China calls on companies to close online e-cigarette stores

Josh Horwitz

SHANGHAI (Reuters) – China’s tobacco regulator issued a notice on Friday asking e-commerce platforms and companies to close online stores selling electronic cigarette products, a move aimed at preventing minors from buying e-cigarettes online.

The announcement comes shortly after online platforms and retailers in the US launched similar actions amid government scrutiny of vaping’s impact on public health.

It also comes as groups of Chinese start-ups race to capture a piece of China’s huge potential e-cigarette market.

The notice, dated October 30, was published a day later on the website of state monopoly China Tobacco, which is overseen by the country’s tobacco regulator.

In order to “further strengthen the protection of the physical and mental health of minors”, the regulator “calls on manufacturers, retailers or individual sellers of e-cigarettes to temporarily close their websites or online sales channels” and “calls on the e-commerce platform to temporarily close e-cigarette stores” – said the regulator.

China is home to over 300 million smokers, making it the world’s largest market for smokers.

In recent years, Chinese startups have raised venture capital money and launched products with features similar to those made by Juul, an e-cigarette company backed by Altria Group Inc. which conquered the United States with its compact design and powerful nicotine salt formulation.

RELX Technology, founded by former Uber China employees, and SnowPlus, founded by a team of former bitcoin entrepreneurs, are among the domestic market leaders.

Companies currently operate in a regulatory gray area in China as there are no national regulations setting standards for the safe production and sale of nicotine salt e-cigarettes.

Meanwhile, China Tobacco operates as a state-backed monopoly, controlling the sale and distribution of all tobacco products throughout the country. The unit also generates almost 6% of the country’s total tax revenue, according to government data.

In September, Juul’s official online store briefly appeared on Chinese e-commerce sites operated by Alibaba Group Holding Ltd and JD.com , only to disappear a few days later. Juul and retailers did not comment on the store’s sudden closure at the time.

In a public statement, RELX Technology said it would comply with the regulator’s notice and close its online sales channels. SnowPlus told Reuters it would also comply with the regulations.

Alibaba and JD.com did not immediately respond to requests for comment.

Over the past year, Walmart, Walgreens and other U.S. retailers have pulled e-cigarettes from their shelves amid public health concerns about their effects on minors.

(Corrects company name to SnowPlus from Snow+)

(Reporting by Josh Horwitz and Brenda Goh; Editing by Susan Fenton and Simon Cameron-Moore)