Feeling the Chill

The e-cigarette industry in Shenzhen, China—the world’s vapor hardware manufacturing capital—is suffering in the wake of a vaping-related illness that has sickened more than 2,000 people and killed at least 47 in the U.S., according to an article in The Guardian.

Even though health authorities have blamed the health problems mostly on THC products obtained from illicit sources, a global crackdown on vapor products has taken a toll on legitimate businesses.

On Nov. 7, Chinese authorities ordered online platforms to discontinue sales of e-cigarettes, citing health concerns. Leading platforms such as Taobao or JD.com duly complied, causing the category to virtually disappear overnight.

China is the world’s biggest manufacturer and exporter of e-cigarettes, according to the China Electronic Cigarette Chamber of Commerce. In 2018, more than 2 million people worked in the industry, with annual sales worth RMB33.7 billion ($4.79 billion) and exports worth RMB28.7 billion.

Shenzhen manufactures about 90 percent of the world’s vapor devices and is home to about 1,000 factories. Thousands more companies form the supply chain throughout Guangdong province and China.

Bigger players have fared better than the smaller sellers, and life for them goes on as normal for now, according to The Guardian.

Some speculate that China Tobacco, the state-run monopoly that manages the country’s tobacco industry, is trying to stub out the vapor segment because its growth is coming at the expense of tobacco products.