette market is being standardized. As long as e-cigarette distributors strictly comply with national laws and regulations, they have the opportunity to profit and grow. Who is best suited for the e-cigarette business? What kind of distributor is best suited for the e-cigarette business? What value will the e-cigarette business bring to distributors? This question starts with the offline channels suitable for e-cigarettes. E-cigarettes, which are not yet included in traditional tobacco taxation and regulation, are difficult to purchase through traditional tobacco sales channels. However, due to the harm-reducing, trendy characteristics of e-cigarettes, there are more diverse terminal stores suitable for selling them: large chain supermarkets, small and medium supermarkets, chain convenience stores, grocery stores, teahouses, chess and card rooms, beauty spas, gyms, car wash and beauty shops, coffee shops, tea shops, nightclubs, internet cafes, fruit shops, mother and baby stores, 3C digital stores, communication stores, etc., all of which are very suitable for e-cigarette sales scenarios. FMCG distributors supplying these channels will also be the most suitable people to do the e-cigarette business. FMCG distributors can further utilize their developed sales networks to achieve incremental growth in business. FMCG profits are relatively low, and existing business is difficult to maintain the expenses of the business team, leading to high turnover of sales personnel and operational difficulties. Adding the e-cigarette business can become a stable and considerable source of income for the business team, helping distributor bosses relieve the pressure of maintaining a business team. Currently, e-cigarette products at the forefront can help distributors expand more diverse store customers and add incremental business to their original operations. At the same time, e-cigarettes can be combined with original products for combined operations, enriching business operation methods. Reuse of terminal store value, business team value-added—one path earns double money, and you can enter the current most promising trend. E-cigarettes will bring higher profits and faster growth to traditional FMCG distributors. How to choose e-cigarette partner companies, brands, and products? In the domestic e-cigarette industry, most brands commission OEM factories for manufacturing, and some even lack the capability for appearance development. Product quality is difficult to control, experience is poor, and there are even safety hazards. The low threshold leads to a mix of good and bad in the industry, making it difficult not only for consumers to choose but also for distributors to know where to start. Currently, many 'internet-famous e-cigarettes' actually have a 'landmine' constitution, focusing only on marketing, with too short a product life cycle. After the hype passes, they will quickly die, and channels have to clean up the mess for these dead e-cigarette brands, which is not worth it. Therefore, when distributors choose partner companies, it is recommended to evaluate comprehensively from the following 10 dimensions: 1. Product maturity Product quality is the most core factor in impressing consumers. When choosing an e-cigarette partner company, distributors should avoid brands that rush to market and quickly launch to 'make money.' Mature e-cigarette products require strong R&D and technical support, as well as necessary testing periods, which are definitely not achievable by casual OEM products. 2. Corporate financial strength, profitability history, and financing channels Abundant capital flow can ensure the company's investment in products and brands and accelerate corporate growth. Backed by a company with funds and strength, both the product and the interests of distributors themselves are more guaranteed. Capital endorsement is the most reliable backing for corporate strength. 3. Policy sensitivity and public relations capability Policy is the biggest variable in the e-cigarette track. Based on considerations of public health, the upcoming national standard will definitely regulate the industry and strictly manage the product side, quickly eliminating a batch of unqualified small companies. In this case, e-cigarette brands with excellent quality and the ability to cope with policy risk variables and compliance will have greater opportunities. 4. Business philosophy of the founder and management team Whether a brand wants to make a quick buck or operate long-term depends on the business philosophy of the founder and management team. Companies that want to make quick money have inadequate product quality and service, which not only hurts consumer experience and emotions but also wastes distributor resources and cannot provide long-term development support and help for distributors. 5. R&D and innovation capability Although the main equipment barrier is not obvious, factors that directly affect user experience can indeed differentiate. Breakthroughs in core technology, better user experience and word-of-mouth will become the premise for user repurchase, increased stickiness, and even recommendations. Currently, the domestic e-cigarette market has serious homogenization, and only companies with R&D capabilities can create differentiated products, quickly iterate and update, seize market gaps, and create user value. 6. Supply chain integration and management capability An e-cigarette is composed of dozens of small components, and every tiny part can determine the quality of the e-cigarette. Companies with strong supply chain integration and management capabilities have the fastest response speed, highest operational efficiency, and can ensure production capacity and quality. 7. Complete industrial chain layout The e-cigarette industry chain includes upstream raw material suppliers, including nicotine salts and e-liquid flavors, midstream product manufacturers and brand owners, and downstream circulation and retail channel providers. Currently, most domestic e-cigarette companies only stay at a certain link. Companies that have opened up the entire industrial chain can have the highest efficiency, best quality, and largest profit margins. Cooperating with such companies naturally brings the greatest profit opportunities. 8. Determination and actions to develop together with channel partners Such companies can continuously provide support to partners, help distributors grow quickly and develop long-term, truly pay attention to the rights and interests of distributors, rather than just collecting money. For this new business of e-cigarettes, most distributors have no experience and very much need guidance and help from partner companies. It's not enough to get a high-margin product; you also need to know how to sell it! 9. Brand communication and marketing planning capability To reach users and be seen and remembered, besides channels, it mainly relies on marketing. With the development of the industry, the trend of branding will continue to increase. The penetration rate of the domestic e-cigarette market is still very low. At this stage, brands need to conduct market education and bring consumers to the terminals. Brand communication and marketing planning capability determine whether a brand can empower channels and build a bridge between consumers and terminals. 10. Team execution capability Team execution is the core of corporate development. The business philosophy of the founder and management team needs to be accurately and efficiently implemented. Team execution drives the company's healthy operation and sustainable development. Cooperating with such companies, distributors can not only do good business without worries but also receive positive influences and promote their own growth. In the near future, whether it is consumer education or policy regulation, the e-cigarette market will gradually mature. Brands that score high on the above 10 dimensions, even if they do not yet have an advantage, have a longer product life cycle and can continue to exert force in the latter half of the race, outrunning other players. Is product selection difficult? idols gives you the answer! Evaluating comprehensively from the above 10 dimensions, it is not easy for distributors to accurately select partner companies. After screening with such standards, besides brands that already have a certain scale, new brands are few and far between. Taking a comprehensive look at domestic e-cigarette brands, idols is one of the few new e-cigarette brands that meet these standards: 1. Brand connotation that impresses young people idols defines the new concept '% Youth,' encouraging young people to chase free and diverse youthful dreams. Colorful idols, inspiration flashing; 1% idols, release 100% of yourself; fashion, fashion, most fashionable; cool, cool, most cool. Accurately grasping the psychology of young audiences and gaining their value recognition makes it easy for consumers to build brand loyalty. 2. Creating a brand-new 'semi-open' category idols applies an innovative solution—the semi-open system. Cartridges can be refilled with e-liquid, meeting multiple needs such as DIY, low cost, and personalization at once. The price of a single cartridge is as low as 2.2 yuan, effectively increasing the repurchase rate. idols semi-open atomized cigarettes are truly differentiated and unique products, filling market gaps and establishing competitive barriers. Starting from consumer needs, this technical highlight has been well received by both new and old e-cigarette players. 3. Hardcore quality, seven-fold leak prevention idols has a 'nuclear submarine-level' 7-fold leak-proof structure, starting from a dry-wet separation structure that ensures no leakage during transportation, to use and storage. Every link and every structure is extremely precise, strictly guarding against leaks, solving consumer pain points. Only products with good user experience can guarantee repurchase. 4. Quality assurance from Apple's OEM factory, resolving after-sales troubles Backed by the international new consumer goods company Niwo Group, idols semi-open atomized cigarettes are manufactured by Apple's OEM factory, with extremely low defect rates and guaranteed quality, reducing after-sales troubles for distributors. It also has a comprehensive after-sales mechanism to maximize the resolution of distributor after-sales issues. 5. Supply chain cost control brings considerable profit margins idols deeply masters the supply chain and has the capability of the entire industry. Price control is detailed down to every product component. Through supply chain cost control, it brings considerable profit margins to distributors. 6. Brand communication helps market expansion Although brands with voice are not necessarily good brands, brands without voice... you definitely wouldn't dare to do them! idols achieves brand exposure through online media matrix, multi-channel activities offline, bringing the brand to consumers from top to bottom, and bringing consumers to terminals from bottom to top, two-way empowerment, helping market expansion! 7. Series of channel incentive policies, full-process assistance for channel partners to develop steadily and profit abundantly Sell well and get rewards; if not, we teach you how! idols provides channel partners with complete channel incentive policies, rebates, supporting activities, material support, and full-process guidance. As a brand with growth potential, idols is committed to helping every channel partner develop steadily, profit, and grow! Only excellent players like idols that 'develop comprehensively' can run fast and far. We look forward to seeing it break through, and we also look forward to more brands with good products and strong strength receiving channel attention and reaching every consumer; we hope every distributor can work with quality brands like idols to do the e-cigarette business well, gaining both profits and greater growth! 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