The US Market Went From Shortages To Stockouts, While Chinese Factories Moved From Shutdowns To Internal Conflicts.

As the traditional peak season approaches near the end of the year, the e-cigarette industry usually needs to prepare goods to meet the needs of the Spring Festival holiday and overseas markets. In previous years, HR colleagues in the e-cigarette companies would set up tables, chairs, and billboards everywhere to recruit employees. However, this year, it was a mixture of joy and sorrow for many, and there was a certain sense of desolation.
In the first six months of this year, many e-cigarette factories had nothing to do. Battery factories were closing down or undergoing transformation, and plastic factories were experiencing large-scale shutdowns. Starting from July, due to higher tariffs and customs seizure rates, many goods in China had no logistics carriers, and the US market began to experience a shortage of products. Large quantities of single-use devices became popular, and some inventories in the US market were cleared. The market was in a state of great prosperity. Various brands and imitations began to increase their production efforts. In August, a certain factory in Zhuhai, an e-cigarette giant, had a holiday from August to November. As a result, all manufacturers seized this rare opportunity to produce desperately, while at this time, the customs seizure rate in the US was still high, air freight prices soared, and people couldn't fly and had to switch to sea freight. Orders and advance payments poured in. Factories with sufficient capacity and inventories made the first profit. Due to the overlapping of production cycles and logistics cycles, and the active stockpiling by all manufacturers, the industry was busy during the "golden ninth and silver tenth" period. The bosses were smiling with joy.

In October, all manufacturers received goods in the US, but the demand suddenly cooled down. According to statistics, in October, the export volume of e-cigarettes from China to the US soared to 14,800 tons, which was nearly six times that of June (2,200 tons). During the period when the Zhuhai factory was shut down, its production capacity transferred to a subcontractor gradually expanded, and some customs-uncleared goods were partially released. Leading brands gradually received goods and returned to the market. The US market experienced a severe shortage in July and August, followed by a warehouse explosion at the end of October. The logistics companies' goods piled up like mountains, wholesalers had high inventories, and the price war broke out in November and December. White-label products and imitations were the first to reduce prices, and medium-sized brands followed suit. It was truly a world of contrasts. However, some brands were still shipping in large quantities, and logistics companies complained that they were not allowed to deliver. Wholesalers' warehouses were already full. Meanwhile, leading brands began to reduce prices and offer "buy five get one free" deals. The market was in a state of widespread wailing and panic.
This is not a recovery; it is an artificially created "crazy strangulation".
1. From shortage to warehouse explosion: The "false prosperity" of the US market
The US imposed tariffs on e-cigarettes from China, coupled with stricter FDA enforcement, a significant increase in seizure rates, and state flavor bans, China's exports plummeted to 2,200 tons, hitting a new low for the year. The mainstream brands were out of supply, and new large quantities of single-use devices in the US market were "in short supply". However, in October, the export volume soared to 14,800 tons, accounting for more than 50% of the US market for the first time. This was not a surge in demand, but a double panic of "grabbing customs" and "stockpiling":
Importers were worried about further tightening of policies, locking up goods in advance; distributors were worried about another supply disruption, ordering in excess; retailers were afraid of another shortage, desperately replenishing their inventories. The result was: demand did not increase, but inventories doubled.
2. Chinese factories: From shutdown to consolidation, only four months later
From May to June, some leading brands had a large amount of goods stuck in storage. Logistics companies were reluctant to transport due to high customs seizure rates and concerns about compensation. From August, Kikina Zhuhai factory, due to certain reasons, temporarily stopped production. This caused a large-scale shortage in the US market in July and August.
However, starting from September, with the "grabbing customs" wave, orders rebounded competitively. A certain brand's daily shipment of dozens of millions of units was still unable to meet the "virtual fire" of the channels. At the same time, medium-sized brands and imitations took the opportunity to rush to ship, GEEKBAR also gradually resumed production in batches. The market quickly shifted from shortage to saturation. The price war broke out: imitation white-label products and some well-known brands were the first to reduce prices, some well-known brands were forced to follow and reduce prices to "buy five get one free", "buy five get one free", or "buy ten get one free", and the market was in widespread wailing. Wholesale inventories were high, logistics companies were overwhelmed, some factories resumed production only to stop again, workers took breaks, production lines were idle, and the peak season turned into "overworked rest".
3. "Self-killing" of the Chinese: Systemic失控 behind the price war
This internal competition is not a market failure, but a systemic disorder: policy expectations are chaotic: US tariffs, FDA enforcement, flavor bans have been increasingly tightened, importers cannot predict and can only "prefer to stock up rather than run out of stock";
Supply chain imbalance: Chinese factories lack capacity buffers, production stops and they shut down, and when orders come in they are overstocked;
Brand homogenization: One-time electronic cigarettes with low technical barriers have an abundance of SKUs and brands, there is no differentiation, and they can only compete on price;
Short-sighted channels: Whoever is cheaper sells to them, whoever has quick circulation stocks them, regardless of brand, after-sales service, or long-term prospects.
The result is: Chinese people themselves engage in price wars, destroy brands, and ruin jobs.
IV. Industry Outlook: 2026, not "recovery", but "cleansing"
1. US market: Unlimited crazy competition.
As leading brands rush to produce and ship, starting from Q1 in 2026, inventory will be concentrated for sale, the price war will be even more fierce, small brands and counterfeit manufacturers, without capital reserves and too much inventory, will face a reshuffle;
The FDA has approved $200 million for seizing electronic cigarettes, China's electronic cigarettes will face stricter regulation, more seizures, risks accumulate, compliant brands (such as Vuse, Juul) will regain some channels.
2. Chinese supply chain: From "manufacturing" to "intelligent manufacturing", otherwise it will be eliminated
Factories without brands, technology, or compliance capabilities will close down in 2026 in a concentrated manner;
Factories with R&D, patents, and FDA compliance capabilities will welcome the return of US brands;
Shenzhen and Dongguan will witness a "major reshuffle", production will concentrate towards the top.
3. Brand landscape: From "thousands of brand wars" to "ten brands competing"
There is no eternal champion in every market, opportunities belong to those who understand the trend. Every step that is accurately timed, you will be the next champion. Enterprises with financial strength, brand reputation, and deep penetration into the US market will have the last laugh. Counterfeits and white-label products will be abandoned by the channels and redirected to gray markets in the Middle East and Southeast Asia.
V. Final Thoughts: Stop viewing "internal competition" as a strategy
The e-cigarette industry in 2025 has taught us a painful lesson: "The Chinese were not defeated by the Americans, but by their own people." Policies can be predicted, production capacity can be adjusted, prices can be strategized, but the most dangerous thing is that everyone is only looking at tomorrow, and no one dares to look at next year.
In 2026, the e-cigarette industry will not "recover", but will only "clear out". Those who survive are not the most impulsive ones, but the most calm ones.