Supply Chain Observation: E-cigarette battery profits continue to shrink, and the demand for soft-pack batteries continues to increase

Supply Chain Observation: E-cigarette battery profits continue to shrink, and the demand for soft-pack batteries continues to increase

At the Atomizer Industry Chain Exhibition, 2Firsts observed that the profit of e-cigarette batteries continued to shrink. However, the demand for soft-pack batteries continued to increase because they were more suitable for large-screen e-cigarette designs.

On August 29, at the 5th Atomizer Industry Chain Exhibition, 2Firsts communicated with a number of e-cigarette battery suppliers to understand the current status of the industry.

An exhibitor with more than 20 years of experience in the battery industry told 2Firsts that despite the current intensified industry competition, the e-cigarette business still has a certain profit margin, allowing the company to continue to invest resources in industrial layout and technical research.

At the exhibition site, the company's display cabinets were filled with soft-pack batteries and cylindrical batteries of different specifications. The relevant person in charge of the company said that although the cost of soft-pack batteries is slightly higher than that of cylindrical batteries, their design is more suitable for the currently popular screen-equipped e-cigarettes, so the related demand continues to grow.

Soft-pack batteries brought by a battery exhibitor | Source: 2Firsts

Facing the changes in the e-cigarette industry in recent years, the person in charge described the e-cigarette industry as "an industry with great ups and downs", and the demand for e-cigarette batteries is like a "roller coaster". With the intensification of supply chain competition, future profit margins may be further compressed.

At the same time, the company is considering expanding into other industry tracks to adapt to market changes and challenges. But he believes that the battery industry still has a long way to go, and the application of e-cigarettes is just a branch of it.

Another battery company participating in the exhibition for the first time told 2Firsts that although it has established a cooperative relationship with leading companies in the industry, the battery industry is currently facing fierce market competition and shrinking profit margins. Therefore, the company strategically regards e-cigarette batteries as a new business development direction, while continuing to pay attention to and focus on the field of small power batteries.

Therefore, the company did not display soft-pack battery products at the exhibition. The most important consideration is the capital cost of introducing a production line. According to him, the cost of introducing a battery production line is as high as 10-20 million, which makes the company more cautious in its product strategy.

2Firsts noticed that compared with last year's exhibition, the number of battery manufacturers participating this year has decreased. With the intensification of market competition, many battery companies have stated that they are working hard on cost control and product innovation to cope with future challenges of the industry.