Amid US vaping crackdown, e-cigarette maker Juul enters China with online store openings

SHANGHAI - United States e-cigarette maker Juul Labs Inc, which faces a widening crackdown on vaping at home, has entered China, with online storefronts on e-commerce sites owned by Alibaba Group and JD.com to tap the world's largest market of smokers.

Juul, in which tobacco giant Altria Group owns a 35 per cent stake, has been launching its products in international markets such as South Korea, Indonesia and the Philippines. It recently raised over US$750 million (S$1 billion) in an expanded funding round.

The US government announced plans on Wednesday (Sept 11) to remove all flavoured e-cigarettes from store shelves, as officials warned that sweet flavours had drawn millions of children into nicotine addiction.

The move comes as US health officials are investigating a handful of deaths and potentially hundreds of lung illnesses tied to vaping.

A notice published on Juul's official virtual store on Tmall, an Alibaba e-commerce site, said it had opened on Sept 9. Juul also had a similar store on JD.com, another major Chinese online retailer.

On Tmall, a Juul device with two flavour pods sells for 299 yuan (S$58). Flavours include mint, mango and Virginia tobacco.

[[nid:461128]]

Juul, Tmall and JD.com did not immediately respond to requests for comment on Thursday.

China, which is the world's largest single market for tobacco consumption with over 300 million smokers, represents a market with both opportunity and risk for the company.

It is already home to dozens of Chinese competitors with names such as Relx, Yooz, and SNOW+ that have taken tens of millions of dollars in venture capital funding from high-profile investors. Like Juul, the competitors have adopted the concept of producing discrete devices that vaporise potent nicotine salts.

China's government has perennially launched anti-smoking campaigns in an effort to improve public health. Earlier this year, it released a draft document suggesting that China's laws regulating e-cigarettes will eventually largely resemble those in Europe.

China's tobacco industry, meanwhile, is tightly controlled by the government-run monopoly China Tobacco, which maintains complete oversight on the sale, production and distribution of tobacco products. Beijing relies on tobacco sales for a sizeable percentage of China's overall tax revenue.