After getting the STN number, Skoll took the first step towards his American Dream

After getting the STN number, Skoll took the first step towards his "American Dream"

Skoll's parent company Yinghe Technology recently announced that two of Skoll's products have passed the first phase of PMTA review and obtained the STN number, and plans to actively expand the US market. What does obtaining the STN number mean to Skoll? What is the driving force behind Skoll's promotion of PMTA product review?

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Skoll's "American Dream"

Text | Two Supremes

 

On September 24, Shenzhen Yinghe Technology Co., Ltd. participated in the 2024 centralized roadshow event for listed companies in the new energy industry held on the Shenzhen Stock Exchange's "Interactive Easy" platform. When asked about the expansion of its subsidiaries and Skoll in the United States and other emerging markets, Yinghe Technology Secretary Li Chunhui replied: Recently, two products of Skoll have passed the first phase of PMTA review and obtained the STN number, which will help Skoll expand into the US market.

Yinghe Technology Answers Investor Questions | Image Source: Interactive Yi

 

On a fund stock trading exchange platform, a netizen interpreted it as "Skoll has obtained PMTA authorization for 2 products", which attracted the attention of the industry.

 

What does obtaining the STN number mean to Skoll? What is the driving force behind Skoll's promotion of PMTA product review? 2Firsts and several industry professionals with such questions to interpret Skoll's new dynamics in emerging markets.

 

"Obtaining the STN number does not mean passing the PMTA"

 

"Obtaining the STN number can only prove that the PMTA review application has been submitted, but it cannot prove that its product has been approved by the PMTA." PMTA certification consultant and founder of Ziyuan Technology Zheng Zhi told 2Firsts.

 

The full name of PMTA is Premarket Tobacco Application, which means that after February 15, 2007, any new tobacco product must be legally marketed after approval by the US FDA. The agency needs to consider whether the product is beneficial to public health in all aspects.

PMTA Process | Source: FDA

 

According to the FDA official website, the PMTA review process is divided into six stages:

 

Presubmission Meetings
Acceptance Review
Filing Review
Application Review
Action
Postmarket Requirements.

 

STN stands for Submission Tracking Number, which refers to the code assigned by the system after the FDA receives the applicant's information and has a preliminary review by the system. It is used to identify and match the information submitted by the applicant. It usually occurs before and after the "pre-submission meeting", that is, obtaining STN is just the beginning of the PMTA review.

One STN number, SE is already sold, PM is not yet on the market | Source: provided by the interviewee

 

"The STN number is just a tracking code automatically assigned by the FDA after the manufacturer submits the application materials to the file receiving port. It can only prove that the product has submitted a PMTA application, but it does not mean that the final application has been obtained. As the PMTA review process progresses, the STN number may be revoked at any time," Zheng Zhi explained.

 

Can the same applicant and product resubmit the review materials after the STN number is rejected?

 

Zheng Zhi explained that once the STN number is revoked, the same product and applicant cannot reapply for PMTA review within half a year.

Due to the high frequency of product updates in the US e-cigarette market, the market life cycle of popular e-cigarette products in the market is usually about 3 months. Brands or manufacturers will choose to launch corresponding upgraded e-cigarette products in a certain period.

 

"Even if the product materials can be resubmitted, considering the market sales prospects, the applicant is unlikely to submit again." Zheng Zhi said.

Products with STN numbers can enter the United States in the short term

 

Specifically, for Skoll, having an STN number means that the products it has applied for can enter the US market in compliance with regulations, and once the STN number is withdrawn, these products will lose the opportunity to enter the US market.

 

Zheng Zhi said that since there are too many projects currently applying for PMTA review and the FDA's review capacity is limited, it is usually possible to obtain an STN number by filling in the information and applying for review as required.

 

"In addition to the long PMTA review cycle, legal sales in the United States will not be disturbed in the short term, but it is not ruled out that at a certain point in time, the FDA will force the regulations that only products that have passed the PMTA review can be considered legally sold." Zheng Zhi said.

Zheng Zhi revealed that after obtaining the STN number, the company still needs to wait for the FDA's review. During this process, the FDA will decide whether to enter the next procedure based on the submitted information.

 

"For example, it is necessary to submit corresponding supplementary evidence, which is about a small investment of hundreds of thousands of dollars, and a large investment of hundreds of millions of dollars. Faced with e-cigarette products that have not yet entered the market for verification, many brand owners are unwilling to bear this expense, which also makes subsequent reviews impossible." Zheng Zhi said.

 

The driving force behind: The UK market faces challenges and actively seizes the US market

 

Faced with the subsequent capital investment required by passing PMTA, why did SKE, which originally focused on the UK, insist on entering the US market?

 

2Firsts communicated with SKY (pseudonym), an observer who has been paying attention to the US market for a long time, to interpret SKE's market trends.

 

In recent years, SKE has been developing in the UK market, especially the SKE Crystal Bar series launched in the UK, which has won great attention in the market and became a "dark horse" paid attention to by the capital market last year.

SKE Crystal Bar｜Source: Internet

 

SKY said that as a stock market, the UK's consumption growth of e-cigarettes will always bottom out. Faced with many other brands that continue to enter, the brands must develop other regions to relieve the pressure of the production chain because of the backlog of products in various channels to meet the market.

 

In January this year, the British government announced that it would ban disposable e-cigarettes, which further boosted Skoll's pace of expanding to other parts of the world.

 

For example, at the recent ANTY exhibition in Malaysia, 2Firsts noticed that the SKE brand began to enter the local market this year and regarded the localization of flavors as the first step.

 

At the same time, "As countries around the world tighten their regulation of e-cigarettes, Skoll must deploy faster to ensure the brand's leading position in these markets." SKY said.

 

Yinghe Technology also stated that "Since the beginning of this year, Skoll has expanded its sales team and is expanding into North America, Southeast Asia and other markets through advertising, social media interaction, local promotion, large-scale exhibitions and other measures, and gradually expanding its sales area."

 

In addition, as the world's largest single e-cigarette consumer, China's e-cigarette exports to the United States in the first half of the year reached US$1.814 billion, an increase of more than 20% year-on-year.

China's export of e-cigarettes in 2024 | Source: General Administration of Customs, Mapping: 2Firsts

 

Therefore, it is particularly important for Skoll to enter the US market. Although the US market is highly competitive and strictly regulated, its consumption capacity and acceptance of new products still attract the attention of many e-cigarette brands around the world.

 

SKY pointed out that Skoll's entry into the US market is not a hasty move, but is based on multiple considerations and strategic layouts.

 

First of all, as a subsidiary of a listed company, Yinghe Technology (300457), it must ensure compliance, and PMTA certification is a necessary step for tobacco products to enter the US market in compliance, but it is also a costly and complicated process. Many small and medium-sized e-cigarette brands give up entering the US market because they cannot afford the high certification fees.

Skoll's largest shareholder is Shenzhen Stock Exchange listed company Yinghe Technology | Source: Tianyancha

 

"As a subsidiary of a listed company, in order to comply with regulations and avoid risks, it can invest in trying PMTA." SKY said. He believes that the biggest obstacle in the future may be the assessment of product experimental data and production factories after the PMTA review process is gradually promoted.

 

"Currently, the products that have passed PMTA have passed the FDA's strict review of OEM factories, and there are only a few companies in China that can meet the factory inspection qualifications." SKY said.

 

Zheng Zhi said that according to his understanding, the only OEM factories in China that have passed the FDA's "factory inspection" are Smoore International and Heyuan Group.

 

Quiet layout: large-scale disposable products have landed in the United States

 

Although it is still unclear which products of Skoll have obtained the STN number, all brands under Skoll have made preparations for "getting ahead" in advance.

 

2Firsts learned that SKE, Memers, Vfly and other brands under SKE have already appeared in online e-cigarette retail stores in the United States, and they are all disposable products with more than 20,000 puffs.

 

For example, SKE's large-screen large-puff product SKE MG has been listed on the well-known American e-cigarette retail website vapesourcing, priced at US$16.99. The product is pre-installed with 22 ml of e-cigarette oil (nicotine content is 5%), which can be used 25,000 times, 850mAh rechargeable battery, and supports three unique e-cigarette modes, including soft mode, normal mode and enhanced mode.

 

It is reported that the product was released in May this year through SKE's official X (original Twitter) account in the United States.

Release content | Source: SKE USA

 

Skoll's other brand VFLY also released its first product VFLY C1 in May. According to the official website, VFLY C1 is a disposable electronic cigarette that claims to provide "the world's first real-time atomization visual experience". The device's screen can display real-time battery usage, remaining e-liquid, and different modes. The design is similar to the circular display interface of the Apple Watch. At that time, people related to Skoll introduced the layout of the SKE brand in the US market to the two supremes.

Promotion of VFLY C1 | Source: VFLY

 

Currently, the product is priced at $16.99 and has three adjustment modes: "Delicious (10W)/Strong (14W)/Extreme (18W)", and can be used up to 25,000 times.

 

MEMERS made its debut at the US TPE Expo held from January 31 to February 2, 2024, when it exhibited two products, Switcher S20000 and Melody ME18000. SWITCHER S22000 is a disposable product, but it has two flavors of 12ml e-liquid tanks, with a total of 24ml of e-liquid, which can be inhaled for about 22,000 times, and is currently priced at $13.89.

 

The following is the product information of the representative products of the three brands at vapesourcing:

SKE MG products | Image source: vapesourcing

MEMERS product | Source: vapesourcing

VFLY product | Source: vapesourcing

 

2Firsts also asked the relevant personnel of Shenzhen Skol Technology Co., Ltd. for relevant details, and they said: "We did 'pass the first phase of PMTA review and obtained STN authorization for 2 products'."

 

But they did not specify which brand of products under their umbrella obtained the STN number.

 

It will take time to verify whether Skol can finally get a share of the US market. 2Firsts will continue to pay attention to Skol's market dynamics in the United States.