January 2025: Chinese e-cigarette exports continue to decline
According to the data from the General Administration of Customs, the export value of Chinese electronic cigarettes declined by 1.1% to ¥78.3 billion (US$10.9 billion). Exports peaked at ¥138.3 billion (US$21.4 billion) in 2021 but fell 18% to ¥113.4 billion (US$16.8 billion) in 2022 and another 30% to ¥79.2 billion (US$11.2 billion) in 20231.
In 2023, the top export destination was the United States (US$3.7 billion) with 34% weight in total. The United Kingdom (11%), South Korea (7%) and Germany (6%) followed the US as the second, third and fourth largest export markets, respectively. South Korea’s high export value, despite having a relatively small e-cigarette market, is mainly due to its role as a transit hub. Other major export destinations for Chinese e-cigarettes were Russia, the Netherlands, Malaysia, Canada, and the United Arab Emirates.
Our take: E-cigarette category is growing worldwide, both in terms of volume and value, and China is virtually the single-source supplier for the category. Thereby, the decline in Chinese e-cigarette exports (i.e. almost halving in US$ terms from 2021 to 2024) cannot be explained by the global demand dynamics. We believe a small portion of the decline is attributable to the unit price decline (in US$ terms) and emergence of alternative e-cigarette manufacturing hubs (like Indonesia); the large portion of the decline is attributable to the misdeclaration of export goods on purpose in order to evade the regulatory restrictions in the US and other key markets (where all or a certain type of e-cigarettes are banned). Recall: Illicit Trade – RRPs: The US
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