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Vape_Radio_88_-_A_Billion_Lives_interview_with_Aaron_Biebert

Show Summary:
Today’s show will be an eye opener since you will get a deep, deep dive into the vape market overseas, specifically China. See the long list of topics we covered below.
David Ettinger is a partner with the Keller and Heckman law firm in Washington DC, and he’s lived in Shanghai for 4 years and follows the market there every day.
There was so much information to cover that I asked him to keep going and we’d create a Part II and that’s what we did. This is part I, which speaks to the Chinese market primarily. VAPE radio show #86, which follows, expands into Japan, Korea, the Philippines, Malaysia, Australia, Russia and other areas as well.
What you’ll hear today:
The Shanghai office has been open since 2004; David has been there since 2012
His background is in food law and e-cigs and vaping was a necessary next step
Quality control and regulations for e-cigs and vapor in China are lacking…
The tobacco industry in China is a monopoly, run by the STMA and China National Tobacco Company (CNTC)
They have complete authority to regulate production, sales, import, export, etc…
China will be the largest economy in the world by 2018; 6% of their revenue is from tobacco taxation
350M smokers, 1 trillion cigarettes smoked annually in China
Each province in China (about 34) has it’s own brand, overseen by the CNTC
7 of the top 10 brands worldwide are included in that list
Exactly what that that monopoly controls is a big subject. Currently it does not include e-cigs, devices, juices, etc… They are outside their control. For now.
One 5 sq. mile area of Shenzhen (near Hong Kong) has 600 e-cig producers, plus others that supply components and accessories. There is NO regulation of these “factories” which may be just a garage
95% of all e-cig products are manufactured there
There is minimal to no quality control and some things, like paint, may contain heavy metals or contaminants
This lack of QC may be behind many issues here in the US, but 5 years from now it will be more regulated
The “definition” of tobacco in China may be expanded and include vape companies. Many will close.
Who is the average Chinese smoker? Because smoking is part of their culture, children are exposed- and start- very young. 50% of all smokers worldwide are in China. Smoking around the dinner table is normal
Air quality in China is a major problem and smoking is contributing to health issues and early deaths. It is similar to US lack of regulations from the 1960s
Cigarettes are cheap in China, about $1.00 US
Most e-cigs are made in China, but few have been used there. That is changing
The sheer number of Chinese consumers can make them a bigger player than many large US companies
Two years ago there were few vape shops in China, but they have increased and are impressive
Is there a market in China for American products? Listen to David’s answer, but the next two years will tell the tale
CQ: Cultural Intelligence. KNOW IT and understand it

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