China effectively bans online sales of e-cigarettes

[SHANGHAI] China issued its starkest warning yet over electronic cigarettes, calling on the industry Friday to stop selling and advertising the products online.

Citing health concerns for minors, a Chinese regulator and the state tobacco monopoly jointly urged manufacturers and sellers to shut down websites related to the marketing and sale of e-cigarettes, in what could amount to an effective ban.

The move could shut off one of the biggest markets for an industry that is facing scrutiny around the world. China has more than 7.4 million e-cigarette consumers, and it is the largest maker of e-cigarette products, according a study by Tsinghua University's Public Health and Technology Supervision Research Group.

It also comes just two weeks before one the world's busiest online shopping days, Singles Day, a holiday invented by the Chinese e-commerce website Alibaba.

The Chinese authorities, like their counterparts in the US and elsewhere, have been rethinking people's addiction to vaping. Last year, Beijing banned the sale of e-cigarettes to minors.

A top official at the tobacco regulator told the official Xinhua news agency Friday that many e-cigarette companies target young people by advertising e-cigarettes with words like "young" and "fashion" to tempt minors. Many parents, the regulator said, were worried that their children can easily purchase vaping devices through websites.

To some, the notice was as clear as a room filled with smoke. The vaguely worded statement, which was published Friday on the websites of the State Administration of Markets and the State Tobacco Monopoly Administration, left open questions about whether it qualified as a ban and whether it would be enforced.

"There is no law and regulation in China that forbids the online sale of e-cigarette yet," said Ou Junbiao, head of the Electronic Cigarette Industry Committee of China.

Ou said he thought that the regulator was worried about losing the tax revenue stream it gets from selling cigarettes.

Despite the ambiguity, some players moved quickly. Just hours after the notice was published, three online platforms removed e-cigarette products from their offerings.

Seven of China's most popular e-cigarette brands put out statements on social media late Friday saying that they supported the decision by the regulator. RELX, the most popular brand in China with 60 per cent market share, said it "firmly supports" the decision by the regulator.

"We will fully act to terminate all sales and advertising on the internet," it said on its social media account.

Two of China's biggest e-commerce platforms, Alibaba and JD.Com, did not respond to a request for comment.

"Most of the e-cigarette companies are doing the Internet model," said Zhang Jiafeng, 25, an e-cigarette lover who lives in Sichuan and runs social media marketing company that targets vapers and has more than 10,000 followers.

"They are newly founded and need the internet to promote their product, so this notice will be quite a hit on them," he said.

As a consumer, he added, this will mean more regulation and supervision from the government, something that he said would be a positive development.

For the industry, China provided a lucrative opportunity.

At an exposition for e-cigarettes in Shanghai this week, buyers and sellers milled about as 250 companies from all over the world advertised flavoured liquids like Bulgarian rose, bubble tea and Moutai, a Chinese liquor. Models walked around in pencil dresses and heels handing out free samples of e-cigarette fluids, near booths from US brands like Twist and local players like the state monopoly, China National Tobacco.

"We want to be here and make our presence here in China," said Mike Harcarik, a sales manager at Twist. "Look at it here: It's a huge market."

While Juul, one of the best known e-cigarettes companies, faces multiple state and federal investigations in the United States, it has targeted the overseas market for e-cigarettes, a strategy its new chief executive, K.C. Crosthwaite, highlighted to employees in an all-hands meeting in September. But that plan has hit roadblocks in Asia, with China's crackdown and India's announcement in September that it would ban the sale of e-cigarettes.

It's a business increasingly under siege everywhere, amid concerns about vaping by teenagers and a series of serious lung illnesses linked to smoking cannabis e-cigarettes. Some states have imposed bans on vaping, while the Food and Drug Administration has been weighing whether to pull flavored e-liquid products from the market.

Last month, sales at Twist fell by 50 per cent in the United States, Mr Harcarik said.

NYTIMES