The Impact of the Russia-Ukraine Conflict on Russia E-cigarette Market Is Rare
BY Mozart Liu @ December 12, 2022

In the past two days, smog filled the air. Is there something big going to happen?

The Russian e-cigarette market is very hot these days

The past weekend, the Vape Club Show in Russia was held in Moscow. Most of the exhibitors were Chinese companies, including established manufacturers such as Vaporesso and MOTI, as well as other small disposable brands. Mi and RELX are also among the exhibitors.
                           Visitors are getting to ask for the hot-selling vape products

The "White Paper on E-cigarettes" was released, and the data shows that the scale of China's e-cigarette market has reached 10 billion yuan, and it is expected to reach 100 billion yuan in 2023. Against this background, domestic e-cigarette brands have entered the market one after another, including many well-known enterprises. However, most of these brands were short-lived and quickly disappeared. The reason is mainly due to the frequent occurrence of safety problems of e-cigarette products and the lack of consumers' awareness of them, which leads to a decline in market demand.

This is because the foreign trade part of the e-cigarette industry is closely related to Russia. It is understood that compared with the domestic market, the Russian market can be said to be full of flowers. Not only (heated not burnt) HNB penetration rate as high as more than 20%, there are markets for bomb replacement, heavy smoke, and disposable atomization products, among which disposable is the most popular. , followed by refillable POD pods.

Interestingly, just as domestic netizens are snapping up Russian local products sold on e-commerce platforms, Russian traders and brands have also shown great interest in Chinese companies, and Chinese products are more popular locally.

According to the organizer of the exhibition, there is a constant flow of people at the booths of Chinese exhibitors, each of which has potential customers, and it is not uncommon for hundreds of thousands of one-time orders to be signed on the spot. Most of the exhibitors who went to Russia to participate in the exhibition this time are factories, and even most of them are enterprises that have just started to establish a foreign trade system. "

This means that there is a considerable one-time OEM/ODM demand in the Russian market, and local distributors and brands can become customers. If it is not because of the war, Russia will be a good place for many domestic foundries.

MOTI, the leading e-cigarette brand in China, also participated in this e-cigarette exhibition. According to the person in charge, MOTI’s exhibition was very effective, allowing many local Russian customers to contact and recognize the MOTI brand and products, and the exhibitors proposed on-site transactions many times. After the exhibition, MOTI will increase its investment in the Russian market.

According to the person in charge of MOTI’s overseas business: “Even so, we still plan to proceed step by step and make a product that hopes to be stationed in the local consumer market for a long time and gain consumer recognition. We have reached a cooperation agreement with the local leading distributor. The next step is to Handle the advancement of various matters including settlement, transportation, customs, taxation, etc.”

An incomplete statistic shows, Russia's local disposable e-cigarette market is growing even more fiercely. However, according to the minutes of Smol’s public meeting, its market share in Russia is only a few thousandths, and the market share of pod-changing electronic cigarettes in Russia is relatively small.

In general, during the transition from traditional cigarettes to new tobacco, the impact of the Russia-Ukraine conflict on Russia, an important market, is only temporary, and it will still be one of the main markets for e-cigarette foreign trade after it is normalized.

Russia is the world's fourth-largest cigarette market, with nearly one-third of adults smoking. The country's $18 billion tobacco market is largely dominated by foreign players. The "E-cigarette Industry Blue Book" shows that in 2021, the domestic export of e-cigarettes is expected to reach 138.3 billion yuan, a year-on-year increase of 180%, of which more than half is exported to the United States, followed by the European Union and Russia.

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