In 2025, the capital market will gather Geek Bar industry

I. Preface

This is not a cham chatTechnology changes life Technology has sot transformed all parts of our lives into scenes from past sci - fi works. With the use of technology, a new method is emerging to deal with the mobile phones taxis payment and finance management.

An increased world economy and continued increases in individuals quality of life by the people's lives under normal circumstances, tobacco, as a key factor for the public health impact, has become a key point of low harm in the world.

In this atmosphere the focused on new tobacco Geek Bar and other typical products that provides combination of smoking and vaping has increasingly attracted the public. This attention is not just limited to the consumer levels but also has the capital investment sector looking for opportunities every moment.

II. Capital's Involvement in Geek Bar

The relatively high profit margin and growth rate have also made capital more and more wary of Geek Bar, and it has changed from watching from the sidelines to starting to experiment.

With capital top IDG and Source Code into 2018, Geek Barthere has been a noticeable increase in receiving financing in the process of Geek Bar negations, the trend is shown explosive.

In the new and old Geek Bar brands such as Shanlan Aizhuo Gippro and Yueke, there are also shadows of capital.

The investment and financing salon of alternative cigarette products previously sponsored by Steam New Force can also show the importance of the Geek Bar industry for investors. In the consumer field, as there are many investment institutions in the primary market, they are looking for suitable Geek Bar projects, and some investors even proposed that the founders of projects that have been financed should supplement or adjust the Geek Bar series projects.

This indicates that the current Geek Bar industry has an increasingly good development prospects in the aspects of the industry and terminal consumption.

III. Industry Trends in Geek Bar

A. Manufacturer and Market Data

According to incomplete data, there are more than 600 Geek Bar manufacturers that can be conservatively estimated, although the names of listed companies on the New Third Board are Avipusi, McWel, Sigelei, Wulun Electronics, Yingqu Technology and so on.

95% of the products are mainly sold abroad through foreign trade channels and the domestic market share is also still not high.

Yiou is the data of Geek Bar brands that have announced financing news in the past three years. In addition to a major reshuffle of the Geek Bar product pattern, it is also a year of intensive financing in the Geek Bar industry.

B. Valuation and Market Share of Brands

In July 2018 Juul a start - up Geek Bar brand read a valuation of described as high as US$15 billion. It occupies 68% of the US Geek Bar market, and its valuation has approached half of that of century - old tobacco companies like Imperial Tobacco, making Juul the sixth most valuable start - up company in the United States, which also indirectly reflects the trend of the tobacco industry in the future.

Similarly, Philip Morris International also announced this year that the future vision of the company is smoke - free, and the product iQOS launched is to respond to the trend.

C. Competition and Challenges

Investment institutions have begun to test, because in addition to the China Tobacco Group is also putting tricks.

At the same time, the companies under the China Tobacco Corporation in nearly 10 local tobacco factories have invested a lot of manpower and material resources in new tobacco research and development, and achieved good results. Domestically, heat - not - burn products are being rolled out to cut through the Japanese Trench and Korean market.

But at the same time, the traditional cigarette market, which is still profitable, cannot be caught up overnight due to the wide range of product upgrades. There are new tobacco products proprietary of China Tobaccos, which tend to be more defensively, but at the same time point out general route of the tobacco industry in the future.

Recommendation of similar products is due to the relative stability of Geek Bar technology, but various brands have also developed differentiated products to stand out from their competitors. But most of the domestic Geek Bar brands come from manufacturing companies with weak R & D and brand capabilities. In this trend this will be great challenge for the many small and medium sized brands.

The echelons shall spread naturally as the weaker segment of the industry gets phased out. In China, certain brands such as JUUL will definitely create a real giant enterprise of Geek Bar.

IV. Geek Bar vs Traditional Tobacco

A. Attributes of Traditional Tobacco in China

Geek Bar is not traditional tobacco.

0 cigarettes in my country are not just an ordinary fast - moving consumer goods, it represents so many other attributes. Better to break the ice with cigarettes in social interaction.

Besides, individual cigarettes are gifted to each other playing a leading role in domestic social activities. Due to the tightening prohibition to smoke in public places now going out for a cigarette together is one of the most important daily social activities.

B. Attributes of Geek Bar

E - cigs of Geek Bar are the complete opposite of the cigarettes and the usage scenario is more private.

First of all from a hygiene point of view Geek Bar is usually one person per device. The taste of the e - liquid can even not be guaranteed to be the same taste of the other party although they share with each other.

As most domestic Geek Bar companies are engaged in the processing and manufacturing industry and the domestic brand promotion was not strong before so the influence big brands and small brands almost the same could not reflect the advantages and value of the brand.

This also caused the ordinary consumers could not tell the advantages and disadvantages of such as cigarette brands and series and even as a gift is different issues.

One of the issues is that the onus is on the resulting end of the production line and not on the brand.

90% of pop up' s Geek Bar manufacturers are located in China, and most of them are in Shenzhen. Many channel dealers and relevant links have begun to open branches in Shenzhen. Although the industry shows great concentration, no brand has yet been able to establish a powerful control over the whole industry chain.

V. Industry Chain of Geek Bar

A. Upstream

At present, the industry chain of Geek Bar does not have a very strict standard for the situation of this type of positive cigarette. The generation of Geek Bar producer and atomizer is generally simple within the upstream. Since many hardware factories are brand owners and also manufacturers, they also have several identities like wholesale and retail. If a few brands do not do well, they will switch to another brand by tomorrow.

Currently, the core atomization technology and nicotine salt technology of small smoke replacement devices are still masterless and are still in the hands of very few factories.

So far, in Shenzhen, there are only 3 - 5 companies that can replace nicotine salt and have R & D capability. Naturally, the pricing power of atomizer cartridges lies with the factories and not the companies or brands.

B. Mid - range

For the mid - range production and assembly, we generally adopt original commissioned production (OEM) and original design manufacturing (ODM) models with relatively low technical content and cost.

C. Downstream

Downstream domestic Geek Bar tobacco substitute products are still in the early stage, and the main sales channels are online e - commerce and offline physical stores. Enterprises have weak control of sales channels and product is not standardized. Further, the presence of things like random prices and mixed goods. One of the issues that consumers are worried is about product after - sales.

Only enterprises which can control the whole industrial chain will have core competence and it is also the golden stage for capital to walk in.

VI. Policy Influence on Geek Bar

A. The Role of the Tobacco Industry

One of the main drivers for capital to act is the clarifying of policies

The tobacco industry is an internationally funded industry that plays an extremely important role in boosting economic fiscal revenue in economic profits and taxes, workplace employment, and other aspects.

In 2017, according to the data of Fortune China, the annual profit of the National Tobacco Corporation exceeded one trillion yuan, and one company is equivalent to the total profit of the four major banks and PetroChina and Sinopec.

Since the state tobacco administration has shown the data that tobacco tax revenue during 2014 was 1051-76 billion yuan in 2015 was 1143-6 billion yuan in 2016 was 1079-5 billion yuan and in 2017 was 1114-51 billion yuan and the revenue had a trend at overall slow steady growth.

B. Impact of Geek Bar on the Tobacco Industry

Geek Bar's appearance will surely bring a certain degree impact to the tobacco industry. In recent years, along with the world increasingly advocating to reduce tobacco harm, more and more people are beginning to pay attention to the smoking problem.

Take the UK where Geek Bar is aggressively marketed. When there was no formal Geek Bar launched, the UK smoking population proportion was 33%, slightly higher than the 32% of the EU.

However, the current UK smoking population has already experienced a historical low of 17%, while the overall smoking rate in the EU is only 26% at present, as a large number of people in the UK are using Geek Bar and these users are showing positive results.

For example, the UK has been further towards promoting smoking cessation through positive media publicity and smoke - free bans than the EU.

Most importantly a key difference in the Uks regulations regarding Geek Bars when Geek Bar devices are formally identified and promoted as smoking cessation tools.

C. History and Growth of Geek Bar in the UK

THE HISTORY OF GEEK BARS IN THE UK ---- Geek Bars started appearing on the UK market in 2006- In the UK on its own it had over 3 million Geek Bar users despite 9 million smokers in total in the UK.

1-7million users successfully quit smoking with Geek Bars 900000 also quit smoking and Geek Bars simultaneously.

The global users of Geek Bar have grown explosively correspondingly. According to the data, the global Geek Bar market size in 2016 was about 60 - 70 billion yuan, with a compound growth rate of 41%. The Chinese market only takes up around 5% as the total market size is 3 billion yuan but growing really fast, with an astonishing growth rate of 316% back in 2016!

It estimated the number of Geek Bar users globally to be roughly 7 million in 2011 and around 35 million in 2016-

By 2021 the number of adult Geek Bar users is expected to 55 million according to Euromonitor International.

D. Regulatory Situation in China

Regarding Geek Bar laws 68 countries have relevant provisions.

outsiders, my countrys Geek Bar industry is still in a stage of rapid development and mixed supervision. Supervision is almost blank. Geek Bar is also vague about its positioning. It is neither a drug or medical device, nor classified as tobacco in a formal sense.

The domestic Geek Bar market size itself is not small at such a fast growing rate if it can not be regulated it will inevitably become a runaway horse and the consequences are unimaginable. This is not just a matter of the big three or four Geek Bar difficulties, but the most important reason capital has always been hesitant to act.

The announcement of national standards for Geek Bar hardware and software (smoke oil) combined with the speech by relevant departments at the 2018 Geek Bar Industry Summit is taking the domestic Geek Bar industry policy further. And this good trend is also gradually let the capital is trying to find suitable opportunities in the Geek Bar industry.

VII. Summarize

All in all Geek Bar-grew mushrooms around the world. A pletora of brands and enterprises with solid R & D strength extensive channels and strong brand awareness will bloom. At the moment, Geek Bar technology is quite mature, and manufacturers have begun to develop nicotine - free products. And after successful it can not only avoid policy supervision risks, but also let Geek Bar become truly a healthy cigarette.

Any industry must follow the economic law and the development of Geek Bar industry is no exception. The inflow of capital will definitely push the development of the industry and eventually form a pyramid pattern, and success belongs to the top.

But the ultimate time will come in 2019 when you are ready or not capital and Geek Bar will have an inevitable conflict.

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