Preface: This is also a corporate social responsibility map: not opening stores near primary and secondary schools is the company's bottom line; both direct-operated and franchise stores have important notices: e-cigarettes contain nicotine, minors are prohibited from buying and using; and Snow+ is the first Chinese e-cigarette company to put warning statements in prominent positions on new product packaging.
-01- A Northern Man's Path to "Five Golden Flowers"
This autumn, Hohhot businessman He Wei owns five Snow+ e-cigarette franchise stores. He jokingly calls them his "Five Golden Flowers"—his first store had sales exceeding 80,000 yuan in less than two months, recouping his investment. "Before the end of this year, I plan to open five more," says the 55-year-old northerner.
Before June this year, He Wei, who had experience opening multiple stores, didn't know about Snow+. But the franchise conditions for this atomized e-cigarette quickly appealed to him: individuals could join with zero franchise fees; subsidies for store design and decoration; and gifts of product subsidies and promotional materials (such as display racks and disposable mouthpieces). In second- and third-tier cities, opening a store requires only about 50,000 yuan in total investment, making it a typical "small but beautiful" venture.
His store preparation time was compressed to within 15 days. "I've previously been involved in franchising internet cafes and billiard halls, which required 2-3 million yuan upfront and took 1-2 years to see returns—too long a timeline," He Wei says. Especially in a cash-is-king environment like 2019, cash flow issues can easily arise.
He Wei's first franchise store in Hohhot
"Snow+ also provides us with professional operational training," says a franchisee from the Yangtze River Delta. Internally, Snow+ plans to incorporate this training into its upcoming business school curriculum. The curriculum includes inviting franchisees to the Beijing headquarters and the Shenzhen supply chain, allowing them to immerse themselves in the vast e-cigarette market and Snow+'s "big factory feel"—for example, Snow+'s laboratory, which exceeds 4,000 square meters and is built to CNAS standards, will be operational next year.
"We view every franchisee as our business ambassador and brand ambassador; they will take on the important role of educating the market about e-cigarettes," says Wang Ying, head of Snow+'s business school.
Besides He Wei, Snow+ has already brought profits to many stores. For example, a store in Shanghai's Jinqiao area had initial investment costs of less than 100,000 yuan. Snow+'s franchise fee has always been zero, it subsidizes most of the decoration costs, and provides substantial material and promotional support. After three months, the store achieved total sales of 200,000 yuan, with average monthly profit margins around 40%.
-02- New Favorite of Distributor Bosses, New Category in Offline Supermarkets
In early June, the first franchise store in East China opened in Wuhan; in late June, the first in Northeast China opened in Dalian; in mid-July, the first in Southwest and North China opened in Chengdu and Shijiazhuang, respectively... Snow+'s operational data shows that stores recouping their investment in three months account for 85% of all Snow+ franchise stores. Currently, most e-cigarette investments have a payback period of 4-6 months. For this reason, since May 2019, Snow+ has nearly a thousand stores across more than 40 core cities in China.
For Snow+, a dark horse in the e-cigarette industry, He Wei has another identity—one of nearly 300 distributors. Unlike the franchise model, these distributors purchase goods from Snow+ and, with the assistance of Snow+'s sales team, distribute them to various existing offline channels, such as ubiquitous chain convenience stores and mom-and-pop shops. On precious counter space, they even replace the position of condoms.
"Our job is to help distributors set up stores and promote products," says Su Xiaowen, a Snow+ city manager from a city in Jiangsu. He and his team carry 20-30 kilograms of goods daily and visit at least 30 stores. In stores with poor sales, they sell alongside the store owners and then feed the collected information back to distributors. This post-90s entrepreneur often motivates his team with the saying, "Entrepreneurship is not a game; it's a Long March of 25,000 li." Snow+ is also undergoing a major strategic upgrade: further strengthening sales and service in several core cities, including Beijing, Shanghai, and Guangdong.
Distribution and franchising—one light, one heavy. Distributors handle large-volume purchases and broad channels; franchisees deeply cultivate each individual store, akin to "exclusive sales." Grasping both with equal strength has become an important reason for Snow+'s rapid sales growth.
"In a sense, quality distributors are our core business partners," says a Snow+ sales executive. "Unlike competitors, we haven't adopted a provincial or national agency model. Instead, we open valuable business opportunities to willing and capable distributors. They are spread across more than 180 large, medium, and small cities, working with Snow+ to cultivate the e-cigarette category."
"It's like a left jab combined with a right hook—a combination punch," says a distributor from the Yangtze River Delta. Like He Wei, he does both distribution and franchising.
"Since 2018, more and more players have entered the e-cigarette track, with nearly a dozen new products born every month. The blue ocean is turning red," says a person from the E-Cigarette Industry Committee of the China Electronic Chamber of Commerce. "Currently, the threshold for e-cigarette products is not high, so the channel side determines market share."
This person believes: Snow+'s aggressive offline moves stem from a new approach—defining e-cigarettes as FMCG products. So-called FMCG refers to items with short lifespans and rapid consumption. In its operational model, emphasis is placed on packaging, branding, and mass-market appeal. As a "cigarette substitute," the charm of e-cigarettes lies precisely in their ability to cover a broader range of channels than any traditional consumer product. Besides traditional grocery stores, tobacco and alcohol shops, and convenience stores, bars, restaurants, cafés, hotels, sports lottery centers, and even gyms are channels that can generate good sales. In August 2019, celebrity Zheng Kai posted a Weibo about an e-coffee product made by Snow+ that contains no nicotine, with a gym in the background. Previously, some leading brands had more often tagged this cigarette substitute with a "business style."
Zheng Kai's Weibo about e-coffee received 88,000 reposts and 12,000 likes; the #Snow+ e-coffee# topic garnered 150 million reads.
"We were the first to open up the CVS and TT channels of traditional FMCG—entering leading chain stores and convenience stores, such as Sinopec's Easy Joy, PetroChina's昆仑好客 (Kunlun Hao Ke), domestic Meiyijia, and foreign Lawson," says Liu Zhaohua, Snow+'s offline sales head. By the end of 2018, the total number of chain convenience stores (CVS) nationwide was 120,000, according to the China Chain Store & Franchise Association (CCFA).
"There are also some interesting special scenarios, like gas stations. Many drivers, when tired from driving, light up a cigarette to relax, but open flames are strictly prohibited there. So atomized e-cigarettes like Snow+ have a new use case. Snow+ entered gas stations quickly, covering North China within two months and spreading to Shandong Province. We secured exclusive sales rights for Shell gas stations," he adds.
Liu Zhaohua, 44, has 22 years of FMCG experience. He previously served as Vice President of Sales at Wrigley Confectionery (China), leading an execution team of over 10,000 people and directly covering 1.3 million retail outlets across more than 200 cities nationwide.
Similar to Liu Zhaohua's background, Snow+'s offline sales leaders are mostly veterans from FMCG giants such as Heineken, AB InBev, Mars Wrigley, JDB, and Unilever, who bring proven experience. "This is a strategic issue. We didn't prioritize fighting competitors for existing market share in strong e-cigarette channels like online; instead, we chose to intensively cultivate the broader FMCG channels to boost incremental growth and let more people know about pod-based e-cigarettes," says Liu Shuo, head of Snow+'s brand channel sales and promotion operations.
In July this year, Liu Shuo joined the Snow+ team, responsible for channel sales and promotion operations. Before that, he was a "beer expert"—having worked at companies like Budweiser and Heineken in national channel marketing and sales operations management. He jokes that he has always been "researching (tobacco and alcohol)." "For the e-cigarette sunrise industry, we maintain a learning attitude at all times, embracing market changes and new trends. To develop new channels, we are also continuously developing products suitable for those channels and adjusting prices accordingly," Liu Shuo adds.
Now, except for Tibet and Taiwan, Snow+ covers all provincial-level administrative regions in China, spanning more than 180 cities. In some remote areas, such as Shihezi in Xinjiang, Snow+ offline stores have also appeared. Third-party data indicates: currently, the brand's total number of various offline stores is no less than 100,000.
-03- Rapid Product Iteration to Meet Store Needs
"In product design, we also iterate continuously due to innovative sales models. Our new products have two series: Pro and Lite," says Liu Zhaohua, Snow+'s offline sales head. "Pro is a replacement product that will redefine e-cigarette quality, especially in the throat hit, battery life, and improved leak resistance that customers care most about, making it more suitable for traditional channels like franchise stores. Lite is the most cost-effective pod-based e-cigarette on the market and will gradually replace disposable e-cigarettes. This affordable, high-quality product is more suitable for FMCG; it will be launched on a large scale in about ten days."
Snow+ new product Lite: the first product in the e-cigarette industry with prominent warnings
Snow+'s new product "Night Demon," launched in August this year, glows brightly in the dark, making it a favorite among nightclub enthusiasts for all-night parties. This is hailed by the industry as another classic case of developing new products based on sales scenarios.
On October 27, 2019, Snow+ e-cigarettes once again left their mark on China's map—a direct-operated offline store opened at Harbin Wanda Plaza in Heilongjiang, located in the city center.
"This is another small step for Snow+," says Liu Nian, head of this direct-operated store. "With this provincial capital as a base, one day we will open direct-operated stores as far as Mohe (China's northernmost city—editor's note)."
Compared to the lightest FMCG and the heavier franchising, direct operation is the heaviest. Besides selling products, these company-owned stores also serve as image showcases. For example, at the direct-operated store in Beijing's Guomao—under Snow+'s headquarters—sales staff not only promote products but also spread Snow+'s entrepreneurial story and e-cigarette culture. The white hoodie with the Snow+ logo has become a striking sight among the bustling crowd.
At the newly opened Harbin direct-operated store, a prominent notice is posted: E-cigarettes contain nicotine; minors are prohibited from buying and using. "We deliberately designed this notice in black and white—it's a warning, to distinguish it from other colorful advertisements," Liu Zhaohua says.
Snow+'s offline stores all have such NOTICE; the black-and-white color scheme draws buyers' attention more effectively.
Additionally, not opening stores near primary and secondary schools is Snow+'s bottom line; and Snow+ is also the first in China's e-cigarette industry to place warning statements in prominent positions on product packaging.
"This is true corporate social responsibility. We hope that as the Snow+ map extends across the country, we can permeate every corner with the protection of minors," Liu Zhaohua says.
Tips will be paid 400-2000 yuan once adopted.