From Dividends To Turning Points: The Three Booms And Three Clearances in The E-cigarette Industry

Over the past decade, the Chinese e-cigarette industry has undergone a business miracle cycle:
From obscurity to mass entrepreneurship, from capital frenzy to regulatory tightening, from export profits to global vigilance.
Some became wealthy, while others failed.
If one were to give this decade a title, it would be:
"Three boons, three crises, constitute the entire growth and destiny of the e-cigarette industry."
01 The first boon: The "Wild Gold Age" of policy void (2014-2018)
It was a "time without ceilings".
The e-cigarette industry just received a windfall from the United States, and China's supply chain woke up overnight.
Shenzhen and Dongguan became "world e-cigarette factories", and countless factories received orders from overseas.
There was no regulation, no tax burden, and no quotas.
Each e-cigarette cost a few dollars to produce, and could be sold for tens of dollars abroad.
In that era, whoever could imitate fastest and deliver the fastest would become rich overnight.
That was the "first round of the e-cigarette people's wealth myth" - relying on opportunities, not brands. But at the height of the industry's madness, the seeds of crisis were quietly sown: frequent product safety incidents; severe homogenization competition; lack of consumer education; regulatory delays.
So, the industry was brewing panic in the midst of huge profits.
Everyone knew "it would eventually be regulated", but no one was willing to stop. Because running in the wind of opportunity was more profitable than reflecting.
02 The second boon: The "Yueke Era" boosted by capital (2018–2021)
In 2018, a name changed the industry - RELX Yueke.
This company, established less than three years ago, transformed e-cigarettes from an "assembly industry" to a "consumer brand race".
From then on, e-cigarettes had a "fashionable and branded" appearance.
Capital responded.
Venture capital funds such as Sequoia, Source Code, and IDG entered the scene, and hundreds of new brands emerged in Shenzhen.
In just two years, the entire industry entered a "channel explosion + capital valuation explosion" golden period.
Shops sprang up like bamboo shoots after rain, and three or five e-cigarette stores could be found on a street.
Entrepreneurs believed they were building "the next Xiaomi",
Investors firmly believed this was "a new blue ocean of global消费升级".
Until 2021, Yueke went public.
Its market value once soared to 30 billion US dollars, becoming the most dazzling new consumption myth in the world.
However, the myth would eventually be punctured by reality.
In the second half of that year, the National Tobacco Bureau released a征求意见draft -
E-cigarettes officially began to be included in tobacco management.
The capital boom came to an abrupt halt,
Investors withdrew, stores began to close, and the growth model was reset overnight. The second boon ended with a regulatory document, and also initiated the first true awakening of the entire industry.
03 The third boon： The "Escape Era" of overseas expansion (2021–2023)
When domestic regulation was implemented and flavors were restricted,
E-cigarette companies collectively chose "survival through overseas expansion". From Southeast Asia to the Middle East, from Europe to Latin America,
Chinese e-cigarette brands almost covered the entire global market. This round of boon came from two realities：
Overseas market regulation lagged behind; China's supply chain efficiency was unparalleled.
The first batch of overseas enterprises made huge profits.
Middle East agents placed orders for millions of cigarettes at one time,
E-cigarettes became a bestseller on TikTok, Shopee, and Amazon.
"Expanding overseas means huge profits", it became the industry's catchphrase.
But soon, the third crisis quietly arrived. Since 2023, the United Kingdom, France, Australia, and the United States have begun to strengthen regulation;

Tax rates rose, import licenses were restricted, and compliance costs for channels increased;
From 2024 to the present, "grey exports" have gradually been seized.
Global regulation tightened, making the overseas myth unsustainable.
And those companies that failed to establish brands had to return to the price war quagmire. After the dividends fade away, what is left for the survivors in the market are not more opportunities but more difficult problems:
"When you can no longer win by speed, what else can you rely on?"
04 The essence of the three crises: from "opportunity logic" to "system logic"
Looking at these three dividends and three crises, there is a core rule hidden behind them:
Every industry boom is based on "external dividends";
Every collapse is the result of the absence of an internal system within the enterprises.
In the past decade, the e-cigarette industry almost won everything by being "fast":
Fast in product development, fast in seizing channels, fast in realizing monetization.
But when external dividends disappear, "fast" becomes the biggest constraint for enterprises.
The current problem is no longer "whether there are opportunities",
but "whether there is a system":
Who can operate efficiently within the compliance framework; who can build recognition in the situation where the brand is restricted from spreading; who can achieve compound growth in fluctuations.
This is precisely the "fourth stage" that the industry is about to enter - the era of long-term value.
05 Moving towards the future: from fast dividends to long-term value
The e-cigarette industry is being forced to mature.
The tightening of regulations, the retreat of capital, and the tightening of global policies are all pushing enterprises to transform from "opportunity business" to "system business".
The future winners are no longer "who acts fast",
but "who has a stable system": with a strategic system: able to see the regulatory rhythm and category trends; with a brand system: surviving in an era without advertising, relying on culture and trust; with a product system: able to create truly stable, safe, and products with sustained consumption power; with an organizational system: making the company operate not by the boss but by the mechanism.
This is an evolution from "profit-seeking thinking" to "value thinking",
and it won't be lively, but it will be more long-lasting.
Conclusion: The three dividends are the opportunities given by the era;
The three crises are the costs that the era demands.
Today's e-cigarette industry is no longer a game of "who runs fast wins",
but a practice of "who can survive longer wins".
When dividends fade away, that is the real starting point for enterprises.
Understanding the cycle, building systems, and creating long-term value -
these are the answers for the e-cigarette industry in the next decade.