Industry news

Water pipe china market status

  At present, water pipe china manufacturing enterprises can be divided into two categories: one is a company specialized in the design and manufacture of water pipe china or water pipe china accessories, which is generally small in scale; The other is the traditional tobacco giant, through its own research and development or acquisition of professional water pipe china Company.

  According to a report on water pipe china, the global water pipe china market in 2016 will be about 10 billion us dollars, 95% of which will be in foreign markets and about 500 million us dollars (only 5% of the domestic market).

  At present, the scale of China's water pipe china market is about 3 billion yuan, accounting for only 5% of the global market. Although the market share is small, China is the world's largest producer and exporter of steam water pipe china in terms of supply. Ninety percent of the world's steam water pipe china products and accessories are produced in China. three of the top five water pipe china sales brands in the U.S. market are produced by China's water pipe china company, while the top five open water pipe china sales are produced and exported by Chinese companies.

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  According to practitioners Simon and Luo Jia, the current domestic market is small but has great potential. Although most of the water pipe china market is a steam user, with the development of future technology and channels, the water pipe china market will definitely be subverted.

  Statistics show that China has 316 million smokers, smoking an average of 15.2 cigarettes a day, with a market size of over 1 trillion cigarettes a year.

  He said: "At present, the number of water pipe china consumers in China is about 150 million to 2 million, accounting for only 0.47% of the total number of smokers. In other overseas markets, UK water pipe china consumers account for about 4.2% of the total number of smokers, while France accounts for about 3.1%.

  However, the compound growth rate of China's water pipe china market was 71.1% in 2012-2016 and 31.6% in 2016. The growth rate is very fast. Compared with the domestic multi-trillion traditional tobacco market, the market space is still very large.

  When we first entered this industry in 2014, the total sales volume of China's water pipe china was only over 10 million units. A few years later, the number doubled. "moreover, the profit margin in this industry is relatively high, with the basic profit exceeding 30 percent," Mr Luo said.

  With the continuous development of the water pipe china industry, many water pipe china companies have started listing on the third board. the disclosed information shows that the performance of water pipe china companies is obviously polarized.

  Industry leaders Aviperth and Maxwell realized 915 million pounds and 716 million dollars in 2016, up 19.89% and 146.59% from the same period last year, and realized 168 million dollars and 125 million dollars in net profits, up 272.08% and 227.33% from the same period last year. Although their performance grew rapidly, Avex and McWeill's gross and net profit margins remained stable at around 30% and 20%.

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  With the rapid development of water pipe china in China, who will become the main channel in the future?

  In Samuel Liu's view, "as far as the mature foreign market is concerned, offline is more important." However, consumer education in China has not yet been completed. Online is more important and covers more people more effectively. Fast offline sales channels will become very important in the future.

  Simon believes that in the future, online channels will remain the main channel. "Although offline experience stores can complete some user education, offline stores have high costs and limited coverage, while online channels can cover more users at lower costs." We believe that as long as the products and brands are excellent, the user education of smokers should be spontaneous. Can iQOS also obtain a large number of users without an offline store?

  In fact, with the popularity of iQOS in China and the listing of some water pipe china companies, some capital and investors are also paying attention to this industry.

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  Zhang Qinghe and Samuel Liu revealed that from 2016 to 2017, the unattended water pipe china industry was broken and more and more people talked with them about investment issues.

  At present, there are three kinds of capital exposure, one is not clear; The second is to recognize the great potential of the industry, but worry that the risks of China's supervision have disappeared. The last is not afraid of risks. The attitude of the vast majority of people is the latter two. The industry is very attractive to capital, but the regulatory risks are also huge. Samuel Liu said.

  Simon also told Pinto that most of the funds in the water pipe china industry are in a wait-and-see state. the lack of industry objectives and the uncertainty of policy risks are the two most important reasons.