Business Day

Juul enters China as vaping draws sharp warnings elsewhere

- Josh Horwitz

US e-cigarettes maker Juul Labs, which faces a widening crackdown on vaping at home, has entered China with online storefront­s on e-commerce sites owned by Alibaba Group and JD.com to tap the world’s largest market of smokers.

Juul, in which tobacco giant Altria Group owns a 35% stake, has been launching its products in internatio­nal markets such as South Korea, Indonesia and Philippine­s. It recently raised more than $750m in an expanded funding round.

Washington announced plans on Wednesday to remove all flavoured e-cigarettes from store shelves, as officials warned that sweet flavours had drawn millions of children into nicotine addiction. The move comes as US health officials investigat­e a handful of deaths and potentiall­y hundreds of lung illnesses tied to vaping.

A notice published on Juul’s official virtual store on Tmall, an Alibaba e-commerce site, said it had opened on September 9. Juul also had a similar store on JD.com, another major Chinese online retailer.

On Tmall, a Juul device with two flavour pods sells for 299 yuan ($40). Flavours include mint, mango and strawberry.

Juul, Tmall and JD.com did not immediatel­y respond to requests for comment.

China, which is the world’s largest single market for tobacco consumptio­n with more than 300-million smokers, represents a market with both opportunit­y and risk for the company.

It is already home to dozens of Chinese competitor­s with names such as Relx, Yooz and Snow+. These companies have taken tens of millions of dollars in venture capital funding from high-profile investors.

Like Juul, the competitor­s have adopted the concept of producing discrete devices that vaporise potent nicotine salts.

China’s government has perenniall­y launched antismokin­g campaigns in an effort to improve public health.

Earlier in 2019, it released a draft document suggesting that China’s laws regulating ecigarette­s will eventually largely resemble those in Europe.

China’s tobacco industry is tightly controlled by government-run monopoly China Tobacco, which maintains complete oversight on the sale, production and distributi­on of tobacco products.

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